Canada wins major Toyota factory
Ontario plant to create 1,500 jobs

By GREG KEENAN

Thursday, June 23, 2005 Updated at 5:57 AM EDT

From Thursday's Globe and Mail


Canada has won a major victory in the North American auto plant sweepstakes, with Toyota Motor Corp. set to announce next Thursday that it will build an assembly plant near Woodstock, Ont., that could eventually employ 1,500 people.

Toyota will invest about $600-million in what will be the first new vehicle factory in Canada since 1995, the seventh Toyota assembly plant on the continent and what has been an object of ardour in recent months by politicians from Ontario to California.

Ontario won out after intense lobbying by Premier Dalton McGuinty and Economic Development Minister Joe Cordiano -- who made two trips to Japan to pitch the province's case -- and a promise of $125-million in financial help from the Ontario and federal governments. Ontario will ante up $70-million and Ottawa the remaining $55-million, sources familiar with the impending announcement said.

Spokesmen for Toyota Motor Manufacturing Canada Inc. in Cambridge, Ont., and provincial government officials would not comment.

The announcement by the growing global automotive powerhouse represents the third significant investment the province has won since the creation of the $500-million Ontario Automotive Investment Strategy last year.

The provincial government has targeted the auto industry as a key engine of job creation, focusing on making sure existing plants are kept open, as well as winning new plants.

The Toyota plan follows investments by Ford Motor Co. of $1-billion to redevelop its Oakville, Ont., assembly complex and the $2.5-billion General Motors Corp. Beacon Project to revamp operations in Oshawa, Ont., and significantly expand its research and development capabilities in Canada.

Those investments, however, are in existing operations and will not create as many direct jobs as the new Toyota plant, which is scheduled to be up and running in 2008.

Industry, government and union officials watched with growing dismay earlier this decade as plants closed in Canada, while Alabama, Mississippi and Texas won billions of dollars in new automotive investments that turned the region into Detroit South.

"For Canada to win the new facility sweepstakes is a tremendous coup," said one industry observer, who noted that new plant announcements have tailed off in recent years since Nissan Motor Co. Ltd. began operating in Mississippi, Hyundai Motor Co. started producing cars in Alabama and Toyota announced construction of its sixth plant, which is located in San Antonio, Tex.

Toyota employs about 4,000 people at its existing manufacturing plant in Cambridge, Ont., which turns out the Corolla compact and Matrix crossover utility vehicle and is about 50 kilometres northeast of the site of the new plant along Highway 401.

The existing plant, which has been in operation since 1988, also turns out RX330 sport utility vehicles for the auto maker's luxury Lexus line. It's the only plant outside Japan to assemble vehicles for Lexus, which is considered a key sign of how highly Toyota officials in Japan regard the Canadian operations.

The new plant is expected to assemble RAV4 compact sport utility vehicles and possibly cars for Toyota's youth-oriented Scion brand, which is expanding rapidly in the U.S. market, sources at auto parts suppliers said. Scion vehicles are not sold in Canada.

A source at one parts maker said the new Toyota plant will lead to hundreds of new jobs at his company alone.

"Getting an assembly plant is a great anchor for long-term job creation," said a senior executive in Canada's auto parts industry.

A stronger Toyota presence also helps offset the potential impact in Canada of market share declines at Ford and GM. Toyota's share has been growing to the point where it has surpassed Ford as the second-largest auto maker in the world and it has a goal of capturing 15 per cent of the world vehicle market by 2010.

Damn we're on a roll with these things.

Oh sweet!

This means over 300 new jobs for Hamilton as well. Dofasco will create a new steel plant to supply steel for Toyota.

Toyota parent elevates Tanguay

JONATHAN SHER, Free Press Reporter 2005-06-24 02:04:51



The opening of a second Toyota plant in Ontario isn't the only sign of the growing role played by Canada in the automotive giant.

Toyota Motor Corp. in Japan yesterday elevated a Canadian who has presided over operations to a lofty place in the parent company -- only the sixth non-Japanese to attain that level.

Company officials said yesterday Ray Tanguay has been made a managing officer of Toyota Motor Corp., a position reached by two Americans and three from Europe and Asia.

The move is the latest big leap for Tanguay, who has risen to the heights of Toyota from unlikely origins -- he was born in the northern Ontario community of Matisse, near Timmins and Kapuskasing, a community so small and remote that it isn't on many road maps.

Tanguay, who was in Japan yesterday as Toyota shareholders participated in their annual meeting, also becomes a senior vice-president of Toyota Motor North America, Inc. and an executive vice- president of Toyota Motor Manufacturing North America Inc.

