January 21, 2007

A Tennessee Toyota Plant?

A report in an Arkansas newspaper says Toyota will build a new auto assembly plant either in Chattanooga, Tennessee, or in Marion, Ark., across the Mississippi River from Memphis. The Sunday Tennessean has the details. A few days ago the Tennessean reported the possibility that Tennessee officials were involved in secret negotiations with Toyota.

Count me as one person hoping that, this time, Tennessee doesn't fork over truckloads of cash to win the bidding war. Toyota is a highly profitable company - reporting a $3 billion profit one recent quarter, so they certainly don't need Tennessee tax dollars to make their project feasible or profitable. Also, while a Toyota plant in Chattanooga would certainly create many new jobs for Tennesseans, that would be true too if the plant was built in Arkansas just across the Mississippi River from Memphis, which is home to the bulk of the population in that area.

Don't get me wrong - Toyota is, hands down, the best car company on the planet right now, and its going to get even better. But there's not a huge difference to Tennessee in locating the plant in either location, because it still will fuel the business and growth of jobs at auto parts suppliers in the state that already do business with Toyota's Kentucky operations.

Given those factors, if Toyota really is down to picking between Chattanooga and the site in eastern Arkansas, Tennessee should offer nothing more than standard infrastructure improvements - road and rail - that any major manufacturing plant would require.