Toyota reportedly looking at Triad

April 18, 2006

By Richard Barron

Toyota officials said Monday they are researching whether to build a new U.S. factory, but would not confirm reports that sites under study include one near Greensboro.

The company, which is poised soon to overtake General Motors as the world's largest automaker, is also reportedly looking at sites near Chattanooga, Tenn., Roanoke, Va., and Arkansas, according to a report published over the weekend in The New York Times.

Such a factory would be an economic windfall to the region, bringing high manufacturing wages for hundreds of workers here and attracting dozens of suppliers that would also employ local workers. The paper said Toyota executives could recommend a site this summer.

On Monday, Toyota would only say that it's researching whether it will build a new factory.

"The real key is that we haven't made the decision whether we are definitely going to expand at this time yet," said Dan Sieger, a company spokesman from its Kentucky offices. "We're not even getting into where it would happen if we were to expand. We are looking at sites in a wide variety of states but as a matter of business practice we don't disclose where we're looking."

Toyota is looking for several attributes that it must have nearby to open a plant, Sieger said, including:

• the right piece of land: Experts say it could need between 1,500 and 2,000 acres.

• an interstate highway nearby.

• ready access to rail. About 75 percent of the company's cars are shipped by rail.

• a good available work force.

• a site not close to the company's other factories.

• financial incentives.

"Incentives are something that we do indeed look at," Sieger said. "But anybody who tells you they are the main (deciding factor) doesn't know what they are talking about. In all of our recent expansions we have not taken the highest incentives offered to us -- incentives are important to help you with the training and various infrastructure, but we have to define incentives that are in line with the local community."

Triad areas with less urban development and population, like Randolph, Rockingham and Davie counties, would be more likely to find big pieces of available land than congested counties like Forsyth and Guilford.

Guilford County would probably be out of the running, primarily because it has a limited amount of land and one other key problem: It doesn't meet the EPA's air-quality standards. That means expensive restrictions for businesses.

"I've had quite a bit of experience with auto companies looking for site selection services and the first thing we've done is automatically eliminate any area with non-attainment status," said Buzz Canup, president of the Site Selection Group for Angelou Economics, a Texas firm that helped Mississippi recruit a Nissan plant, among many other big clients.

If Toyota were to announce an expansion, it would kick off a bidding war that would bring states to the table with top-dollar incentives packages easily surpassing the $275 million North Carolina pledged for Forsyth County's new Dell plant.

"What would it take to close the deal in North Carolina? Who knows? I don't think that anyone would have envisioned that North Carolina would have come up with the type of package that they did for Dell," Canup said.

Locally, Dan Lynch, the president of the Greensboro Partnership, the city's economic recruiter, gave an answer that would be repeated by many of his colleagues: "I'm going to say no comment. That's how we typically handle these situations. It's better if we handle it that way."

Patric Zimmer, a former economic developer in Rockingham County who now represents companies seeking incentives, said, "Those kinds of projects can create a tremendous impact at many different levels," he said.

"Regardless of what people think, the incentives do make a difference at the end of the day. It typically is one of the key factors if not the key factor."

This would be the Triad's second attempt at landing a major auto manufacturing plant. In 1993, Mercedes-Benz announced it would build a $500 million plant in Alabama, a state that offered more than $300 million in incentives, three times what North Carolina offered for a site near Mebane.