GEORGETOWN, Ky. (April 19, 2013) – For the first time, a Lexus vehicle will be produced in the United States. The Lexus ES 350 will be assembled at Toyota Motor Manufacturing, Kentucky (TMMK) in 2015.
The move will generate 750 new jobs. To support the new dedicated assembly line, Toyota will invest $360 million in the Georgetown plant.
About 50,000 Lexus vehicles a year will be produced, bringing the plant’s total annual production capacity to more than 550,000 vehicles. It will be the first time the ES will be assembled outside of Japan.
“Lexus was founded in the United States, so it is only fitting that we are bringing the production of luxury sedans for our U.S. customers back to where the brand was born,” said Akio Toyoda, president of Toyota Motor Corp. “Today’s announcement is a major step in our Global Vision to make ever better cars and trucks, give regions greater autonomy to make the products their customers want and achieve sustainable growth globally.”
The announcement brings Toyota’s investment in Kentucky to more than $6.4 billion, said Wil James, president of TMMK. James said Friday was “a glorious day, and not just because it’s my birthday.”
The decision to move ES 350 production to Kentucky “is a true tribute to the hard work and commitment to excellence of every single Toyota team member at this plant,” James said.
“We deeply appreciate the tremendous support we have received from our community, from our local suppliers and business partners, and from Gov. Beshear and the commonwealth of Kentucky,” he said. “We look forward to strengthening further the productive partnership we have built together over the last 25 years.”
Since its arrival in Georgetown in 1986, Toyota has had an immeasurable impact on Kentucky, said Gov. Steve Beshear.
“The establishment of production for the Lexus ES 350 will afford Kentucky a tremendous opportunity to expand and strengthen its vast supplier base, creating even more growth potential in the future,” he said. “Kentucky is proud of the confidence Toyota continues to demonstrate in our vibrant and skilled workforce as they prepare to make a vehicle model that, like them, has earned a reputation for high quality.”
Steve St. Angelo, a managing Toyota officer who was instrumental in getting Lexus production to Georgetown, first got the idea when he was visiting Lexus of Lexington. He liked how that sounded, he said Friday at a press conference at TMMK that was linked to a press conference conducted in New York via satellite, prior to a major New York City event showcasing Lexus’s commitment to groundbreaking design.
St. Angelo is CEO of Toyota’s Latin American and Caribbean Region and chairman of Toyota de Brazil, but his Toyota roots are in Georgetown. He began his career with Toyota as executive vice president and later president of manufacturing at TMMK.
Now that Lexus has come to Central Kentucky, St. Angelo said, “(Lexington) Mayor Gray, you may want to change your name to Lexus-ton.”
Production of the ES 350 at the Georgetown plant is the latest step in Toyota’s continuing strategy to assemble vehicles in the markets where its customers live. Over the past 17 months, the company has announced plans to increase production capacity at its plants in Mississippi, Indiana, West Virginia and Canada, reflecting a cumulative investment of approximately $2 billion that has created more than 4,000 new jobs. Toyota also recently announced executive changes designed to provide regional managers with more local control and a streamlined decision-making structure to help the company deliver superior customer-focused products and services.
“Today’s Lexus ES announcement further strengthens Toyota’s commitment to serving American consumers, growing American production and investing in American team members,” said Jim Lentz, Toyota’s chief executive officer for North America. “We’re extraordinarily proud to have helped create over 365,000 jobs across the country and to produce so many of the industry’s highest quality vehicles right here in the United States. Today, Toyota’s 14 North American plants already produce seven out of every 10 vehicles that we sell in America, and North American-assembled vehicles are now exported to 23 countries around the world.”
Established in January 1986, TMMK is Toyota’s largest manufacturing facility outside of Japan, employing approximately 6,600 people. The plant currently assembles the Toyota Camry, Camry Hybrid, Avalon, Avalon Hybrid and Venza and manufactures 4-cylinder and V6 engines. It has earned 10 Initial Quality Plant Awards from J.D. Power and Associates, including four gold J.D. Power Awards.
In 2012, the plant produced the 25 millionth Toyota vehicle built in North America. Toyota recently committed to boosting production capacity for the 4-cylinder engine at the plant by more than 100,000 units. This $30 million project will create about 80 new jobs.
The ES is Lexus’s bestselling sedan, with approximately 58,850 vehicles sold in North America in 2012 — including 56,158 in the U.S. Projections for Toyota’s production volume at the company’s Kyushu plant in Japan have not changed. The company remains committed to building 3 million vehicles per year in Japan, including Lexus models, as previously announced.
The location of TMMK in Georgetown has helped drive Kentucky’s automotive industry into the thriving force it is today. Kentucky is currently home to approximately 450 automotive-related industries that employ nearly 80,000 people. Additionally, the ties between Kentucky and the Japanese business community continue to flourish, with Kentucky today boasting more than 150 Japanese-owned manufacturing, service and technology facilities that collectively employ 37,000 people.
New legislation key to Lexus announcement, governor says
Beshear’s administration developed key legislation that allowed Toyota to evaluate the benefit of moving Lexus ES production to the commonwealth, a new release from the governor’s office says.
The Kentucky Jobs Retention Act (KJRA) is an incentive program designed to spur job creation and significant investments in Kentucky’s automotive and parts manufacturing facilities. The program originally was designed to encourage the recent investment and job growth by Ford in Louisville, but Beshear recognized its potential for other auto makers and large parts manufacturing facilities. He signed House Bill 400 (HB 400), sponsored by Rep. Larry Clark, D-Louisville, and passed in the 2012 special legislative session, which expanded the KJRA to make it accessible to companies like Toyota.
Beshear then met with top Toyota officials during an economic development visit to Japan in November, when he discussed expansion plans for Toyota in Kentucky, including a possible addition of Lexus production.
“I’m proud of our economic development team’s constant efforts to keep Kentucky competitive,” Beshear said. “Expanding a key incentive program – one that had demonstrated success in our state already – helped us to land an enormous investment from Toyota, which will in turn create even more investment through suppliers and other support businesses. This means more dependable, good-paying jobs for our families.”
The Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $146.5 million through the Kentucky Jobs Retention Act.