Toyotas $13 Billion US Charm Offensive

While other automakers are closing US plants, Toyota is ramping up US production.

Akio Toyoda, CEO of Toyota, was in Washington, DC, last month as the Japanese automaker revealed plans to pump billions into US manufacturing. Toyota began selling cars in the US in 1958, opened its first US production facility in 1971 (in Long Beach, California), and has been making cars in the country ever since. The 62-year-old seemed keen to burnish his company’s US profile at a time when foreign car makers face new tariffs and President Donald Trump has accused them of being a national security threat.

Speaking at the Economic Club of Washington, Toyoda, grandson of Toyota founder Kiichiro Toyoda, said he was “sad” that Trump viewed foreign carmakers that way, adding, “I hope this kind of conversation can go away.” In an onstage interview, Toyoda told Carlyle Group co-founder David Rubenstein, “I love America,” adding, “I promise, regardless of the direction we go, we will never leave the United States.”

The same day, Toyota revealed plans to invest nearly $13 billion in the US over the years to 2022, boosting a $10 billion five-year pledge it made in 2017. As part of the plan, the automaker is pouring $749 million into facilities across five states, which it says will create 568 new jobs.

Producing more components and hybrid vehicles in the US can avoid the tariffs of up to 25% specified in the US-Mexico-Canada Agreement, the successor, concluded last year, to the North American Free Trade Agreement (NAFTA). The new rules require that, to avoid tariffs, any automobile sold in North America must have 75% of its components manufactured in the region.

Toyota’s new investment will help it to get there. “These latest investments represent even more examples of our long-term commitment to build where we sell,” Toyota Motor North America CEO Jim Lentz said in a March 14 company statement. “By boosting our US manufacturing footprint, we can better serve our customers and dealers and position our manufacturing plants for future success with more domestic capacity.”

In so doing, Toyota also seems to have won itself a reprieve from Trump’s wrath. Soon after the new investment was announced, the president tweeted, “Congratulations @Toyota! BIG NEWS for US Auto Workers! The USMCA is already fixing the broken NAFTA deal.”