"It's a big deal," said Greig Mordue, speaking for Toyota Motor Manufacturing Canada.

Real C. (Ray) Tanguay joined Toyota Motor Manufacturing Canada in 1991 and two years later became vice-president in charge of manufacturing and engineering.

Later, as a senior vice-president, he was responsible for human resources, general affairs, information systems, purchasing, and production control.

In 2002, Tanguay became the first Canadian to become president of Toyota Motor Manufacturing Canada, taking the reigns at a critical time as the plant in Cambridge became the first outside Japan to manufacture the Lexus line.





Copyright © The London Free Press
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absolutely awesome, this will be huge for a lot of areas.

Toyota to built second Ontario plant

YURI KAGEYAMA
ASSOCIATED PRESS

TOKYO ? Toyota will build another car factory in Canada, its second in the country and seventh in North America, the Japanese automaker's new president said today, an announcement that marks a sharp contrast to the woes of American rivals General Motors and Ford.

"We are in the final stages" of the plans, said Katsuaki Watanabe, whose appointment won shareholders' approval last week.

Speculation has been rising that Toyota Motor Corp., the world's second-largest carmaker, will build another plant in the key North American market, where its sales and profits are growing.

The Wall Street Journal reported today that Toyota will announce detailed plans for the plant in Woodstock, Ont. Watanabe did not give details but said a formal announcement will be made soon.

Toyota has three assembly plants in the United States ? in Kentucky, Indiana and California ? with another set to open in Texas in 2006, as well as a plant each in Mexico and in Canada, at Cambridge, Ont. The Cambridge plant opened in 1989.

Although there isn't a final word on the Woodbridge plant, "it looks very promising," said Ontario Premier Dalton McGuinty.

The province is working with the federal government on what financial commitment might be part of the Toyota deal, as the governments have done with Ford and General Motors in the past year, McGuinty said.

"If you put your ear to the ground there is a buzz in the international auto community when it comes to Ontario," McGuinty said after a luncheon speech.

A new auto plant will encourage more parts makers and will ensure a solid future for the sector in the province, he said.

"It will enhance the size of the critical mass, and I'm convinced we will land some parts companies from Japan as well."

Toyota's strong performance in North America comes at a time when General Motors Corp. and Ford Motor Co. are eliminating thousands of jobs and GM has said it will close plants, although it has not specified which ones.

Standard & Poor's has downgraded GM and Ford debt to junk status.

Watanabe, 63, who appeared with his new management team at a Tokyo hotel, declined to comment on GM and Ford.

He said Toyota's intention is to produce cars where they are sold to become a good "corporate citizen" and avoid the kind of trade friction that emerged in America during the late 1980s and early 1990s.

Maintaining the spirit of an underdog while keeping growth going remains Toyota's main challenge, Watanabe said.

"At Toyota, we have always put the customer first. And our management is based on valuing people," he said. "We are continually taking up new challenges and we never become complacent."

Toyota plants are sprouting up around the world, including a new factory in the Czech Republic. Plants in Texas and China are set to start production next year, and in 2007 factories in Thailand and Russia are scheduled to open.

Adding a plant in Canada makes sense because demand for Toyota cars is expected to grow in North America, said Shinji Kitayama, auto analyst with Shinko Securities.

"The only problem Toyota has is logistics ? how to work well with parts makers and suppliers to keep production going," he said.

Akio Toyoda, grandson of Toyota's founder, who was promoted to executive vice-president from senior managing director, said he will start by learning his job ? overseeing product development and purchasing in addition to his old assignment of heading Internet-related businesses.

"Mr. Watanabe has told me I should value my curiosity that comes with my young age," said Toyoda, who at 49 is the youngest board member ever at Toyota.

Toyota expected to announce new plant Thursday

FROM CANADIAN PRESS

Toyota is giving the green light to build Ontario's first brand-new assembly plant in more than 15 years.

After months of political persuasion, federal and provincial officials will join executives of the booming Japanese automaker Thursday in Woodstock to herald the $600-million factory, sources confirmed to The Canadian Press.

Sources also said Toyota is targeting initial employment at the plant at 1,300, with more than double that amount of jobs expected to be created through suppliers and service firms feeding the plant.

The factory will produce the RAV4 and the Scion vehicles starting in 2007 for the 2008 model year.

The deal still requires final approval at a Toyota board meeting Thursday morning Tokyo time, but sources said that approval is a mere formality and there's nothing to derail the project's go-ahead now.

