Toyota Motor and Mazda Motor stated on Wednesday they will construct a $1.6 billion joint assembly plant in Alabama that will hire approximately 4,000 employees, a boost for President Donald Trump, who wants auto companies to broaden U.S. production.
Toyota CEO Akio Toyoda and Mazda CEO Masamichi Kogai joined Alabama Governor Kay Ivey in Montgomery at an occasion to announce the decision.
“Welcome to sweet home Alabama,” Ivey stated to the two executives, after saying the awaited 4,000 workers at the plant to be constructed in Huntsville would make an average of $50,000 a year.
The plant will produce 300,000 vehicles annually and must open on a 2,500-acre former cotton field in 2021, about 14 miles from Toyota’s engine plant in Huntsville.
Trump tweeted Wednesday night that the move was “Good news” for the U.S. economy.
“Companies are returning to the U.S. in a very big way. Congratulations Alabama!” he tweeted.
Toyota prepares to construct Corolla cars at the plant, while Mazda will construct crossover SUVs.
Alabama will provide tax rewards. Officials stated the state tax incentives were worth $370 million, however they did not reveal how much the local incentives were worth.
But with U.S. auto market sales declining, the new plant might exacerbate overcapacity and add pressure to cut prices. U.S. new vehicles sales dropped 2 percent in 2017, after hitting a record high in 2016, and are expected to decline further in 2018.
Huntsville Mayor Tommy Battle said the plant will “provide jobs for decades to come for Huntsville and Alabama. It vaults Alabama to the top as a market leader in producing the next generation of automobiles that will power our country.”
Among U.S. states, Alabama is currently the 5th largest manufacturer of cars and light trucks. The state has more than 150 major auto suppliers and 57,000 automobile manufacturing jobs.
