Texas Toyota Plant Proves Attractive to Businesses

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When Toyota Motor Corp.'s (TM) first San Antonio-made truck rolls off the line this month, local officials hope it is also the rollout of a new character for this South Texas tourism hub — a relocation target for major manufacturing businesses.

The No. 3 automaker's 2,000-acre plant site just south of the city, plus the 21 suppliers working with it, are expected to add more than 4,100 jobs, most of them local, the company said. The highly automated plant could eventually manufacture as many as 200,000 Tundra pickups a year.

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"Toyota coming here broke the ice, cleared the way for other corporate boards across the U.S. to say San Antonio might be a good place to put an expansion or headquarters," said San Antonio Mayor Phil Hardberger.

The offers are not pouring in yet by any means, but talks have started. More than two dozen manufacturing operations have set up shop here or expanded since the Toyota announcement. They include aircraft manufacturer Sino Swearingen Aircraft Corp., which this summer announced it will build a $20 million facility at the San Antonio International Airport and create 850 new jobs in the area over the next decade.

While home to the headquarters of corporate powerhouses Clear Channel Communications Inc.(CCU), AT&T Inc. (T) and Valero Energy Corp.(VLI), manufacturing work often provides well paying jobs that can be filled by those with less education, said Bexar County Judge Nelson Wolff.

Wolff said among companies actively considering San Antonio for some level of operation 40 percent have manufacturing potential. That figure was as low as 10 percent before the fateful February 2003 announcement by Toyota that the city would be home to a new plant.

Demand is much of what sealed the decision for Toyota to land in San Antonio, said Mike Goss, spokesman for Toyota Motor Engineering & Manufacturing North America Inc.

He and others estimate that between one in five and one in seven pickup trucks sold in the U.S. is bought in Texas.

Wolff said Toyota could have built its plant in the Midwest, with its ready-made infrastructure, supplier base and transportation lines, or San Antonio, which was better for marketing.

"We all believe that the success of this project will come only with good cooperation within Toyota Motor Manufacturing, Texas, good cooperation with team members and onsite suppliers, and of course wonderful cooperation with the community," said Hidehiko Tajima, president of Toyota's Texas arm. "And so far we have all of that."

Officials also hope the plant will be a boon to one of the city's poorer areas.

"This is a big change for the south side, we'll see how it plays out," Wolff said. "I think it will have a big impact. It will take several years to see."

Hardberger concedes there are some negatives to most growth but called the Toyota development a "single-edged sword. And we're wielding it."

"I think it's universally going to bring up that area," he said. "The whole living standard will be brought up."

And Joseph Krier, president and CEO of the Greater San Antonio Chamber of Commerce, wants Toyota to know there's room for growth.

"If this plant does well, and of course if the truck industry does well, and that's a big if ... but if this plant does well and their truck sales do well, we hope that we can sit down with Toyota in four or five years and talk about a major expansion of this plant," he said.