Toyota Is Moving Engine Assembly to Long Beach

Toyota Motor Corp. said Friday that it would begin assembling compact pickup truck engines in Long Beach, capping a $10-million expansion of its aging plant there.

The move helps ensure that the plant’s 600 employees, who currently assemble pickup beds for the Toyota Tacoma model, will retain their jobs. Toyota plans to move the pickup bed work to a plant being built on a 700-acre parcel in Tijuana.

Earlier this year, Toyota said it would spend $3 million to upgrade the TABC Inc. plant in North Long Beach to handle the assembly of cabs and chassis for commercial panel vans made by its Hino Truck unit. The company said Friday that an additional $7 million would be invested in expanding facilities at the 30-acre site and adding equipment to assemble 68,000 four-cylinder engines a year for the Tacoma.

The manufacturing of the engine block will be in Japan, with the blocks shipped to Long Beach for final work.

Analysts said that moving engine assembly to the 31-year-old Long Beach site could help cut overseas freight costs and protect Toyota against shortages in the event of future dockworker strikes on the West Coast. During last year’s strike, the company had to fly bulky engines from Japan to keep production going.

“We invest a lot in training, and it just makes sense to us to continue with the same individuals you’ve always employed,” said Dave Dedinsky, TABC’s vice president of manufacturing. Additional training will be provided to help workers shift from pickup bed to engine assembly, he said.

The company is moving the small-truck engine assembly from Japan as part of a policy to build where it sells.

After the engines are assembled in Long Beach, they will be shipped to final Tacoma assembly plants at the Toyota-General Motors Corp. plant in Northern California and to the new plant in Tijuana.

California once was home to nine auto assembly plants -- starting with a Ford Model T factory in Los Angeles in 1914. But mounting taxes, real estate prices and environmental pressures combined with new manufacturing techniques and a shrinking market share forced the domestic car companies to begin relocating in the 1980s.

The last of the big factories, General Motors Corp.’s Chevy Camaro plant in Van Nuys, closed in 1992.

The state’s remaining full-fledged auto assembly plant is the New United Motor Manufacturing Inc. plant in the Bay Area city of Fremont. Founded in 1984 by Toyota and GM, it produces Tacoma pickups, Corolla sedans and Voltz sport wagons for Toyota -- the Voltz is exported to Japan -- and Vibe sport wagons for GM’s Pontiac division.

Toyota is Japan’s largest automaker and globally it ranks third, just behind Ford Motor Co. Last year, Toyota built 6.3 million cars and trucks worldwide.

Toyota also is the largest import automaker in the U.S. with about 10% of the passenger vehicle market -- 1.75 million cars and trucks sold last year -- and officials said they expect sales to continue rising. Analysts say that more than 80% of Toyota’s operating profit comes from its operations in North America.

In addition to the Tijuana plant, Toyota has said that it would build an $800-million plant in San Antonio for its full-size Tundra pickup, and a $124-million parts plant in Tennessee. Last month, it also opened a $220-million V-8 engine plant in Alabama.

The San Antonio plant would be Toyota’s sixth vehicle manufacturing plant in North America, and top company executives have said they expect to build more as North American market share increases.

Toyota produced 1.21 million cars and trucks and about 1.35 million engines in North America last year. It estimates capacity will climb to 1.65 million vehicles by 2006.