Toyota will restart the delayed construction of its Mississippi plant, which will provide 2,000 jobs and be up and running by the fall of next year, the Japanese automaker said Thursday.
Toyota Motor Corp.'s auto plant in Blue Springs, Mississippi, was initially planned to be completed by 2010, but building was suspended after the U.S. economy nose-dived in late 2008.
The Mississippi plant will make 150,000 Corolla compact cars a year, moving back to North America production Toyota had temporarily shifted to Japan when it pulled out of a California joint venture with General Motors Co. in April, Toyota said. Initially, it had said it would make the Prius hybrid in Mississippi.
The development comes at an opportune time for Toyota, when the world's biggest automaker is struggling to fix an image battered by a spate of recalls, especially in its key North American market.
Toyota, which also makes the Camry sedan and Lexus luxury model, has been plagued by a massive quality crisis, resulting in the recall of 9 million vehicles around the world since October, mainly in the U.S. for problems such as gas pedal defects and braking software glitches.
Toyota was fined a record $16.4 million by U.S. authorities for dallying on the recalls. It faces more than 200 lawsuits in accidents, including fatal ones, suspected of being linked to defects, and those alleging the recalls caused the value of Toyota vehicles to plummet.
Toyota's image also suffered when it decided to close New United Motor Manufacturing Inc., known as NUMMI, the California plant it ran with GM, setting off protests among workers.
In a move likely to allay some of the anger, Toyota President Akio Toyoda announced last month a partnership with U.S. electric vehicle maker Tesla Motors Inc. to develop and build electric cars at the shuttered plant in the San Francisco Bay area.
Toyoda said he was happy to announce the latest decision on the Mississippi plant.
"We aim to give our full effort to manufacturing vehicles that can bring joy and to contribute to the region's economy and society," he said.
Mississippi Gov. Haley Barbour welcomed Toyota's decision and said he had believed in Toyota all along.
"We're delighted but not surprised," Governor Barbour said. "We've had good reason to keep our faith in them. Through a global economic crisis, Toyota kept its financial commitments to the state and to local schools, proving they are not just the world's premier automaker but a valuable community partner as well."
The state of Mississippi had committed $294 million to the project. But Toyota paid more than $10 million to the state to support road construction and extend water and sewer systems, and made donations to support local education, according to the governor's office.
The latest plan signals that Toyota is again getting ready to tackle a growth strategy, after managing to return to the black for the fiscal year that ended March 31. The Japanese automaker had racked up its worst loss in its history the previous fiscal year.
Analysts say Toyota's sales are improving but its return to profit is still shaky. Toyota had been on an expansion track until sales tanked from the financial crisis.
Yoshimi Inaba, president and chief operating officer of Toyota Motor North America, said the company couldn't restart the plant until it was sure of a recovery.
"With the return of stability to our existing operations in North America, it is time to fulfill Toyota's promise in Mississippi," said Inaba.
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