The Interstate Battle Royale for Mazda and Toyota's Super Factory
The funny thing about job creators is that they don’t always, you know, create any jobs. So, when a business lets slip that it might have 4,000 positions on offer in the near future, every state with an unemployment rate higher than zero takes notice.
Mazda and Toyota’s joint factory — codenamed Project Mitt — is one such example, and now over a dozen U.S. states are simultaneously competing for the opportunity to host the $1.6-billion factory and the thousands of direct and indirect jobs it will yield.
When the Japanese automakers publicly revealed their cooperative venture a couple of weeks ago, they made it clear they had not yet picked a site — sending economic development offices into a frenzy. But what locale will emerge victorious has a lot to do with what the region can offer the manufacturer, including potential tax incentives, tempting job training programs, and investments into infrastructure.
An affordable and abundant workforce is also desirable — an element that distinguishes many states from one another. But no single area has everything on offer, leaving the final decision of where to build up in the air.
“You have to be able to say you’ve got the workforce, you’ve got the land, you’ve got the transportation systems and rail spurs, community college and education and a place where people want to live,” Kristin Dziczek, director of industry, labor and economics at the Center for Automotive Research, told USA Today in an interview. “Once you’ve got all that, tax incentives come into play.”
For the most part, the Southern United States has the largest idle workforce to draw upon. Prospective employees are also willing to work for less and are less apt to unionize. The South has recently become a popular destination for automakers seeking to build new factories.
However, the midwest remains the country’s automotive hub. While Michigan has lost its governing role in the automotive world, it still remains the country’s seat for the industry. The state contains more engineering centers than anywhere else and houses plenty of parts suppliers. It also hands out significant tax breaks to manufacturers willing to set up shop within its borders.
“Michigan is absolutely the best location in the U.S. for this joint plant to be established, due to our leadership in automotive research & development, especially on mobility issues. We also have a strong pipeline of engineers and professional trades talent,” Gov. Rick Snyder said in a statement.
The downside of heading north is the possibility of unionization. While some Midwestern states, including Michigan, have adopted right-to-work laws, workforces within those states are still seen as being more likely to join the United Auto Workers. Meanwhile, the UAW’s attempts to unionize Southern assembly plants hasn’t met with any success.
If you were to gamble on the outcome, the safe money would be spread around Alabama, Arkansas, Tennessee, or possibly Mississippi. But that doesn’t mean more Northern regions aren’t in the running. USA Today provided an interesting list of most of the competing states, weighting the pros and cons of investing in each — proving they all have something to offer. However, the author later tweeted an automotive site selection expert’s opinion that no automaker would dare build in Illinois.
Toyota and Mazda expect the massive assembly plant to open in 2021. Sorry, Illinoisans.
[Image: Toyota]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Back in '02 Kentucky bought up a bunch of land trying to score the Hyundai plant that eventually went to Alabama. They held on to the land and upgraded the utilities for future industrial use. It's near the interstate and near the rail line. I wouldn't count KY out given that they have the plant Georgetown and is completing the Engineering center building as we speak.
If I had to venture a guess, I'd say Kentucky is #1 on the list. Toyota already has a large footprint there and access to a decent transportation network. Also it just recently became a right to work state. That removes some headaches in terms of expansion. There is a sizable workforce to draw upon in the area from the Lexington / Louisville / Cincinnati triangle. #2 would be Texas. Again, large workforce, decent infrastructure, existing footprint. #3 would be Alabama, either central or northern. I live in N. Alabama, and the infrastructure is mostly in place, along with a supplier footprint and existing Toyota facility in Huntsville. The only issue would be we actually have pretty low unemployment here (somewhat less than national average) ...there could be challenges finding people. Also-rans would be Mississippi, Indiana (Southern... too much UAW sentiment in northern half of the state), or Tennessee. Michigan? Forget about it.