Toyota eyes Md. sites for engine plant Washington County, Cecil most likely locations in state

Automaking

March 06, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Toyota Motor Corp. is considering Maryland for the site of a new engine plant that would create at least 150 jobs and partially stem the tide of declining manufacturing in the state.

The world's third-largest automaker, which will require the new facility to supply 350,000 engines annually for its Corolla models made in California and Canada, is focusing on sites in Washington and Cecil counties, state and other sources said yesterday.

"We're hopeful at this point," said Joy Koch, a foreign investment representative in the state's Department of Economic and Employment Development. "Our understanding is that the site selection process is open."

Toyota's decision to locate a new assembly plant in the United States marks the latest step in a push to localize its operations and reduce exports from Japan. By the end of the decade, Toyota hopes to import only 100,000 cars and trucks a year from Asia, roughly 10 percent of all its vehicles sold domestically.

Last year, Toyota selected Indiana for a new $700 million truck plant that will employ 1,300 when it opens in 1998. That facility is in addition to the significant investments the company has made in Kentucky, where it builds Camrys and Avalons and where Toyota will base its North American manufacturing headquarters.

"They're trying to establish a global procurement system for parts and vehicle manufacturing, a process that has changed enormously in the past 10 years because of external pressures from governments, currency and other factors," said Helen Koons, a Kankaku Securities analyst in New York who follows Toyota.

"At the same time, they're beginning to perceive of themselves as a global company, and they're looking for ways to change from a mainly Japanese company," she said.

A Toyota investment in the state would come at a time when Maryland has suffered from the loss of several notable manufacturers, including Procter & Gamble, Campbell Soup Co. and Chun King Corp.

Most recently, Bausch & Lomb Inc. stunned Oakland in January by announcing plans to shutter its sunglass lens operation there in favor of Texas, terminating 600 jobs and an $18 million payroll.

Officials with Toyota, a $116 billion company that sells more than 1 million cars a year in the United States, declined to provide specifics about the new engine plant but did acknowledge that the search for such a facility has been on since last June.

"We're looking at a variety of different sites," said Frances Champion, a spokeswoman for Toyota Motor Corporate Services North America Inc. "At this point we have no timetable, although we'd like to move ahead as soon as possible."

Toyota has been focusing on sites around Hagerstown, in Washington County, and throughout Cecil County primarily because industrially zoned property there is abundant and relatively inexpensive compared to the Baltimore metropolitan area.

Toyota will require about 200 acres of land with railroad access to receive parts for its new plant, sources said. By comparison, the buildings at General Motors Corp.'s Broening Highway minivan plant cover 80 acres.

"Cecil County contains a number of large, industrially zoned sites with superior transportation infrastructure and is rail-served by CSX and Conrail," said Lloyd Sanders, director of that county's economic development office.

Mr. Sanders added that he has had only "informal" discussions ** with his state counterparts about Toyota's needs and hasn't personally spoken to company executives.

Washington County officials could not be reached for comment.

Although Maryland is expected to receive some consideration, company analysts said the engine plant will likely be built in a state such as Kentucky, which has received the lion's share of Toyota manufacturing jobs in the United States in exchange for financial incentives.

In 1986, Kentucky provided Toyota with $147 million in incentives after it chose Georgetown, Ky., for a large assembly plant.

Pub Date: 3/06/96

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