Toyota to Bring Lexus Manufacturing to US

GEORGETOWN, Ky. (Lexington Herald-Leader/MCT) -

Toyota executives and state officials announced Friday that the automaker’s flagship North American plant in Georgetown will begin building the Lexus ES 350 luxury sedan in 2015. It will be the first Lexus model to be manufactured in the United States.

The project is expected to add 750 jobs, which will include temporary and contract workers. State documents suggest 570 of the 750 new jobs will be full-time employees.

“Lexus was founded in the United States, so it is only fitting that we are bringing the production of luxury sedans for our U.S. customers back to where the brand was born,” said Toyota President Akio Toyoda in a statement. “Today’s announcement is a major step in our global vision to make even better cars and trucks, give regions greater autonomy to make the products their customers want, and achieve sustainable growth globally.”

At Friday’s news conference, Kentucky Gov. Steve Beshear thanked Toyota officials for the commitment to further invest in the plant.

“We’re excited. We’re honored by Toyota’s decision,” he said, noting he was lieutenant governor when Toyota first announced in the 1980s it would build the Georgetown plant.

“We actually see Toyota as a Kentucky company,” Beshear said. “That announcement transformed our economy.

“This is a great day for Toyota and for the commonwealth of Kentucky.”

Top Toyota U.S. sales executive Bob Carter referred to the ES as the “foundation of the Lexus brand.”

“The ES was one of the first two (Lexus) vehicles we introduced here globally,” Carter said. “It is really the core. It’s the foundation. It’s the most important car that we have within the Lexus brand. That’s our baby.

“We’re really, really proud to have it manufactured here.”

The news was foreshadowed Wednesday when the Kentucky Economic Development Finance Authority gave preliminary approval to $146.5 million in tax incentives for the project.

The company plans to produce 50,000 of the vehicles annually beginning in Fall 2015. That production rate would be a small addition for the factory, which produced 462,080 vehicles, most of them Camrys, in 2012.

Toyota sold 56,158 Lexus ES sedans in the United States in 2012. That made it the second-most popular Lexus model behind the RX sport-utility vehicle, which sold 95,381. The RX is the only Lexus vehicle manufactured outside Japan; it is assembled in Japan and Canada.

Toyoda noted that the United States is the biggest market for the Lexus brand, and the company has sold nearly 1.2 million ES sedans since 1990.

The model “has one of the highest customer loyalty rates in the Lexus lineup,” he said.

Pricing for the ES starts at $36,370. It has both regular and hybrid versions.

The Lexus ES 350 sedan will be manufactured on a new dedicated assembly line to be built at the sprawling Georgetown plant, which has two lines for its current product lineup.

The vehicle’s production will add to already-impressive numbers at the Georgetown plant. With the latest generation of the Camry selling well, the plant is on track for 2013 potentially to be one of its largest years ever.

The new project is expected to cost $531.2 million, with $326 million of that focused on equipment. The remainder would be for building expansions and improvements, as well as tooling. No new land is being acquired as part of the project, according to state documents.

The new employees would bring Toyota’s full-time employment in Georgetown to 6,739, according to state records. Their average hourly compensation will be $26. That’s significantly below the average compensation of $44.12 paid to existing employees, many of whom have been with the plant since its opening in the 1980s.

“We are united and committed to furthering the needs of our customers and strengthening local communities here and around the world,” Toyoda said.