The announcement will end weeks of speculation about the plant, which will be located just a short highway drive from Toyota's massive complex in Cambridge, Ont.

Ontario Premier Dalton McGuinty and Economic Development Minister Joe Cordiano have confirmed they'll be in Woodstock on Thursday morning for an "important" announcement. Also on hand will be federal Industry Minister David Emmerson.

Ontario is contributing $70 million to the project and Ottawa is kicking in another $55 million.

The deal is considered a coup for the province, which hasn't had a so-called "greenfield" assembly plant — one built from scratch — since Cami Automotive, a joint General Motors-Suzuki venture, opened its Ingersoll factory in 1989.

It wasn't always Ontario's plant to lose. Industry observers say Toyota looked at a site in Arkansas before the U.S. Environmental Protection Agency tagged the county that owns the property for having air quality problems. As a result, Toyota looked elsewhere, and Canadian politicians found Woodstock was a favoured site early this year.

Emmerson and Prime Minister Paul Martin met in January with Fujio Cho, president of parent company Toyota Motor Corp., to promote Canada as the site for the manufacturer's seventh North American operation.

Cordiano has made two trips to Tokyo promoting Ontario for the investment, and government sources said he's been in almost daily contact with the company for months.

Municipal and regional officials spent months buying out land for the project, with one shopping mall owner yet to sell his property. However, sources said it's hoped that outstanding issue will be resolved in coming weeks.

One source said the political influence was significant since Ontario was competing against multiple American states including Texas, Michigan, Alabama and California — whose governor, former actor Arnold Schwarzenegger, went to Japan to persuade the automaker.

Several of those states were willing to offer hundreds of millions of dollars to Toyota in exchange for the jobs it would create and tax revenue it would provide.

However, Ottawa and Ontario's financial commitment is just a ``drop in the bucket" compared to what U.S. jurisdictions were willing to pay. In the end, Toyota was pleased with the in-person talks and commitments provided by Canadian politicians.

"We can't match (the U.S.) on the subsidy front. There's money (in the Woodstock deal), but I'm sure they could have got more in the States," a source said.

What also helped was that Toyota was already extremely pleased with its Cambridge operations. It's one of Ontario's top vehicle producers and is the only Toyota site outside of Asia that produces one of its Lexus luxury vehicles.

Other "obvious advantages" to building in Canada included a taxpayer-funded health-care system.

After the plant is built, Toyota will have more workers in Ontario than it has in any American state, except Kentucky.

With the initial jobs at the Woodstock factory, Toyota will have roughly 5,500 assembly plant workers in Ontario, including its Cambridge workforce. That total would be below what GM and DaimlerChrysler employ at assembly operations across the province but would rival the Ontario workforces of Ford and Honda.

Some of this info conflicts with prior information. The plant was indeed Ontario's to lose because Toyota wanted the new plant to be a "sister" plant to an existing nearby Toyota plant. Arkansas has no Toyota plant to act as the sister.

The US can offer all the money they want to get the plant built, but then Toyota is stuck with the higher operating costs longterm. Unlike US corporations, Toyota thinks many years ahead.

Toyota Plant Revs Up Hopes

Toyota’s $800-million investment in a new Woodstock assembly plant will be a boon to Hamilton workers and businesses.

And the benefits are likely to grow as the commitment increases to as much as $1.5 billion over the next decade.

“Woodstock is not far … from Hamilton, so there will likely be significant economic benefits,” said Gerry Fedchun, president of the Automotive Parts Manufacturers’ Association.

The operation will employ about 1,300 people.

Dofasco, which counts Toyota among its biggest customers, will undoubtedly be a major beneficiary. However, local auto parts suppliers could also see business improve. Even McMaster University, which has a research partnership with Toyota, could be in for a boost.

Premier Dalton McGuinty and Economic Development Minister Joe Cordiano, who vigorously pursued the project, will join federal Industry Minister David Emerson, Toyota Motor Manufacturing Canada president Ray Tanguay and other company officials for the announcement at a local secondary school.

The automaker will build the RAV4 and Scion starting in 2007 for the 2008 model year.

The most obvious beneficiary of the new plant will be Dofasco, which counts Toyota as one of its major customers.

“We do an awful lot of business with Dofasco,” said Toyota spokesperson Greig Mordue. “They are an important supplier not just for our Cambridge plant but across all plants nationally.

“Obviously there is a level of real confidence there and Toyota has a history of sticking with its vendors.” Dofasco president Don Pether has already said the Woodstock location could trigger a $200-million investment in a new galvanizing line in Hamilton.

