Toyota's Trying to Remain Non-threatening in the U.S.

Matt Posky
by Matt Posky

While the Trump administration is carefully considering whether or not imported vehicles qualify as a threat to national security, and prepares for trade negotiations with Japan, Toyota is being very careful about how it comes across in America. Last week, the automaker announced plans to add about 600 jobs across the Southern United States — raising its proposed American expansion by another $749 million. In total, the company is expected to expend $13 billion inside the U.S. by 2022.

“In a time when others are scaling back, we believe in the strength of America and we’re excited about the future of mobility in America,” Jim Lentz, CEO of Toyota Motor North America, said of the decision.

Throwing some casual shade at other automakers who are cutting down their domestic workforce is a sound PR strategy but, according to Toyota, its increased investment has nothing to do with global or industrial politics.

“We’ve been part of the cultural fabric in the U.S. for over 60 years,” Chris Reynolds, Toyota Motor North America’s chief administrative officer for manufacturing and corporate resources, was reported to have said on March 14th by Automotive News. “In a time when others are scaling back, we believe in the strength of America.”

Sounds like Toyota believes in the strength of America… and doesn’t want any of it focused against the business.

CEO Akio Toyoda spoke to Washington on Friday, reportedly claiming discussion of imported vehicles as a security threat makes him “feel sad.” But Toyota has pledged its support of a new trade agreement between the United States, Mexico and Canada, and was eager to see productive negotiations begin between Japan and America.

From Automotive News:

Toyota, whose American factory work force has grown to be about half the size of GM’s, could soon find itself forced to invest even more in the U.S. if it wants to avoid tariffs that would raise the prices of some vehicles. Reynolds and CEO Jim Lentz said they are eager to learn whether the Trump administration will indeed declare imported vehicles to be a national security threat and go forward with tariffs, so they can determine whether additional production needs to be shifted.

But they also said the company, which imports about half of its U.S. sales volume, won’t make any knee-jerk decisions either way.

“Our investment cycles go beyond any particular political cycle. We need to make decisions based on what we think the market needs rather than the policy direction of the moment,” Reynolds said. “All of this activity, I hope, shows that we’re a plus factor to the economic national security of the United States.”

Back in 2017, Toyota said it planned on investing $10 billion into its North American operations over five years. Since then, that sum has climbed to $13 billion. Toyota also recently said it would utilize the $749 million to expand facilities and/or add jobs in Huntsville, AL; Buffalo, WV; Jackson, TN; Georgetown, KY; and Troy, MO.

[Image: Toyota]

Matt Posky
Matt Posky

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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  • RS RS on Mar 18, 2019

    It was tariffs that got foreign automakers to build plants in the US in the 80's. Harley got a tariff. The current (2015?) tire tariff expires next year, I think. IMO, tariffs are generally bad, but one sided tariffs that take advantage of the US are worse. It's insane to bash Trump for trying to even the playing field. All previous administrations did the same.

    • DenverMike DenverMike on Mar 18, 2019

      The offshore brands, Toyota, Honda, Nissan, etc, didn't build US assembly plants because of tariffs. What caused it was a temporary embargo on imported Japanese autos to the US. That was early '80s, and they called it the Voluntary Import Reduction or something to the effect. Today offshore brands simply assemble cars in the US since it makes sense in many ways. Favorable low (non-union) wages, build/sell on location, currency exchange rates, etc, make it completely worthwhile. German automakers were not part of the VIR or any embargo, but they find it favorable building cars in the US and even shipping back, yes importing "German" autos to Germany. It's that favorable and they still pay very high tariffs up on entering Europe... That really says it all.

  • Jeff S Jeff S on Mar 18, 2019

    I don't really care where the manufacturer is based. I would rather have a Japanese or South Korean based manufacturer that employs Americans than an allegedly American based manufacturer that manufactures in China. Do you honestly believe that Barra or the credenza guy care anymore about the American worker than a Japanese manufacturer?

  • Kwik_Shift_Pro4X Another Hyunkia'sis? 🙈
  • SCE to AUX "Hyundai told us that perhaps he or she is a performance enthusiast who is EV hesitant."I'm not so sure. If you're 'EV hesitant', you're not going to jump into a $66k performance car for your first EV experience, especially with its compromised range. Unless this car is purchased as a weekend toy, which perhaps Hyundai is describing.Quite the opposite, I think this car is for a 2nd-time EV buyer (like me*) who understands what they're getting into. Even the Model 3 Performance is a less overt track star.*But since I have no interest in owning a performance car, this one wouldn't be for me. A heavily-discounted standard Ioniq 5 (or 6) would be fine.Tim - When you say the car is longer and wider, is that achieved with cladding changes, or metal (like the Raptor)?
  • JMII I doubt Hyundai would spend the development costs without having some idea of a target buyer.As an occasional track rat myself I can't imagine such a buyer exists. Nearly $70k nets you a really good track toy especially on the used market. This seems like a bunch of gimmicks applied to a decent hot hatch EV that isn't going to impression anyone given its badge. Normally I'd cheer such a thing but it seems silly. Its almost like they made this just for fun. That is awesome and I appreciate it but given the small niche I gotta think the development time, money and effort should have been focused elsewhere. Something more mainstream? Or is this Hyundai's attempt at some kind of halo sports car?Also seems Hyundai never reviles sales targets so its hard to judge successful products in their line up. I wonder how brutal depreciation will be on these things. In two years at $40k this would a total hoot.So no active dampers on this model?
  • Analoggrotto Colorado baby!
  • Rob Woytuck Weight is also a factor for ferries which for instance in British Columbia, Canada are part of the highway system.
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