Toyota expanding North American production

Yuri Kageyama

Monday, June 27, 2005 | 9:34 a.m.

TOKYO -- Toyota is building a new car factory in Canada, its seventh in North America, the Japanese automaker's new president said today, an announcement that marks a sharp contrast to the woes at U.S. rivals General Motors and Ford.

"We are in the final stages" of the plans, said Katsuaki Watanabe, whose appointment won shareholders' approval last week.

Speculation has been rising that Toyota Motor Corp., the world's second largest car maker, will build another plant in the key North American market, where its sales and profits are growing.

The Wall Street Journal reported tonday that Toyota will announce plans for plant in Woodstock, Ontario. Watanabe did not give details but said a formal announcement will be made soon.

Toyota already has three auto assembly plants in the United States -- in Kentucky, Indiana and California -- with another set to open in Texas in 2006, as well as a plant each in Mexico and Canada.

Toyota's strong performance in North America comes at a time when General Motors Corp. and Ford Motor Co. are in deep trouble. Both companies are eliminating thousands of jobs, and GM has said it will close plants, although it has not specified which ones.

Standard & Poor's Ratings Services has downgraded GM's and Ford's debt to below investment grade, or junk status.

Watanabe, 63, who appeared with his new management team at a Tokyo hotel, declined to comment on GM and Ford.

He sees Toyota's main job is to produce cars where they are sold to become a good "corporate citizens" in the United States to avoid the kind of trade friction that emerged in the late 1980s and early 1990s.

Maintaining the spirit of an underdog while keeping growth going remains Toyota's main challenge, Watanabe said. He sees his key mission as coordinating global management while strengthening partnerships with suppliers, he said.

"At Toyota, we have always put the customer first. And our management is based on valuing people," he said. "We are continually taking up new challenges and we never become complacent."

Toyota plants are sprouting up around the world, including a new factory that opened in the Czech Republic recently. Plants in Texas and China are set to start production next year, and in 2007, new factories in Thailand and Russia are scheduled to open.

Plans for model development and production in China and new types of ecological technology are pivotal for Toyota's future, Watanabe said. Toyota has an edge over rivals in developing hybrid engines that are fueled by both gasoline and electricity to deliver better mileage than regular cars.

Toyota is beefing up its production of such clean technology around the world, starting to make a hybrid Camry in the United States and the Prius hybrid in China.

Akio Toyoda, grandson of Toyota's founder, who was promoted to executive vice president from senior managing director, said he will start out by learning his job -- overseeing product development and purchasing in addition to his old assignment of heading Internet-related businesses.

"Mr. Watanabe has told me I should value my curiosity that comes with my young age," said Toyoda, who at 49 is the youngest board member ever at Toyota but is believed to be a candidate for future president.