Toyota gets sweetheart deal to build a US Lexus

Kentucky offers a generous incentive to keep the Japanese automaker investing in the state.

By Forbes Digital Apr 19, 2013 1:56PM
Traffic copyright Pixtal, SuperStockBy Micheline Maynard 

Toyota announced Friday that it will invest $360 million in its Georgetown, Kentucky, assembly plant to produce the ES there, starting in 2015.

It will be the first time Toyota has built a Lexus model in the U.S., although it does build Lexus vehicles in Canada. And a big reason for the decision is an incentive package offered by the state of Kentucky, which has been on a drive to keep the companies that have invested in the state.

According to Bloomberg, the company will receive as much as $146.5 million in tax credits, significantly bringing down the overall cost of the investment. Bloomberg reported earlier this week that Toyota would have to invest $531.2 million and add 570 full-time jobs in order to yield the full value of the package.

The company said it would create 750 new jobs to build the Lexus ES, a luxury model that is based on the Toyota Camry, also produced at the Kentucky plant. Toyota said about 50,000 Lexus vehicles a year will be produced at Georgetown, bringing the plant's total annual production capacity to more than 550,000 vehicles. It will be the first time the ES will be assembled outside of Japan.

"This is a great day for Toyota and for the commonwealth of Kentucky," the state's governor, Steve Beshear, said at a Friday news conference.

Georgetown officials have wanted to build a Lexus model for years. The factory, which opened in 1986, is Toyota's largest outside Japan. It employs about 6,600 people, and assembles the Camry, Camry Hybrid, Avalon, Avalon Hybrid and Venza and manufactures 4-cylinder and V6 engines.

In 2012, the plant produced the 25 millionth Toyota vehicle built in North America. Toyota recently said it planned to boost production capacity for the 4-cylinder engine at the plant by more than 100,000 units. The $30 million project will create another 80 new jobs.

The investment by Toyota in Kentucky comes on the heels of its newest assembly plant, in Blue Springs, Mississippi, outside Tupelo. It also joins a series of investments by global auto companies in their American plants, most of which are located in the South.

Toyota faces a stiff challenge from Volkswagen to its title as the world's biggest carmaker, but its North American production network gives it a heads up on the German auto company on this side of the Atlantic.

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Apr 19, 2013 2:20PM
i love my toyota im a redneck from alabama and toyota rules!!!!!   best vehicles ive ever owned longest lasting vehicle ive ever owned getr done toyota
Apr 19, 2013 2:36PM
Ya didn't hav to adertise Dex....We all knu ya was a Redneck..Yup gitter...
Apr 19, 2013 2:16PM
The Japanese auto companies need a weak yen. Around 108.00 plus to make money ! They are moving production over here because of the cheapness to produce autos in the USA . The tax breaks are a joke . It just sucks money out of the State and counties and cities around this plant . Its no diff for like Wal-mart and the sorts . At least they will pay healthcare and $14.00 an hour jobs like the Big Three does . Its nice to see the jobs ? But as they beat down the union wages to 1980s levels like the UAW has their will be no economic benefits like it used to be .But then i must say Toyota is the most recalled car company in the World..BTW They are adding production to a plant that's running at 45% capacity , not building a new one ! So much for construction jobs . So the net job creation is minimal. And one more thing , notice they said (The plan could bring a long-term investment of $531 million over 10 years from Toyota and create 750 jobs, ) The best word in that is COULD... It sure did not say WOULD. 750 jobs is better than nothing in KY..Or will there only be 350 jobs ?
Apr 19, 2013 2:08PM

Okay....I talked about this BEFORE....


Where are all the NAYSAYERS about giving the BIG 3, bailouts and money...???


I'm NEVER going to buy a LEXUS or TOYOTA again...Goobermint F. Motors.


F...stands for Foreign or whatever you want to make it...

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