Toyota’s San Antonio Expansion Draws Closer to Reality

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A woman walks out of the Toyota Motor Manufacturing Texas Visitor Center.

Bonnie Arbittier / Rivard Report

A worker passes by the Toyota Motor Manufacturing Texas Visitor Center.

It would be premature to pop Champagne corks, but all signs indicate the long-anticipated expansion of Toyota’s vehicle manufacturing presence in San Antonio is going to happen.

San Antonio needs a big win, something that unites the people of this city after a contentious mayoral race, a continuing standoff between City Hall and the firefighters union, and a sequence of distracting and divisive issues pitting various political and social factions against one another.

Two big things seems to unite San Antonians across all socio-economic lines: A Spurs championship run and major economic development news. A sixth NBA championship is not on the horizon, but thousands of new jobs appear to be.

It’s happened before with Toyota, starting in 2006 when the world’s second largest automaker opened its Tundra pickup manufacturing plant here, creating thousands of jobs at the Southside facility and its satellite suppliers. Production of the smaller Tacoma pickup truck, which now outsells the Tundra, followed in 2010.

Now the Japanese auto giant is on the cusp of a plant expansion that would total nearly $400 million in total investment and create thousands of new jobs here and at an expanded network of suppliers in and around Bexar County.

“Nothing is ever certain in economic development, but we remain positive about our opportunities with Toyota and expect to know more before the end of the quarter,” Jenna Saucedo-Herrera, CEO of the San Antonio Economic Development Foundation, said Friday.  “We’re preparing for the long game in our region, which means further building the ecosystem of suppliers, distributors, and workforce.”

Some officials believe the announcement could come even sooner.

The latest evidence that the expansion is on track came late Friday when City of Cibolo and Guadalupe County officials posted an agenda in advance of a special joint session Tuesday. They are expected to approve an incentive package for a major Toyota supplier, AW Texas, Inc., a U.S. subsidiary of Aisin AW Co., a Japanese manufacturer of drivetrains, transmissions, and vehicle information technology.

AW Texas, Inc. could create up to 1,000 tech-driven jobs at a new manufacturing site in Cibolo, according to one source, with the caveat that the company’s commitment to the Cibolo site is predicated on Toyota selecting San Antonio as the site of its planned North American expansion.

The City of San Antonio approved an incentive package at the end of May, and Bexar County followed with its approved package earlier this month.

What could interfere with the the Toyota decision to invest more deeply in San Antonio? Companies do not like uncertainty, but that is exactly what Toyota and others have experienced in recent years as the Trump administration forced a renegotiation of the North American Free Trade Agreement, and more recently began to impose tariffs on trading nations that export more to the United States than they import.

Toyota Texas depends on the free flow of truck chassis and other truck components across the Texas-Mexico border. Anything that slows that flow, or adds cost, makes the San Antonio plant less efficient and profitable.

President Trump’s willingness to use tariffs as a political weapon took on even greater import this summer when he threatened to impose new tariffs on Mexico unless the surge of Central American migrants passing through the country on their way to the U.S.-Mexico border was curbed.

That has led, at least in the short term, to deployment of Mexican national guard troops along its southern border with Guatemala. Soon afterwards, U.S. Customs and Border Protection officials reported a significant decrease in crossings. The flow of asylum seekers, however, remains high and continues to tax federal and local resources in Texas. As the 2020 presidential campaign heats up, no one can predict whether the immigration crisis will trigger a more serious political response affecting cross-border trade.

Still, there is optimism locally.

“We have been laser focused on addressing the fundamentals and laying the groundwork to position San Antonio as a resilient 21st century city prepared to cope with changing dynamics,” Mayor Ron Nirenberg said, reached this weekend at the Sister Cities International convention in Houston, where San Antonio’s Brooks City Base was honored at a Friday dinner that featured former President George W. Bush.

Nirenberg is the SCI chairman.

“The tech and cyber security communities  have been a key element in diversifying our workforce, and we are on the cusp of a transformational jump forward with Alamo Promise,” Nirenberg said. “San Antonio has more momentum now than at any other time in history…a major expansion in this ever-advancing sector would be a powerful boost.”

All eyes will be on Cibolo Tuesday.

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