The Trump effect: Japanese carmakers adding 4,000 jobs at new car assembly plant

As the tectonic plates shift in the global auto industry, jobs are being added under President Trump.  He was elected promising to reverse the deindustrialization of America, and the announcement today from Toyota and Mazda [i] that they are jointly building a $1.6-billion assembly plant at an American site to be determined shows that he is delivering.

Jonathan Soble writes from Tokyo for the New York Times:

Toyota said on Friday that it was taking a 5 percent stake in Mazda, another Japanese automaker, adding that the companies would jointly build a new assembly plant in the United States and pool resources on new technologies.

The factory's location has not been decided, but Toyota and Mazda said they hoped the first vehicles would roll off its production lines in 2021. The plant is expected to cost $1.6 billion and will employ about 4,000 workers, they said.


Toyota Motor Corp. president Akio Toyoda, left, and Mazda Motor Corp. president Masamichi Kogai, right, pose for media.  Eugene Hoshiko/AP.

President Trump gets the credit, even the Times concedes:

Akio Toyoda, chief executive of Toyota, said in January that the carmaker would invest $10 billion in the United States over the next five years. Although plans for that spending predated the election of President Trump, the announcement was widely seen as a response to Mr. Trump's vows to promote American manufacturing, pushing back against countries like Japan that have large trade surpluses with the United States.

President Trump does not even bother taking credit in his tweet this morning.

Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!

— Donald J. Trump (@realDonaldTrump) August 4, 2017

It is not an exaggeration to say the world's auto industry faces an uncertain future.  Soble's article lays out well the challenges forcing consolidation, particularly in the heavily fragmented Japanese auto industry.  Given that context, the two Japanese automakers are operating on the assumption that continued access to the American market must be assured by matching production with demand over time.

It must be stipulated that Japanese auto plants in the United States, so-called "transplants," date to Honda's 1982 establishment of its Marysville, Ohio assembly plant, which has been a roaring success and expanded multiple times, and which inspired many other transplants.

But the current instance does appear to be the result of President Trump's rhetoric.


[i] Disclaimer: I was a consultant to both Toyota and Ford (which at the time controlled Mazda) for multiple years each.  None of the views expressed here are based on confidential knowledge obtained in either company, and I have no continuing financial relationship with either.

As the tectonic plates shift in the global auto industry, jobs are being added under President Trump.  He was elected promising to reverse the deindustrialization of America, and the announcement today from Toyota and Mazda [i] that they are jointly building a $1.6-billion assembly plant at an American site to be determined shows that he is delivering.

Jonathan Soble writes from Tokyo for the New York Times:

Toyota said on Friday that it was taking a 5 percent stake in Mazda, another Japanese automaker, adding that the companies would jointly build a new assembly plant in the United States and pool resources on new technologies.

The factory's location has not been decided, but Toyota and Mazda said they hoped the first vehicles would roll off its production lines in 2021. The plant is expected to cost $1.6 billion and will employ about 4,000 workers, they said.


Toyota Motor Corp. president Akio Toyoda, left, and Mazda Motor Corp. president Masamichi Kogai, right, pose for media.  Eugene Hoshiko/AP.

President Trump gets the credit, even the Times concedes:

Akio Toyoda, chief executive of Toyota, said in January that the carmaker would invest $10 billion in the United States over the next five years. Although plans for that spending predated the election of President Trump, the announcement was widely seen as a response to Mr. Trump's vows to promote American manufacturing, pushing back against countries like Japan that have large trade surpluses with the United States.

President Trump does not even bother taking credit in his tweet this morning.

Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!

— Donald J. Trump (@realDonaldTrump) August 4, 2017

It is not an exaggeration to say the world's auto industry faces an uncertain future.  Soble's article lays out well the challenges forcing consolidation, particularly in the heavily fragmented Japanese auto industry.  Given that context, the two Japanese automakers are operating on the assumption that continued access to the American market must be assured by matching production with demand over time.

It must be stipulated that Japanese auto plants in the United States, so-called "transplants," date to Honda's 1982 establishment of its Marysville, Ohio assembly plant, which has been a roaring success and expanded multiple times, and which inspired many other transplants.

But the current instance does appear to be the result of President Trump's rhetoric.


[i] Disclaimer: I was a consultant to both Toyota and Ford (which at the time controlled Mazda) for multiple years each.  None of the views expressed here are based on confidential knowledge obtained in either company, and I have no continuing financial relationship with either.

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