Toyota Motor Corp. won preliminary approval Thursday for $25 million in tax incentives as the auto giant considers a $413 million investment to build a possible new vehicle model at its central Kentucky plant.
The investment would be applied to install new equipment at the Georgetown plant - Toyota's largest in North America, said Rick Hesterberg, a spokesman for Toyota Motor Manufacturing Kentucky.
The project wouldn't expand the plant - where the popular Camry model is made - and the company doesn't expect to add jobs, he said.
Hesterberg declined comment on the possible new model.
The proposed project got a boost when the Kentucky Economic Development Finance Authority, meeting in Frankfort, gave preliminary approval to award Toyota the tax incentives. Final approval of the incentives hinges on Toyota's decision to make the investment at its plant.
"It will help us move forward as we continue to consider this project," Hesterberg said in a telephone interview.
Hesterberg said a decision on the investment will likely be made
in the next year.
Toyota requested the incentives under the Kentucky Reinvestment Act, which applies to companies employing at least 1,000 workers that plan to invest a minimum of $100 million at an existing plant.
Acting Economic Development Secretary Gene Fuqua said the state has been working with Toyota on the proposed project for a few months. Kentucky officials don't know which other states have
offered incentives to try to attract the investment, he said.
"We don't know for sure what Toyota is going to do," Fuqua said. "They haven't made a decision. This is a tool we're using to try to get them to do more in Kentucky."
Gov. Ernie Fletcher also said the investment would be a big boost for the state.
"Kentucky has had a great relationship with Toyota for a number of years, and we look forward to that relationship continuing to prosper," he said.
Toyota employs about 7,000 workers at the Georgetown plant, which also makes the Avalon and Solara models. The plant began producing Camry hybrids last year.
The plant produced more than 500,000 vehicles last year.
Even though the project wouldn't add jobs, it would further solidify the Georgetown plant's long-term stability, Hesterberg said.
Last year, Toyota received $18 million in tax incentives under the Kentucky Reinvestment Act for a $248 million investment at the Georgetown plant.
While the Toyota plant has flourished, Kentucky officials have worried about the future of two Ford Motor Co. production plants in the state. State lawmakers recently approved a tax incentive package aimed at preserving Ford's two plants in Jefferson County.
The two plants employ nearly 9,000 workers. The Louisville Assembly Plant produces the Explorer and Explorer Sport Trac. The Kentucky Truck Plant produces the F-Series Super Duty trucks.
(Copyright 2007 by The Associated Press. All Rights Reserved.)
Enter your number for a chance to win great prizes!
Message and data rates may apply