Toyota and Mazda are seeking a $1 billion incentive package from states vying for the joint car factory the companies want to build in the U.S. in 2021, sources recently told Bloomberg.
With the bid for Amazon’s second headquarters in San Antonio’s rearview mirror, the City has submitted an incentive application for the estimated $1.6 billion joint factory for the Japanese car companies.
However, Bexar County Judge Nelson Wolff doesn’t think Texas can offer the $1 billion they’re seeking.
“We wouldn’t be in that game,” Wolff told the Rivard Report Wednesday. “I don’t think even the state would play that expensive of a game either.”
Due to a nondisclosure agreement with the car companies as part of the application, Mayor Ron Nirenberg said he could not comment further on the City’s proposal.
Representatives from the City’s San Antonio Economic Development Department and San Antonio Economic Development Foundation could not be reached for comment by deadline.
Competition for the 4,000 jobs and investments the plant would bring to a city is fierce – communities from 11 states are submitting applications – and most parties are keeping their plans confidential.
When approached by reporters after a Free Trade Alliance San Antonio luncheon on Wednesday, Toyota executives declined to comment on the new plant or respond to questions about the North American Free Trade Agreement – the latter of which was the subject of the afternoon lecture featuring Leila Afas, Toyota North America’s director of international public policy.
Afas spoke to a group of local and international trade stakeholders during the Alliance’s all-day conference as an individual – not as a representative of Toyota, she said. She did not mention the plant during her remarks, nor was she expected to since the discussion focused on NAFTA.
A Toyota spokesperson repeated a statement given to media previously: “At this point our site selection process is underway and we continue to meet with key state and economic development leaders and we anticipate selecting a site in early 2018. We remain focused on finding the best possible site that meets our join criteria for the future plant and do not wish to fuel any speculation. Until then, we are not in a position to discuss who is or who isn’t in the running for the site.”
They offered no comment as to the size of the incentive package the companies were looking for. Mazda emailed a similar statement.
Mario Lozoya, Toyota Motor Manufacturing Texas Director of Government Relations and External Affairs, is “far removed from that decision” about a new plant, he said. “I can talk about building trucks in San Antonio. That’s all we do.”
Toyota’s existing Tacoma and Tundra manufacturing plant in San Antonio, completed in 2006, received a $133 million incentive package from the City and County. The Southside facility employs nearly 7,000 workers, which includes 23 on-site suppliers.
“We give incentives, but we’re very respectful of the taxpayers’ money and expect a payback on it,” Wolff said. “It’s gone crazy the way that cities are competing against each other.”
Wolff and Nirenberg bowed out of the so-called bidding war for the Amazon headquarters last week, opting to re-focus efforts on transportation, including mass transit and air travel to improve the area’s long-term economic development portfolio.
Amazon was asking for much more than Toyota and Mazda, Wolff said. “Multiply that [$1 billion] by three or four or five.”
Other cities, including Tampa Bay, Florida, also have declined to pursue the internet retail giant’s headquarters.
“Bottom line, they’re going to go where the best workforce is, and we have a lot of work to do there yet,” Wolff said.
Toyota has developed training and educational agreements with Alamo Colleges, Texas A&M-San Antonio, CAST High School, and others. There is, however, a gap between available advanced manufacturing jobs and workers with the right skills to fill them, according to a 2015 report by the nonprofit Manufacturing Institute based in Washington, D.C.
“Over the next decade nearly 3.5 million manufacturing jobs likely need to be filled,” the report states. “The skills gap is expected to result in 2 million of those jobs going unfilled.”
