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.

More from Forbes
Tags: ForbesTM
4Comments
Apr 19, 2013 2:20PM
avatar
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
avatar
Ya didn't hav to adertise Dex....We all knu ya was a Redneck..Yup gitter...
Apr 19, 2013 2:16PM
avatar
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
avatar

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...

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

122
122 rated 1
288
288 rated 2
472
472 rated 3
638
638 rated 4
628
628 rated 5
704
704 rated 6
609
609 rated 7
489
489 rated 8
275
275 rated 9
129
129 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
ITUBITAU UNIBANCO BANCO MULTIPLO S.A.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.