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back to index backAMERItalk November,  2005

CANADA: Toyota may double output, boost hiring at new plant

Ontario facility may turn out 200,000 vehicles

WOODSTOCK, ONT. -- Toyota Motor Corp. is already preparing to double output at its new plant in Woodstock, Ont., to 200,000 vehicles a year and boost employment to 2,000 from the originally planned 1,300 positions, industry sources say, just as its North American rivals are in turmoil.

The world's second-largest auto maker officially broke ground yesterday on the new plant and maintained the official line that 1,300 new workers will crank out 100,000 RAV4 sport utility vehicles annually once production begins in 2008.

But sources familiar with the company's plans said the auto maker needs the increased production because of its ever-increasing market share and is likely to use the Woodstock facility to add vehicles for its Scion entry-level brand, which is growing steadily in the U.S. market.

"That's what they've done everywhere they've built. It only makes sense," said one industry source familiar with the company.

The celebration along the north side of Highway 401 yesterday contrasts starkly with the tremors shaking the heart of the North American auto industry a little less than three hours drive away in Detroit.

The soaring health care costs and pension liabilities that helped send Delphi Corp. into Chapter 11 bankruptcy protection are also battering Delphi's former parent General Motors Corp. and GM's crosstown rival Ford Motor Co.

The two largest U.S. auto makers are also dealing with market share losses amid the fierce competition from Toyota and other offshore-based manufacturers.

Analysts warned yesterday that GM may soon follow Delphi into bankruptcy protection.

Ford, meanwhile, is expected to announce a restructuring plan next week that includes job cuts and plant closings.

Greig Mordue, a spokesman for Toyota Motor Manufacturing Canada Inc., said at the ground-breaking ceremony that the Japan-based company has a lot on its plate and further expansion isn't being contemplated.

The industry sources pointed, however, to a Toyota assembly plant in Indiana where original production expectations were doubled before the plant was completed.

The situation is similar at the new Toyota pickup truck plant in Texas.

All the expansions -- including the Woodstock site, where earthmoving equipment was clearing a farmer's field yesterday -- are designed to align Toyota's North American production more closely with its sales here.

Toyota outsold the Chrysler group last month in the U.S. market and Ford Motor Co. in Canada.

Toyota's existing plant in Cambridge, Ont., has also displaced Ford as the fourth-largest vehicle manufacturer in Canada behind General Motors Corp., the Chrysler group of DaimlerChrysler AG and Honda Motor Co. Ltd.

But Toyota is not interested in vaulting ahead of GM to become the world's largest auto maker, Toyota president Katsuaki Watanabe told reporters after the ceremony.

"We are driving to be the best," added Ray Tanguay, president of Toyota Motor Canada.

North America accounted for 30 per cent of the company's global sales last year and that number is expected to grow, Mr. Watanabe said.

The new Toyota operation is the first new assembly plant in Canada since Honda added a second factory at its Alliston, Ont., operations in the late 1990s.

Landing the plant is the high point of the Ontario government's Automotive Investment Strategy, which was set up to make sure the province remained competitive in the global sweepstakes for new auto plants.

Ontario has lured $4.5-billion worth of new automotive investments in 18 months, Premier Dalton McGuinty said yesterday.

"We have not passively presided over growth in the automotive sector," Mr. McGuinty said, pointing to a $70-million contribution that helped land the $800-million Toyota investment.

The federal government will kick in an additional $55-million.

It took more than money, however, with Prime Minister Paul Martin visiting Toyota in Japan last January to make the case for Canada and Ontario Economic Development Minister Joe Cordiano making several visits.

"I know that you have done this because of the great success of your Cambridge plant," Mr. Martin told Toyota officials at yesterday's ceremony.

The Cambridge plant employs about 4,300 people, who turn out Corolla compact cars and Matrix crossover utility vehicles, as well as the RX330 sport utility vehicle for Toyota's luxury Lexus brand.

It's the only plant outside Japan that manufactures vehicles for Lexus.

By March of next year the foundation for the new plant will be poured. The steel will go up in June and equipment will be installed in 2007.

Source: AOL - GAI

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