Toyota has announced a $3.6 billion investment in Texas as it plans to shift production from Mexico.
The Japanese automaker announced that it was moving production of the midsize Tacoma from Mexico to San Antonio, Texas. The move will result in the company making a $3.6 billion investment in Texas.
The move comes as the fate of the free trade agreement with Mexico and Canada remains in limbo. The Associated Press reported that negotiations to renew the free trade pact could take months as Washington has announced that the trade pact will be reviewed on an annual basis.
The outlet added that the administration was making demands that could result in automaking production shifting to the U.S. However, the uncertainty could also disrupt supply chains and drive up the cost of goods.
In making its announcement, Toyota did not mention the USMCA or the ongoing negotiations.
"Toyota's continued investment in North America is a testament to our confidence in the region's workforce, innovation and long-term growth potential," said President and CEO Ted Ogawa. "By expanding our San Antonio plant, we are deepening our commitment to American manufacturing, creating meaningful and sustainable jobs, while advancing our mission to deliver high-quality vehicles that meet the changing needs of customers today and into the future."
The automaker said that the $3.6 billion expansion will create 2,000 new jobs and add 2.5 million square feet to Toyota Texas, doubling its size by 2030.
"This Texas-sized investment reflects the strength of our workforce and the unmatched business advantages found only in our state," said Texas Governor Greg Abbott.
The expansion will boost Toyota's annual production capacity in San Antonio to 150,000 units. CBS News reported that Toyota also will continue to build some Tacoma trucks at its Guanajuato, Mexico, plant.
Toyota also produces Tundra pickups and Sequoia SUVs in San Antonio. CBS News reported that the company also plans to open a rear axle assembly facility on its Texas campus later this year.
