ANOTHER WIN FOR ALABAMA. New Toyota Plant. “Thank for not only investing in our great state, but in our people – By Todd Horwitz, Bubba Trading

 

ANOTHER WIN FOR ALABAMA

New Toyota Plant

Toyota Motor Corp.’s announcement Wednesday of Alabama as the home for a shared factory with Mazda Motor Corp. highlights a major shift in U.S. vehicle manufacturing: Foreign auto companies soon will build more cars and trucks in America than the Detroit giants.

In the first quarter of 2018, foreign makers are expected to produce 1.4 million vehicles in the U.S., WardsAuto.com projects, equaling their American rivals for the first time. That’s a leap from the same period last year, when foreign companies trailed Detroit auto makers by more than 100,000 vehicles, or roughly 10%.

“Being here today feels like a homecoming for Toyota and me personally,” said Toyota President Akio Toyoda at a ceremony to announce the new plant. “Alabama is already home to hundreds of our team members who build 700,000 engines per year for North American vehicles at our plant in Huntsville.” State officials were all smiles. The two plants will be only 14 miles apart. “Thank you for choosing Alabama,” said Gov. Kay Ivey at the ceremony. “Thank for not only investing in our great state, but in our people.

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To bring in Toyota and Mazda, Alabama put the bulk of its incentives into a jobs credit, worth $90.6 million over a decade, and an investment credit, good for $210 million over the same period. There also was reimbursement for eligible capital costs, state sales tax abatement, a non-educational property tax abatement and promise that the state employment agency will build and operate a training center.

Meanwhile, Detroit’s car makers—long stung by costly overhead and a capacity glut—will become more reliant on lower-cost countries in coming years as executives seek to avoid being overly exposed to their American workforce. Once nearly entirely dependent on Midwestern plants, GM and Ford are boosting the share of vehicles they import from China, Mexico or even India.

Keep those stops tight
Todd “Bubba” Horwitz

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.