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Toyota brings Highlander SUV production to Indiana

The announcement earlier this month that Japanese auto manufacturer Toyota will expand its manufacturing plant in Princeton, Ind., by creating 400 jobs has experts optimistic about the state’s economy.

“I think I can express the delight of all Hoosiers upon hearing Toyota’s announcement,” Timothy Slaper, director of economic analysis at the Indiana Business Research Center at the Kelley School of Business, said in an email. “Will it impact someone in South Bend? Probably not, unless they are or will become part of the supply chain. It may promote businesses in southern Indiana that may become a part of the hybrid supply chain. Will it matter to home prices in southern Indiana? It sure won’t hurt.”

The expansion at Toyota Motor Manufacturing Indiana will help Toyota increase Highlander SUV production in the Hoosier state. The company said although the hiring will not happen until next year, it plans to stop making Highlanders in Japan.

“The last few years have been difficult for the major auto companies but even worse for Toyota,” School of Public and Environmental Affairs Dean John Graham said in a press release. “Both adverse currency fluctuations and the disastrous tsunami have undermined the profitability of Toyota’s Japanese production facilities.”

The Princeton plant currently employs 4,000 Hoosiers who make Toyota Siennas, Highlanders and Sequoias. Across Indiana, the company has invested $3.2 billion in the state through 14,812 jobs.

“This project is part of our localization strategy to build vehicles where we sell them,” Norm Bafunno, president of the Princeton plant, said in a press release. “This announcement is a vote of confidence from Toyota Motor Corporation in the abilities of our team members and this plant.”

The Toyota expansion is the first big announcement of job creation in Indiana since the state legislature passed controversial right-to-work legislation that Republicans said would attract companies to the state.

Slaper said although Toyota’s move isn’t directly related to right to work, the news is not a bad prediction for Indiana’s future economy.

“While Toyota’s direct investment is not related to Indiana recently becoming a right-to-work state, and while the full employment effects of right-to-work status will not be felt for a few years, in the increasingly competitive global economic environment, right to work certainly will not hurt Indiana’s future ability to secure the parachute jobs upon which its economy depends,” Slaper said.

— Charles Scudder

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