Toyota delays Mississippi assembly plant indefinitely
NEW YORK -- Toyota Motor is delaying the start of production at its plant in Blue Springs, Miss., indefinitely as the top Japanese automaker copes with the downturn in the auto industry.
The plant was scheduled to begin production in 2010 and make the Prius hybrid.
Mike Goss, a spokesman for Toyota's U.S. arm, said Monday that the plant's construction is about 90% complete, and Toyota will finish the building. However, the installation of the factory's equipment and machinery — "the most time-consuming" element of construction, he said — is delayed indefinitely.
The roughly 100 people who have been hired to oversee construction and install human resources plans at the plant will not lose their jobs and will be assigned other duties, Goss said.
"Those people's jobs are safe, and we'll find things for them to do," he said.
Although Toyota's U.S. sales have held up better than those of its Detroit-based counterparts, the entire industry has seen a steep plunge, which Goss said forced Toyota to delay the plant's opening.
Carmakers industrywide have been having trouble making sales because consumers are skittish about making big purchases during the recession, and it has been more difficult and more expensive for some buyers to obtain financing in the tightened credit markets.
Toyota reported its auto sales in the U.S. fell 34% in November, while sales across the industry sank 37%. The company's sales are down 13% for the first 11 months of the year compared with the same period in 2007.
The automaker has also seen volumes of its once-popular hybrids plunge as gas amid the collapse in gasoline prices. The Prius, once a brisk-seller when a gallon of gas fetched well over $4 a gallon this the summer, saw its November sales plunge 48%. Toyota's other hybrids, like gas-electric versions of the Camry and Highlander, are facing even bigger sales declines.
The Mississippi plant, northwest of Tupelo, was initially to be up and running in late 2009 or early 2010, but earlier this year, Toyota pushed the date back to mid-2010 after seeing signs of a slowdown in the U.S. auto market.
Initially, Toyota planned to build its Highlander SUV at the Mississippi plant. But in July, as gas and oil prices hit historic highs, Toyota announced major changes to its North American production plans.
Toyota said instead it would assemble the Highlander in Princeton, Ind., and build the Prius, the world's best-selling hybrid vehicle, in the United States for the first time beginning in 2010 in Blue Springs.
Goss said Toyota has invested $300 million in the plant so far.