San Antonio: Continuing the Toyota Momentum. San Antonio’s Long-Term Commitment to Japan and...
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San Antonio:
Continuing the Toyota Momentum
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San Antonio’s Long-Term Commitment to Japan and Toyota
• Community decision to target Japanese investment in mid-80s
• EDF hired Tokyo-based consultant in 1985
• Selected key companies with growing U.S. market– Sony, Toyota, others
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February 2003Toyota Selects San Antonio
Toyota’s Fujio Cho
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State-of-the-art Tundra Plant
• $800 million investment by 2006
• Employing 2,000
• Boosting city’s national and international status as manufacturing site
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October 2003Toyota Tundra Truck Plant Groundbreaking
• Groundbreaking brings new realm of economic development opportunity
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EDF Maintains Momentum
• Toyota needs on-site suppliers– Efficiency
– Quality control
• EDF needs on-site suppliers– Fully capitalize on economic development
opportunity
– Continue development of Southside SA
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Developing A Supplier List
• EDF identified 500 potential Toyota Tundra parts makers [30,000 Tundra parts]
• Helped Toyota identify local opportunities with qualified businesses and service providers
• Implemented strategic marketing campaign targeting potential suppliers, telling the San Antonio/Toyota story
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Intense CompetitionIntense Competition
• Suppliers could locate up to 1 ½ hours away
• Numerous surrounding communities wanted supplier jobs
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Strategic Marketing Initiatives
• National Advertising Campaign– 2003 – $96,000; 2004 – $102,000; 2005 – $86,000 – 2003 – 19 ads; 2004 – 21 ads; 2005 – 18 ads+
• Direct mail pieces – 2 pieces to more than 700 auto parts manufacturers
• Follow-up phone calls
• Visits to suppliers’ U.S. headquarters
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Workforce Issues
• Locating next to Toyota brought concerns – Wage pressures– Losing experienced employees to Toyota and other
suppliers
• EDF counters concerns– Providing data on the area’s large, available workforce– Emphasizing low cost of doing business– Creating sense of excitement and community for on-
site suppliers
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Complex Package of Incentives
• EDF negotiated incentives with state and local governmental taxing bodies– 100% tax abatement from City and
County on real and personal property– Franchise Tax credit– Sales Tax exemption– Financing programs
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Incentive Package
– Funding for workforce training assistance
– Federal Empowerment Zone wage credit
– State Enterprise Project Designation
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Utilities• EDF assisted with negotiation
of special utility agreements
• With energy utility City Public Service:– On-site suppliers to buy energy
via secondary meters
• With San Antonio Water System:– Secondary water metering to
eliminate local impact fees
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Toyotetsu, supplier of stamped parts
“The San Antonio Economic Development Foundation took on many complex tasks involving multiple partners in establishing the on-site supplier park where we decided to locate. The arrangement for secondary utility metering, allowing Toyotestu to benefit from Toyota’s high-use rate, made a big difference in our decision, and made clear the benefits of locating at the plant site.”
Herb KraseHerb Krase
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Joint Venture Partners: Another Layer
• Helping suppliers locate local joint-venture partners
• Toyota committed to the community to reflect San Antonio’s diversity
• EDF committed to Toyota to assist with identifying minority partners
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On-Site Supplier Park• December 16, 2004: EDF joins Toyota, government
officials to announce names of on-site suppliers.– Largest concentration at any other North American
automotive plant– 50% more local jobs and investment than originally
estimated
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Supplier Partners
• Range from industry giants– Johnson Controls, Inc., Lear, Tenneco, AGC
• Regional manufacturers, such as Reyes Automotive and Avanzar Interior Technologies
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On-site suppliersAGC Automotive Americas
ARK, Inc.Avanzar Interior TechnologiesCurtis-Maruyasi America, Inc.Futaba Industrial Texas Corp.
Green Metals, Inc.HERO Assemblers, LLPHERO Logistics, LLP
MetalsaMillennium Steel Service Texas, LLC
PPG Industries, Inc.Reyes-Amtex
Reyes Automotive GroupTakumi Stamping Texas, Inc.
Tenneco AutomotiveToyoda-Gosei Texas, LLC
Toyotetsu TexasVutex, Inc.
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Moving Forward
• Continue recruitment of Tier One
• Targeting Tier Two suppliers
• Focus ads at broader automotive market
• Capitalize on manufacturing expertise developing in the San Antonio area
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Toyota Motor ManufacturingNorth America, Inc.
"Our Texas facility, with its concentration of on-site suppliers, represents a new approach to automotive manufacturing. The San Antonio Economic Development Foundation's role in marketing the city to our suppliers was a major contributor to Toyota attaining our vision of 'Team Texas.' Toyota realized the benefits of San Antonio several years ago, thanks in large part to a lot of hard work from the Foundation. Now our suppliers feel the same way. The Foundation has simply been a great partner for us and our suppliers."
Jim Wiseman, Jim Wiseman, Vice President of Corporate Vice President of Corporate
Affairs Affairs