Toyota Reinforces Commitment in the Commonwealth as Georgetown Site Prepares for the Future
FRANKFORT, KY (STL.News) The future is now for Kentucky’s automotive industry, as today Gov. Andy Beshear announced Toyota Motor Manufacturing Kentucky Inc. (TMMK) in Georgetown will transition 1,400 indirect employees to direct Toyota roles and invest $461 million in upgrades, including preparation for future vehicle electrification.
“Kentucky’s automotive industry is growing at a record pace, and Toyota Motor Manufacturing Kentucky is at the center of that growth,” Gov. Beshear said. “Toyota changed the landscape of manufacturing in our state when the Georgetown facility first opened more than 30 years ago, and now the company is preparing for future growth. I am thrilled that future will include Kentucky in a significant way.”
The investment at TMMK will bring advanced manufacturing equipment and technologies, increase the plant’s operational speed and flexibility, and add a new 2.4-liter turbo engine line to support an expanded range of vehicles produced in North America. The project also includes a new, direct hire employment structure. Approximately 1,400 indirect team members, currently employed through Kelly Services, will be offered a direct Toyota position, along with all new hires.
The improvements will expand TMMK’s ability to produce new products, including future electrification.
“As Toyota’s most experienced assembly plant in the U.S., TMMK must transform physically and strategically to meet the changing needs of customers,” said Susan Elkington, president of TMMK. “I am confident in our highly skilled team members who drive us forward every day as we prepare for the future of advanced manufacturing, whatever the products might be.”
The Georgetown site was Toyota’s first plant in the U.S. to manufacture hybrid electric vehicles, in 2006, and recently announced it will assemble fuel cell modules for use in hydrogen-powered, heavy duty commercial trucks starting in 2023. The plant also plays a critical role in Toyota’s global electrification strategy, with an aggressive goal to offer electric or hybrid versions of every vehicle model by 2025.
With a total of $8.5 billion invested, TMMK is Toyota’s largest production facility globally and currently employs approximately 9,000 team members. Opened in 1988, more than 12 million vehicles have rolled off TMMK’s assembly lines, including America’s best-selling sedan (Camry) and best-selling SUV (RAV4). Current production capacity is approximately 550,000 vehicles and 600,000 engines annually, with a supplier base of more than 350 suppliers nationwide – including over 100 in Kentucky.
Kentucky’s automotive industry includes more than 525 facilities, employing over 100,000 people full-time. Including Toyota’s investment, automotive-related companies have announced over $6.5 billion in new investments this year and 6,900 full-time jobs for Kentuckians.
TMMK also has helped drive foreign-direct investment from Japanese-owned companies in the commonwealth. Currently, nearly 200 Japanese-owned manufacturing, service and technology-related facilities are located throughout the state, employing close to 47,000 people full time.
Scott County Judge/Executive Joe Pat Covington said TMMK will continue to be an important part of the local business community for years to come.
“The investment that Toyota continues to make in our community, region and state will provide the flexibility to adjust to the changing automotive market and confirms their confidence in Georgetown and Scott County as being a vital part of their vision for the future,” Judge/Executive Covington said. “On behalf of Scott County, we are grateful for the investment.”
Georgetown Mayor Tom Prather said the community is proud to continue its partnership with Toyota.
“The City of Georgetown is delighted to be a partner with Toyota Motor Manufacturing Kentucky’s latest announcement to expand and invest at the Georgetown facility; the largest Toyota plant in the world,” Mayor Prather said. “The investment foundation continues to be built and we, along with our other automotive partners, look to build upon their commitment to our community.
Jack Conner, executive director of Scott County United Inc., said the project emphasizes Georgetown is the perfect fit for Toyota’s continued growth in Kentucky.
“Once again, we are so pleased that Toyota Motor Manufacturing Kentucky continues to invest in our community, region and state,” Conner said. “After 35 years, the investment substantiates we are indeed a great place to do business!”
Toyota’s investment furthers recent economic momentum in the commonwealth, as the state builds back stronger in response to the effects of the pandemic.
Today’s TMMK announcement brings total investment by Kentucky companies over the past two days to more than $1.26 billion in new investments, with over 1,700 full-time jobs in addition to Toyota’s 1,400 transitioned team members.
This year, the commonwealth has shattered every economic development record in the books for yearly investment totals. Year-to-date, private-sector new-location and expansion announcements include over $10 billion in total planned investment and commitments to create 14,000 full-time jobs across the coming years. Through September, Kentucky’s average incentivized hourly wage is $24.15 before benefits, a 10% increase over the previous year.
In July, thanks to strong fiscal management by the Beshear administration, the state budget office reported the commonwealth ended the 2021 fiscal year with a general fund surplus of over $1.1 billion – the highest ever in the commonwealth – and a 10.9% increase in general fund receipts to $12.8 billion.
In May, Moody’s Analytics published a positive economic outlook for Kentucky, noting mass vaccination as the driving force behind a sustained recovery in consumer services. The state’s recovery, Moody’s said, benefited from earlier reopening efforts and increased demand for manufactured goods over services. The report also found Kentucky’s manufacturing industry outperformed the nation’s since the national downturn last year.
Fitch Ratings in May improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.
In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million. Site Selection also recently placed Kentucky in a tie for fifth in its 2021 Prosperity Cup rankings, positioning the state among the national leaders for business climate.
To encourage investment and job retention in the community, the Kentucky Economic Development Finance Authority (KEDFA) approved a supplemental project to an existing Kentucky Jobs Retention Act (KJRA) program agreement with the company. The performance-based agreement can provide up to $212.5 million in cumulative tax incentives based on the company’s total cumulative investment of $2.2 billion across the original and supplemental KJRA projects with an annual job target requirement of up to 8,250 over the term of the agreement.
By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.
In addition, Toyota can receive resources from Kentucky’s workforce service providers. Those include no-cost recruitment and job placement services, reduced-cost customized training and job-training incentives.