Toyota and economic development

After the previous rant, I thought I would provide you with some interesting insight.

A new study by the Center For Automotive Research in Ann Arbor, Michigan, says the steady expansion of the Toyota Motor Corp. base in the U.S. has made a substantial contribution to the US economy. The study, which was financed by Toyota, estimates that the automaker’s $13.4 billion investment in the U.S. yielded $14.4 billion in wages in 2003. Toyota employed 29,135 workers in its U.S. product development, manufacturing, and sales and marketing operations. Indirect jobs estimates are also significant.

For example, in Ohio alone, Toyota supports an estimated 11,000 jobs in supplier plants.

Interestingly, none of Toyota’s manufacturing plants are in ‘traditional’ auto manufacturing markets. They are located in Buffalo, West Virginia; Georgetown, Kentucky; Huntsville, Alabama; Princeton, Indiana; and Fremont, California.

Now, this last point in particularly interesting to me. Because if you look closely. West Virginia, Kentucky, Alabama, et. al. look a lot like New Brunswick. They are the poorest states in the union. They have the least educated workforce. The least amount of R&D, etc.

Yet, the second largest automobile manufacturer in the world chose these places to invest.

This is particularly interesting to me as I have explained previously in the blog. A few years ago I wrote Alan Rock, then Minister of Industry Canada, and innocently asked him why the Canadian government isn’t working with companies like Toyota to locate in Canada’s version of Alabama. He politely wrote back and said that auto companies need to be located in a ‘cluster’. For supply chain management. For integrated logistics. New Brunswick wasn’t a viable option.

But Kentucky is? West Virginia? Excuse me but I had a college roommate from West Virginia and he had a gun rack in his truck with loaded rifles. You think the Japanese have more synergy with WV than NB?

So I wrote Buzz Hargrove at the Canadian Autoworkers Union. Buzz being a native NBer – maybe he would be interested. But no. His economist emailed me and that auto companies need to be located in a ‘cluster’. For supply chain management. For integrated logistics. New Brunswick wasn’t a viable option. But don’t worry, we’ll keep fighting for more EI for New Brunswick (just kidding on that last one).

Are you getting the picture here? Every major large scale industrial investment with significant government investment in the past ten years has been sited in Ontario or Quebec. Pratt Whitney. Bombardier. Toyota. Bell Helicopters. Ubisoft. On and on and on. All with 10 or 20 times the government dough on the table than any project in Atlantic Canada since Michelin 25 years ago.

When we need foreign investment the most. That’s when we are the most disinterested.

Interesting dilemna.

I’ll say this from the bottom of my heart and with all the gumption in my soul. If Frank McKenna had courted Toyota back in the early 1990s and if he and his government had had the guts to compete on the incentive package, Toyota would have been in New Brunswick right now – no bones about it. And those thousands of high paying jobs.