With its current lines at capacity, the company would have to consider an expansion to meet a major new demand, he said.

Mordue added that “tiertwo businesses” — those that supply Dofasco with the raw materials it needs to create steel for Toyota — would also see business improve.

In addition to the 1,300 new jobs, the plant, which will be built in a field near Highway 401, will create employment for another 3,500 who work for parts suppliers.

At least nine Japanese parts makers and industry powerhouse Magna International Inc. have told the Ontario government that they will either build new parts operations in the area or expand existing facilities to meet demand from the new Toyota operation. It will be the company’s second assembly plant in Canada.

And with Woodstock less than an hour’s drive from Hamilton, local skilled workers could take advantage of the new jobs to be created at plant. Although exact numbers were not available, Mordue said there are a “surprising number” of people from Stoney Creek, Hamilton and Niagara Falls already working at our Toyota’s Cambridge operations.

That’s not all.

Studies by the Centre for Automotive Research in Ann Arbor, Mich., have shown that for every job created on an automotive assembly line, three more are created in the parts and components industry.

“The impact of those jobs then creates four more in the economy,” added John Tennant, chief executive officer for Canada's Technology Triangle Inc., which works in partnership with the centre.

“Those are the barbers, doctors, and Tim Hortons employees. Really, the impact will be tremendous.”

Mamdouh Shoukri, vicepresident of research and international affairs at McMaster University and the recipient of a Toyota research grant, said automotive researchers could also get a boost from the Woodstock plant.

McMaster has a strong link with Toyota, said Shoukri, who travelled to Japan in April to share information on automotive research with Toyota officials.

So does Mohawk College, which has long trained students in automotive trades.

Woodstock’s proximity to Hamilton may even have influenced Toyota’s decision to set up shop there, Shoukri suggested.

“Hamilton itself and what we can offer certainly could have had an impact on that decision,” he said.

Toyota selected Canada over at least five U.S. states which offered financial packages as high as $300 million. Toyota already has three assembly plants in the United States and an operation in Mexico in addition to the Cambridge complex. The company will open a sixth plant in Texas next year.

The close proximity to Cambridge will also allow the Woodstock operation to use the same suppliers and share knowledge from the other plant.

Canada’s lower health-care costs, a skilled labour pool and stellar performance of the Cambridge plant helped win the plant for the province.

The Cambridge plant is the only Toyota operation outside of Japan that builds vehicles for the luxury Lexus division.

Ontario will contribute $70 million in assistance including about $30 million for innovation, $20 million for training and $20 million in infrastructure such as roads and sewers.

Ottawa is adding another $55 million in aid for the project.

The federal and Ontario governments have boosted incentive packages in the past year to lure more investment here after seeing international automakers locate new assembly plants in the southern United States with major assistance including a heavy cash component.

this is good news, should be good for ontario

Winning the Toyota deal
THE AUTO CONTEST A small city, the province and the federal government took on the Terminator, and triumphed. Here's how.


TONY VAN ALPHEN
BUSINESS REPORTER

Joe Cordiano called it his "hurry up offence."

Ontario's Minister of Economic Development and Trade needed it badly on a frigid January morning in his pursuit of the biggest economic prize for any country: an auto assembly plant.

Toyota Motor Corp. officials had phoned and asked if the Ontario government could put together a land package of 1,000 acres for a plant. In just two months.

Cordiano still hadn't shaken off the thought of some U.S. state with bulging bags of money rumbling over Team Canada and snatching the plant he coveted. Among them was California Governor Arnold Schwarzenegger, the former Hollywood action hero and muscle man.

But Team Canada, which included Cordiano, Prime Minister Paul Martin, federal Industry Minister David Emerson, Woodstock area municipal officials and a small group of civil servants, employed a combination of Canadian politeness, perseverance and the benefit of an all-star plant in Cambridge to beat Schwarzenegger and at least four other American contenders.

"The first reaction from our people was that it was going to be difficult for us to put together that land in that time frame because we had never done it that quick," Cordiano said yesterday on his way to a hayfield in Woodstock. "I told them we had to get into our hurry up offence."

Cordiano formed a lot of hurry up offences after setting his sites on an auto assembly plant in early 2004. Ontario had fallen back in the auto plant game over the last decade. Billions of dollars in plant investments — and their job making magic — had landed in the U.S. south thanks to states that would do anything for them.

Free land? How much do you want? Water and sewer services? No problem. Tax Breaks? Right here. Cash? You got it.

The senior levels of government, labour leaders and academic researchers regrouped and devised a strategy, including incentive packages, to get Canada in the game again.

