Following recent expansions at Ford in Louisville and the General Motors Bowling Green Assembly Plant, an announcement of Toyota’s expansion further augments the automotive industry’s place in providing Kentuckians with jobs.
Toyota’s $360 million expansion to build the Lexus ES 350 will mean 750 jobs for the Georgetown plant but will have ripple effects in the automotive supply industry that could touch southcentral Kentucky. Toyota will spend an additional $171 million to refurbish other parts of the plant.
“Anything like that is good news,” said Jeff Johnson, president of New Mather Metals in Franklin. “It’s a huge investment ... and bringing Lexus production to the U.S. (specifically Kentucky) is a big vote of confidence to the suppliers based here.”
New Mather is one of southcentral Kentucky’s 56 auto-related industries. Auto-related companies in the region in 2009 employed more than 10,000 people, according to a publication by the Bowling Green Area Chamber of Commerce.
New Mather’s suspension stabilizer bars are in every Toyota made in the United States and at a plant in Mexico. Because this would be the first Lexus produced in the United States, the company is not yet supplying stabilizer bars for that vehicle. But Johnson said the chassis for the new Lexus is very similar to the Avalon and Camry models, for which New Mathers already supplies the stabilizer bars.
“This is a nice opportunity, which we hope is coming our way,” Johnson said.
He expects that over the next few months, Toyota will be doling out specifications to suppliers for parts the company needs. There are two types of suspension bars. If it’s one that New Mather is already producing, the production could be absorbed with existing space and employees.
“I assume we could handle most of that volume with existing capacity,” he said.
New Mather, which has nearly 300 employees, has been in Franklin since 2002 and is a sister to Bowling Green’s NASCO plant that supplies coil springs for Toyota and other automotive companies, Johnson said.
Ron Wyans, president of Toyo in Franklin, said some small suppliers could see a larger impact from the expanded Toyota production than his facility might.
“I’m sure it will create spinoff jobs somewhere,” Wyans said.
But Wyans said no suppliers can know just yet exactly how they will benefit from the expansion.
Wyans said they already are supplying anti-vibration systems for Avalons and Camrys.
“If they carry those parts over to the Lexus, it will impact us a little bit,” he said. “It might create a few more jobs here, but we have extra capacity at the plant and should be able to absorb any additional orders.”
Toyo has about 200 people working for it now.
Franklin Precision Industry is already shipping parts out of the country for use on the Lexus ES, so shipping them relatively nearby would save the company in shipping costs, general manager of administration Eric Eskridge said.
FPI currently makes the cutoff valve and air filter for the air filtration system of Lexus. For the 2015 model, it also could be making the evaporative canister, throttle body fuel delivery pipe and inlet air control valve. Eskridge said they already have the dies necessary to make those parts.
“It would be added business, but a very small percentage increase for us,” Eskridge said, based on the 50,000 vehicles projected to be built. “We produce a lot of parts, so we could probably absorb the production with existing employees.”
Kobe Aluminum in Bowling Green, which makes aluminum forging for the automotive industry, also supplies parts for Toyota and is in the midst of planning its own expansion. The company will spend $66 million to add and equip 155,000 square feet of space. Company officials could not be reached for this story, so it’s not clear if the two expansions might be related.
Gov. Steve Beshear said the Toyota announcement was a vote of confidence for the state.
It will “also afford Kentucky a tremendous opportunity to expand and strengthen its vast supplier base, creating even more growth potential in the future,” Beshear said in a news release.