Toyota, Mazda to build $1.6B joint plant in Alabama

Location made official this week

NEW YORK (CNNMoney) - Toyota and Mazda plan to build a $1.6 billion auto assembly plant in Huntsville, Alabama that will employ 4,000 workers.

The plant's location was made official Wednesday afternoon. The companies originally announced plans for a U.S. plant in August when the two Japanese automakers signed a joint venture agreement, though the exact location was not known at that time.

"Alabama is truly honored to have been chosen for this project," Gov. Kay Ivey said at a press conference.

The plant is expected to start building cars in 2021, and will eventually churn out 300,000 vehicles per year. Employees will be paid an average annual salary of $50,000, Ivey said.

Toyota will use the plant to build its best-selling compact car, the Corolla, while Mazda will use it to build a new crossover vehicle.

Toyota had originally planned to build a new Corolla plant in Mexico, but after the joint venture plans were announced in August, Toyota changed course and decided to build the Tacoma pickup at the plant in Mexico and the new Corolla at the new U.S. plant.

Toyota had been under fire for building Corollas in Mexico. Just before taking office last January President Trump attacked Toyota's plans.

"Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY!" Trump tweeted. on Jan. 5, 2017. "Build plant in U.S. or pay big border tax."

But despite the threat of a border tax, Toyota is moving ahead with plans to build trucks at the Mexico plant, even if it will not build Corollas there.

The company had been making Corollas in the U.S. at a plant in Blue Springs, Mississippi, and always planned to keep making vehicles there. By building the new Corolla plant in Huntsville, rather than Mexico, it will have easier access to suppliers of Blue Springs plant. Those suppliers are mostly based in the South.

Toyota has 10 existing U.S. factories, including an existing engine plant in Huntsville which opened in 2001 and employs 1,450 workers. Overall it has 36,000 U.S. employees, not including those at dealerships. It produces most of the cars and trucks it sells in the U.S. at those U.S. plants and exports some of those cars to other markets.

Most of Toyota's U.S. plants are in the South, and all are non-union. Mazda does not currently have any U.S. factories. Other foreign automakers have built plants across the South as well.

Alabama is the fifth largest state in terms of auto production, with more than 1 million cars built there annually. In addition to the existing Toyota engine plant, the state is also home to plants for Hyundai, Honda and Mercedes-Benz. It also has a relatively low unemployment rate of only 3.5 percent, the lowest rate in the state's history.

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