Cordiano made his first contact with Ray Tanguay, president of Toyota Motor Manufacturing Canada, in February 2004. His message: If Toyota is expanding again in North America, talk to us.

Tanguay had made the Cambridge plant a jewel in Toyota's worldwide network, with top product quality and productivity. He had become influential at headquarters in Japan.

Cordiano soon realized that Toyota would be expanding. A few weeks later, he was in New York meeting with Toyota's North American officials.

In March, Cordiano was in Japan. More meetings followed and it became clear that Canada might have a shot.

Federal and provincial government officials realized they had to demonstrate that Ontario wanted a plant and a partnership.

"They wanted a partnership with the government," Cordiano said. "They wanted to feel at home and wanted to be an integral part of the community. It's so important to them."

Meanwhile, teams from Michigan, Arkansas, Mississippi, Georgia and California were busy courting Toyota for its seventh plant in North America.

The cigar chomping Schwarzenegger landed in Tokyo in November 2004, where he got media star treatment. People regarded him more as a movie star and body builder than a politician. He proposed a California plant to build the environmentally friendly Prius. But the sizzle didn't really sell with Toyota's hierarchy.

In January 2005, Martin took a side trip on a Tokyo trade mission to meet with Fujio Cho, then president of Toyota Motor Corp.

The Prime Minister drove home the point that Canada would do everything it could to accommodate the auto giant.

It was a defining moment. Toyota officials thought a lot of a prime minister of a country who took the time to talk to them.

Within a day, Cordiano got a call in his office about the need for a site. He knew that some U.S. states had ready-to-build sites with all the trimmings.

Cordiano now realized Ontario was in the game. It was time for the hurry-up offence. Toyota wanted land in the region surrounding Cambridge. Three possibilities quickly emerged and municipal officials in Oxford County went to work under warden Donald Woolcott and Woodstock Mayor Michael Harding.

"We had to make sure the land was ready," Cordiano said. "It was critical. They wanted the shovels in the ground in August."

It didn't take them long. They hired an outside real estate agency that bought properties totalling almost 1,000 acres from more than two dozen owners in a block just east of Woodstock over about two weeks.

The site, including a golf course, farms, homes, bush and a gravel pit, was perfect. It was near major highways, railways and parts companies already supplying the Cambridge plant.

Meanwhile, Cordiano, who eventually visited Toyota in New York again, and federal Industry Minister David Emerson were busy working on aid packages for the company. The financial assistance was not a priority for the auto giant, but Canada had to offer something to compete with the U.S. state packages.

The U.S. packages remained a concern for Cordiano. One state was offering a package totalling about $300 million (U.S.), which would finance almost half of the plant's cost.

"I had a lot of sleepless nights," he said about the lingering U.S. competition.

In April, Cordiano returned to Japan on a trade mission, where he met with Toyota's officials again. Cordiano made Ontario's case one more time. Among other things, he emphasized that Canada's public health care costs are low and stable and its workforce is skilled.

Furthermore, statistics showed Canadian workers stay with their employers an average of 8.5 years in comparison to 5.5 years in the U.S. That fact alone made a significant impact on Toyota officials.

Tanguay was privately promoting Canada by using his own plant's record of superior quality and productivity. Toyota Corp. thought so highly of the plant that it awarded it production of a Lexus model a few years ago. It is the only plant outside of Japan to build a Toyota luxury model.

On the same trip, Cordiano saw Tanguay in the Canadian pavilion at Expo 2005. Tanguay informed him that Toyota had dropped plans at two U.S. sites and was focusing on Woodstock.

"Everybody was thinking now how do we make this happen in Woodstock," Tanguay said. "That was the message I gave him."

Cordiano then knew Canada was the frontrunner. With more hurry-up offences, the Ontario government put together a package worth $70 million for training, infrastructure and innovation. Emerson's federal department contributed $55 million.

On June 16, Toyota's board of management decided on building the plant in Woodstock. Yesterday, Toyota's board gave final approval in Tokyo.

One thing that is very interesting (to me anyway) is that the Toyota plant in Woodstock will have a 1,000 acre site and about 1,300 employees when the plant starts operations. That is about twice as much land as the Toyota plant in Cambridge - which employees 4,300. The giant Kentucky Toyota plant employees about 7,000 and has 1,300 acres.

Conclusion: If and when Toyota needs to expand again in NA, they may just expand the Woodstock plant - like they did at the Cambridge plant a few years ago - because they will certainly have the space to do so.

... oops ... I scored a double.

Adds to The Golden Horseshoes victory over The Rust Belt!