Toyota selects Texas for new truck plant

SAN ANTONIO, Feb. 5 (UPI) -- Toyota will build an $800 million truck assembly plant near San Antonio, an economic prize that will mean 2,000 new jobs and $2.4 billion to the state's economy in the next decade, company and state officials said Wednesday.

Gov. Rick Perry joined Toyota officials in announcing that Texas had beat out at least seven other states in the competition for the plant that is scheduled to begin production in 2006, initially manufacturing Tundra pickup trucks.

"San Antonio, you asked for it, you got it!" Perry yelled to a cheering crowd.

Employment at the plant could jump to 4,300 if Toyota decides to increase production from Tundra pickups to sports utility vehicles. Perry said the plant would change the economics of San Antonio and all of Texas forever.

"In 2006, $100 million in wages will be generated for 2,000 employees, 99 percent of whom will come from the local area," he said, adding that the plant will add $2.4 billion to the Texas economy over the coming decade.

"The ripple effect will lead to an additional 5,300 spin-off jobs, which will contribute another $4 billion to this economy," the governor said.

Perry said the incentive package dangled before Toyota totaled $133 million, which he said was not the "largest incentive package" that was presented to Toyota, but it was the strongest.

San Antonio Mayor Ed Garza said the Toyota announcement boosted the city's presence as a "multi-national city."

"Two thousand jobs, 95 percent hired locally, and after three years a skilled worker will make around $70,000 a year," he said.

San Antonio is one of the poorest major cities in the country and has never had a manufacturing base. It recently lost its largest employer when Kelly Air Force Base closed in 2001.

"Toyota appreciates the opportunity to do business in the state of Texas," said Dennis Cuneo, senior vice president of one of the world's largest car companies. He promised the Texas plant would be "the most profitable Toyota operation in the United States."

The popularity of pickup trucks with Texans was believed to be a factor in Toyota selecting Texas, as was its close proximity to Mexico, where it can utilize expanding parts factories. The company is also plans to open a truck plant there in 2005.

General Motors operates the only other assembly plant in Texas. At Arlington, the company employs about 3,000 workers and makes full-size sports utility vehicles.

Cuneo cited several factors, including the state's willingness to invest $15 million to build a dedicated rail line into the proposed plant site and commitments for a regional training program, for Toyota's decision to locate in San Antonio.

But businessman and Toyota dealer Red McCombs said the decision eventually centered on the buying habits of Texas consumers. Texas is the largest market for pickup trucks in the world, a market Toyota has said it will aggressively pursue.

"I think the thing that caused the attention in the first place was the huge population of pickup trucks that we have in Texas," McCombs said.

The plant will turn out 150,000 full-sized, Tundra pickup trucks per year, many of which will be marketed in Texas.

The announcement was also a boost to San Antonio's south side, a working-class neighborhood often overshadowed for development by the city's more prosperous north side.

"I can't wait to see exactly what this is going to do for development," said Cindy Taylor, president of the South San Antonio Chamber of Commerce. "This is development with a capital 'D'."

Joe McKinney, chairman of the San Antonio Economic Development Foundation, compared landing the Toyota plant with "winning the Super Bowl, the Nobel Prize, and the World Cup all in the same day."

Toyota originally scouted sites in several states when it decided to build an additional truck plant in the United States, and Cuneo said Texas was way down the list of choices at that time. But the choices were narrowed in recent months to San Antonio and a site near West Memphis, Ark.

Ground is expected to be broken on the plant this summer. Toyota Chairman Fujio Cho will be in San Antonio on Monday to preside over Toyota's official welcome to Texas.