Toyota execs launch $126 million randd expansion in Michigan

Toyota Motor Corp. broker ground today on the $ 126 million expansion of its Technical Center near Ann Arbor, Mich.

The expansion includes a new prototype facility for vehicle development, additions to the powertrain development facility and a supply center. The construction is expected to wrap up in late 2016.

The renovations at the Ann Arbor Toyota Technical Center, announced in December 2014, are part of the automaker’s push to consolidate its North American r&d and establish a new North American headquarters in Plano, Texas. Manufacturing, sales and marketing and corporate functions will be housed in Texas, while Michigan will become the hub for product development.

The automaker is relocating about 300 engineering employees from Kentucky and California as part of the Technical Center expansion.

Toyota’s North American CEO Jim Lentz, North American Vice President Simon Nagata and Technical Center President Seiya Nakao attended today’s groundbreaking.

“The expansion of this campus is a key element of Toyota’s ongoing unification of our North American operations, which includes a new headquarters in Plano, Texas,” Lentz said in remarks prepared for today’s event.

“Investments here in Michigan will intensify Toyota’s engineering, product development and procurement capabilities. The impact of this will be felt by our customers through improved quality, adoption of new technologies and greater value of the vehicles we produce.”

Toyota also donated three Tundra pickup trucks to local fire departments. 

Lentz Q&A

Lentz conducted a roundtable discussion with reporters before the event and discussed a wide range of topics:  

• Lentz said he hasn’t heard from Fiat Chrysler Automobiles CEO Sergio Marchionne, and doesn’t think Toyota would benefit from a merger with Fiat Chrysler Automobiles.

“It’s something that we would not be interested in. At 10 million (annual unit sales globally) we have enough scale right now to do what we need to do. So there really would be no advantage for us to do that.”

• Toyota isn’t interested in winning the luxury market race.

“The luxury market is quite hot, but a lot of it is being driven by what I would consider to be near-luxury or entry-luxury,” he said. “If you look at some of the Germans that are selling sub-$ 30,000 cars, we’re not going to play in that game…

“I don’t feel that that is really luxury volume, and I don’t think we can provide a luxury experience in those price points.”

• Toyota is making speed a top priority as it works with other automakers to look for the root cause of Takata airbag defects.

“After living through what we lived through (in the unintended acceleration recall) I was concerned about the speed at which we were getting answers,” he said.

“I wanted to make sure that we were getting answers and — frankly, since this is an industrywide issue — that the industry was getting answers as quickly as possible.”

• Toyota’s North American consolidation is on track.

“It’s going well. We’ve broken ground in Plano so we are moving dirt, hopefully we’ll start putting up concrete and steel in the next 60 to 90 days,” he said. “The new campus should be complete by late 2016, likely early 2017, so 2017 will really be the transition year.”

You can reach Nora Naughton at nnaughton@crain.com.


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