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A Site Selection Web Exclusive, May 2018
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The Scoop on Toyota-Mazda’s Drive to Alabama

Session at IAMC reveals how a $1.6-billion deal came together.

The 2018 Toyota Corolla.
Courtesy of Toyota.com.

by RON STARNER

Forget everything you thought you knew about the Toyota-Mazda project that landed recently in Huntsville, Alabama.

For 45 minutes on May 8 in Savannah, Georgia, several of the key players who helped put this $1.6-billion deal together offered a sneak peak behind the curtains into the inner workings of a high-stakes site selection process.

Tim Ingle, vice president of strategic planning for Toyota North America, joined three directors of Jones Lang LaSalle to break down the process that led the Japanese joint venture to choose Northern Alabama.

The grand prize, in addition to the $1.6 billion in capital investment, includes 4,000 high-wage jobs for Huntsville, an area rich in history and tradition in advanced manufacturing and transportation, although much of that history involves supporting travel through outer space.

Tate Godfrey, executive director of the Industrial Asset Management Council, moderated the panel at the Spring Forum of IAMC at the Westin Savannah Harbor Golf Resort & Spa.

Among the many revelations at this session were these nuggets:

  • Cost-per-vehicle metric was pivotal in the selection of Huntsville.
  • The team of site selectors from JLL covered 25 states in three weeks during the site search for Toyota-Mazda.

The Toyota executive and JLL directors said that Huntsville provided the least risk in meeting the rigid production timeline for the new plant. The JLL team included Trevor Ragsdale, senior managing director; Meredith O'Connor, executive managing director; and Christian Beaudoin, senior director of research.

In addition, a custom cultural index was created to make sure the host community would be welcoming to Japanese firms. Huntsville passed that test with room to spare, the JLL team said – a fact confirmed when Montgomery, the state capital, hosted Toyota President Akio Toyodo and Mazda CEO Masamichi Kogai for the official announcement on Jan. 10.

Alabama Gov. Kay Ivey and Huntsville Mayor Tommy Battle joined with the Japanese executives in making the announcement of the plant that will have the capacity to build 300,000 vehicles annually. The new plant will make the Toyota Corolla and a new Mazda crossover vehicle. Production is expected to begin by 2021.


“The strong incentives package offered by Alabama signaled that the state viewed the project as a partnership.”
Meredith O’Connor, Executive Managing Director, JLL

"With this announcement, our world changes overnight," said Tommy Battle, mayor of Huntsville. "Mazda and Toyota, two of the world's most innovative automakers, have created a legacy project that will provide jobs for decades to come for Huntsville and Alabama. It vaults Alabama to the top as an industry leader in producing the next generation of cars that will power our nation."

Alabama's winning bid to Toyota-Mazda included about $700 million in state and local incentives, according to a Site Selection article by Gary Daughters.

Packages offered by North Carolina and South Carolina both were believed to have exceeded Alabama's, according to Daughters, with North Carolina's bid, according to a source involved in the talks, topping the widely reported figure of $1.5 billion.

In response to a Site Selection query, Toyota says the 2,400-acre (971-hectare) Huntsville parcel, within both the city limits and adjoining Limestone County, "provided excellent site geography and supporting infrastructure, quality workforce, logistical factors such as proximity to Toyota's supply base, and the quality of life offered to our team members."

Meredith O'Connor of JLL noted that "the strong incentives package offered by Alabama signaled that the state viewed the project as a partnership."

All on the panel agreed that, above all, Toyota-Mazda wanted a partnership that would ensure the long-term success of the joint venture, the first of its kind by two Japanese conglomerates in North America.

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Inc. He has been with Conway for 16 years and serves as editor of the TrustBelt Report and lead organizer of the annual TrustBelt Conference. He also writes extensively for Site Selection and Conway's Custom Content Publishing Division. His Twitter handle is @RonStarner.

  



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