Toyota Will Build Corollas in Mothballed Mississippi Plant

By Chris Haak

Before the global economic collapse, when Toyota began construction of its new plant in Tupelo, Mississippi, the automaker had planned to build Highlander crossovers at the plant, as Highlander demand was booming at the time.  Before tooling for the plant had been installed, a series of events conspired to change Toyota’s plans.  First, Tundra sales significantly slowed, so that Toyota was able to shift all Tundra production to San Antonio, leaving extra capacity in Princeton, Indiana.

Princeton’s capacity was then absorbed by moving Highlander production that had been intended for Tupelo to Indiana.  Tupelo was then left without a product, but Toyota subsequently announced plans to produce the Prius there.  When the global auto market slowdown hit, Toyota no longer needed the capacity to produce the Prius, so the company completed the exterior shell of the Tupelo plant to prevent damage, then left it vacant while it decided what product to produce there.

Meanwhile, GM declared bankruptcy, shut down its Pontiac division, and exited its NUMMI joint venture with Toyota in California.  NUMMI had produced the Pontiac Vibe, Toyota Corolla, and Toyota Tacoma pickup.  With Toyota having extra production capacity, NUMMI being Toyota’s only unionized plant in the US, and enough spare capacity to absorb Tacoma production at the sprawling truck plant in San Antonio, Texas, NUMMI became expendable.  The only question was then what to do about Corolla production.

The Corolla is currently built in Japan and in Cambridge, Ontario.  Once the Tupelo plant is on line in the fall of 2011, essentially all Corollas sold in the US will be built in North America.  According to Toyota, because the plant’s construction is essentially finished, it will shortly begin hiring the 2,000 employees who will staff the plant and install the production equipment.

Toyota’s decision to kick off Mississippi production with the Corolla makes sense on a number of levels.  Building the cars in the NAFTA zone makes sense from a logistics standpoint, not to mention partially insulating the cost of the cars from currency fluctuations between the yen and the dollar.  Also, much of the production tooling for Corollas already exists from the shuttered NUMMI plant, so Toyota can save $500 million in projected costs by reusing old equipment instead of buying new equipment.  Previously, Toyota expected to invest $1.3 billion in the Tupelo, Mississippi plant to produce the Prius there; by using NUMMI’s Corolla tooling, the cost drops to $800 million.  Humorously, some of the $500 million savings also comes from re-purposing unused equipment such as desks, forklifts, and tools from other Toyota plants such as Georgetown, Kentucky, that have been in place for a quarter century.

Toyota’s North American production boss, Steve St. Angelo, also indicated that the long-term plan is still to build the Prius in the US.  Currently, all Priora are imported from Japan.  He would not, however, give a specific number for Prius sales at which point the company would want to build the car locally.  If and when Toyota decides to build the Prius in the US or Canada, it will almost certainly expand an existing plant to do so, rather than building an all-new facility.  The new plant in Tupelo is slated to receive future investments, and has room to grow, so it’s entirely possible that this plant might someday still build the Prius.

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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7 Comments

  1. As a native of Tupelo, this is a welcome turn of events. We thought we would be able to avoid the recession with Toyota pumping greenbacks into our local economy. But Toyota couldn’t avoid the recession, and got out of Dodge (errr…Tupelo). As a result, the economy stalled and the construction business was hit hard. Maybe now we can move all these bank-owned new construction properties around here. Bring on the (all be it very boring) Corolla!!!!

  2. The UAW under new president Bob King is planning protests of Toyota for not reopening the NUMMI plant and retaining UAW workers as part of a general effort to unionize foreign company plants. Considering the increased cost of UAW workers (with no real benefit) along with the headache of dealing with the UAW, why would Toyota ever want to deal with the UAW again? And considering employees at Nissan’s plant in Smyrna, TN soundly rejected unionization, it doesn’t appear the workers at these plants really see the benefit of the UAW. The UAW is screaming to be relevant again, but no one is listening.

  3. I have lived in michigan most of my life. I have worked for auto suppliers for 25 years. Making parts for everyone from GM to Subaru. Never been a union and never will be…Their purpose (labor unions) 60 years ago was important and relevant, that is no longer the case..

  4. It will interesting to watch how Big Three will handle UAW this time. There will be no second Obama-coming to help so if they go bankrupt – then so be it, finally.

    I am from California. Toyota discarded NUMMI plant and for good reason. CA will default also because of public union contracts. Who cares what UAW does – reality will take its toll regardless what UAW or Sacramento want.

  5. Well – you might be all happy down there in Mississippi with your new big time $20/hour jobs – but your killing our $45/$50 hour jobs here in Cambridge. I make over 100K/year on a mindless assembly line making Corolas and live like an executive. I guess it could not last forever.

  6. Awwwee poor Canuck!!! My husband (A UNION CARPENTER FROM LOCAL 223 IN NASHVILLE) Is on his way down to Mississippi to begin building a workplace that willl BOAST OF UNION NEGOTIATED WAGES for my friends and family members down there that have worked harder than any americans any where for so little pay and and now are well deserving of a decent wage! And yessir $20+ per hour may seem petty to an unappreciative executive such as yourself, but it is a welcomed blessing to “those people” down there! KNOW THIS PAL; They will out work you, for less pay! (for now) And work circles around your selfish ass and they will do it with far more pride than you have shown here! AND THEY WILL DARN SURE APPRECIATE IT!! They will gain recognition for their kind, humble hard working characters therefore calling attention to other companies such as Toyotathat have had the insight to bring work there AND EVENTUALLY YOU WILL BE THE ONES BEGGING FOR UNIONS TO HELP YOU WITH YOUR LOWER THAN LIFE WAGES AND BENEFITS!!! Then sir you will not only appreciate your fellow man and be thankful to GOD that they have been for once cut a small break, but you will appreciate your own good fortune for a change!
    Sincerely,
    Proud To BE UNION WIFE BORN IN TUPELO

  7. You know, Bush is the one who promised the bail outs for the GM and Chrysler who were both mostley owned by Cerberus at that time
    http://en.wikipedia.org/wiki/Cerberus_Capital_Management who is filled with a bunch of prominent republicans, For the previous 6 years, Bush gave GM money, for every american GM car factory that was closed, GM was given low interest Tax payer loans to open plants in China, sad but true. The Dems blocked giving the 2nd half of bailout untill they agreed to conditions that would fix the problems, Cerberus refused consessions and thats when Obamma temporary took over. The biggest pain is the GM WHITE COLLAR workers, they talked about how great Bush was, how obama sucks (he saved there sorry ass) and they talk about how they shop at walmart because its a global economy, but say your unamerican if you dont buy there car to pay there overpaid asses. Really, the GM White collar types are the most stupid, ignorant overpaid people there are.

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