Earlier this year, the Toyota Motor Corporation announced a $1.3 billion production plant, its eighth in North America, to be placed on a 1,700-acre site in Blue Springs, Miss., near Tupelo.
Slated to employ around 2,000 workers and churn out 150,000 Toyota Highlander SUVs per year when production begins in 2010, Blue Springs hopes to follow in the footsteps of other areas which boomed upon the automaker’s arrival. Georgetown, Ky., is one such area, which more than doubled its population after Toyota opened a production plant there in 1988.
Like other Toyota towns, the area in and around Blue Springs can expect a wealth of new jobs in the construction sector as well as the need for local suppliers to the plant. The area is expecting a generous economic boom and is hoping to inflate its population from 8,400 to 15,000, according to South East Real Estate Business.
Map of Missippi with marker on Blue Springs
Toyota’s facility in Mississippi may just be its last in North America for some time, however; the
Wall Street Journal reports the car company will halt production of new plants in North America. Toyota’s top executives plan to review current strategies that have placed production facilities from as far as California to Ontario. While the U.S. remains the company’s most profitable market, executives worry that too many plants could lead to overproduction.
Original estimates for the Blue Springs facility were that 200,000 Highlander SUVs would be produced annually beginning in 2009, according to the Wall Street Journal. With production now set back a year, and capacity lowered by as many as 50,000 units, the Blue Springs facility is already subject to Toyota’s concerns about overproduction.
The automaker has been less hesitant about expanding the capacity of some of its facilities. Toyota commenced operations on its latest production plant in San Antonio last year. Originally slated to be an $800 million dollar venture capable of producing 150,000 Toyota Tundra full-sized trucks, the company inflated that number by 50,000, increasing the cost of the project to well over $1 billion. Part of the reason why Toyota chose to stop building new production plants could be that they discovered that expanding existing plants was more efficient.
According to the Wall Street Journal, Toyota is also planning to revamp its pay policies starting with the Mississippi plant. As of now, Toyota workers are some of the highest-paid manufacturers in the U.S. By changing entry-level pay structure and using more temporary workers, who typically make half the wages of full-time employees and earn fewer benefits, Toyota hopes to curb its inflating labor costs.
In light of recent announcements by the company, areas in and around Blue Springs are still looking at the possibility of 10,000 new jobs created both directly and indirectly by Toyota’s arrival. Toyota also plans to give as much as $50 million to schools in the area.
Toyota’s new production plant will of course impact the local economy. The effects the new pay structure may have on the Blue Springs economy are less certain. Overall, residents can expect a hot housing market in residential areas around the new plant; more jobs will create a higher demand in the real estate sector, which may only get hotter if the expected population boom occurs.
