For San Antonio, Toyota is proving to be the economic development gift that keeps on giving.
For Mayor Ron Nirenberg and the San Antonio Economic Development Foundation, which is quietly undergoing a year-long, comprehensive strategic planning initiative, the new decade is off to a better start than anyone previously imagined.
That momentum was driven by Toyota’s announcement Friday that production of the company’s Sequoia SUV will be moved from Indiana to San Antonio in 2022, following a redesign of the Southside manufacturing facility to exclusively produce large-frame vehicles. The Sequoia is built on the same platform as the Tundra pickup truck, which the factory already produces.
Production of the smaller Tacoma pickup truck, meanwhile, will come to an end in San Antonio as Toyota consolidates that work at two plants in Guanajuato and Baja California, Mexico.
With 3,200 existing factory jobs and another 4,000 at its 23 on-location suppliers in San Antonio, Toyota is poised now for further job growth and thus a new level of economic impact in San Antonio.
Some will ask how trading Tacoma production for Sequoia production equals expansion, a question I put to Kevin Voelkel, president of Toyota Motor Manufacturing Texas.
Coming changes in the supply chain will require the local supplier network to expand to meet the demands of the larger, more expensive Sequoia, and to continue supplying Tacoma production moving south, he said.
Toyota also seems to be undertaking measures designed to make the supply chain less vulnerable to disruption. Voelkel was circumspect, saying, “It’s too early to share details.”
The clear inference was that Toyota wants to avoid the unpredictability brought about in 2019 when President Trump threatened tariffs on Mexican exports if the administration of President Andrés Manuel López Obrador did not agree to block the continuing passage of Central American asylum seekers crossing over the U.S.-Mexico border.
The automaker’s anticipated changes are expected to bring more work to the local supplier network, and that will mean more jobs.
“It’s going to be a net-plus for our supplier network,” said Jenna Saucedo-Herrera, SAEDF’s president and CEO, when I put the same question to her.
The latest headlines come only four months after Toyota made news here with the announcement of a $391 million upgrade of its 16-year-old assembly plant and significant growth in the supplier chain. A major Toyota supplier, Aisin AW, said it would build a $400 million plant in nearby Cibolo, bringing 900 jobs, to manufacture automatic transmissions. Another automotive supplier, Continental Structural Plastics, announced plans to invest $65 million in a composites manufacturing plant in Seguin and add 200 jobs.
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That’s great news for Nirenberg, too, who was forced into a runoff election last June by first-term City Councilman Greg Brockhouse. The former District 6 representative told the Rivard Report‘s Iris Dimmick in December that he is planning another mayoral bid in 2021.
Job growth, a strong economy, and avoiding divisive social issues will be key to Nirenberg solidifying his hold on the mayor’s office and realizing his goal of serving a full eight years in office.
Saucedo, along with Nirenberg, Bexar County Judge Nelson Wolff, and an impressive group of business leaders are engaged in a lengthy review and debate over new approaches to economic development, one focused on growing local companies, incubating startups, and recruiting companies in search of more appealing cities and markets.
Toyota’s continued growth should serve to remind local leaders that one strategy for addressing San Antonio’s historic economic and racial/ethnic segregation is to incentivize manufacturers and other employers to locate on the city’s South Side, East Side, and West Side, while eliminating incentives for companies looking to extend the sprawl to the city’s north and northwest.
New jobs brought to the urban core and underserved areas lead to a more equitable tax base, improved public schools, more neighborhood investment, and more indirect business development.
I am driving my second Toyota Tacoma, proud to support San Antonio’s workforce. I don’t necessarily see a Sequoia or Tundra in my future, but Toyota’s commitment to offer electric versions of all vehicles manufactured in North America by 2025 has me anticipating my next upgrade.
One closing thought about Toyota: It’s the only one of the world’s top three vehicle manufacturers that isn’t beset by legal troubles and damaged reputations. San Antonio can be thankful it’s not home to Volkswagen or Renault-Nissan-Mitsubishi, both in the headlines for the wrong reasons.