Toyota to Build New RAV4 Plant in Woodstock, Ontario

New Production Facility to Open in 2008

After weeks of rumors and leaks, Toyota Canada held a press conference on June 30 at the site of its upcoming new factory in Woodstock, Ontario. Toyota officially announced that it will be investing $800 million CAD, the equivalent of $650+ million USD, to build a plant that will employ a workforce of 1,300 when operational, not to mention the thousands of construction jobs it will take to build the facility.

The plant is targeted as the sole worldwide production location of the RAV4 compact sport utility, projected to reach 100,000 units per year. Of course, with skyrocketing gas prices and ever-increasing demand for vehicles of a smaller variety in North America, the RAV4 is sure to gain even greater sales before the plant is even ready to take over production. At that time, Toyota will make the call to expand or keep some production in Japan.

Toyota is no stranger to Ontario, with the Toyota Motor Manufacturing, Canada, Inc. (TMMC) having been a long-term resident in nearby Cambridge. The TMMC plant produces such Toyota luminaries as the Corolla and Matrix, but the true feather in TMMCs cap is that it occupies the only location anywhere in the world to produce Lexus vehicles (the RX 330) outside of Japan. In order to streamline operations, TMMC will manage the Woodstock plant, which is scheduled to begin production in 2008.

The Woodstock facility is the first car manufacturing plant to be built from scratch in Canada in 20 years. Securing this operation was an accomplishment for Toyota Canada, as well as for the Ontario provincial and federal government, that competed furiously with several American states. Ontario agreed to commit $70 million CAD ($57 million USD) and the feds $55 million CAD ($45 million USD) towards employee training and health care–oh wait, the Canadian national health care system already takes care of health costs, another bonus that Toyota wont have to worry about during contract negotiations with the Canadian Auto Workers.

Other factors were Ontarios low corporate taxation and an advantageous location, on major road and rail routes and close to the existing complex in Cambridge. Canadian industry insiders also like to point out that Ontarios work force has a slight advantage in education, combined with the fact that Ontario is spending millions training workers specifically for high-tech automotive industry jobs and the nearby Cambridge facility can contribute their expertise and training to help get Woodstock on line.

Atsushi Niimi, formerly president of Toyota Motor Manufacturing North America (TMMNA) and now a senior managing director of Toyota Motor Corporation (TMC), noted the benefits of the Woodstock location.

“This location allows us to capitalize on our outstanding operation 40 kilometers away in Cambridge. Its proximity to suppliers on both sides of the border will benefit both countries and it will mean new opportunities for those suppliers. Jobs will be created across North America,” he said.

Further boosting the Canadian economy is the expansion of Canadian Autoparts Toyota, Inc. (CAPTIN) in Delta (a suburb of Vancouver), British Columbia. Toyota will drop $39.0 million CAD ($31.6 million USD) on the Delta expansion, and wheel capacity at the west coast facility will increase by nearly 17 percent per year, starting in July 2007.

Meanwhile, back in Woodstock in an empty field, Ray Tanguay and Ontario Premier Dalton MacGuinty were dancing a jig and singing Ontarios praises. Ray Tanguay, recently named a TMC managing officer, was particularly effusive on the occasion and he applauded the efforts and success of the existing Canadian work force and the job creation efforts of government officials.

“Todays announcement is truly a milestone,” he said. “It is recognition of almost 17 years of manufacturing success in Cambridge, Ontario and opens the page to a whole new chapter for Toyota in Canada. As a Toyota team member, I am obviously pleased. As a Canadian, I cant think of a better way to kick off a national holiday.”