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Why Toyota-Mazda's $1.6-Billion Project Skipped Over The Triad

Toyota Motor Corp. President Akio Toyoda, left, and Mazda Motor Corp. President Masamichi Kogai answer a question during a press conference in August 2017. The companies will spend $1.6 billion to set up a joint-venture auto manufacturing plant in Alabama, though North Carolina had been a finalist for the plant. (AP Photo/Eugene Hoshiko)

The experts seemed confident. The region was ready. There were even helicopters and vans spotted surveying the Greensboro-Randolph Megasite.

But in the end, Toyota-Mazda decided to take its business elsewhere.

The word leaked Tuesday evening that the joint manufacturing facility would not make its home in the Tar Heel State. The official announcement came Wednesday afternoon.

That leaves North Carolina among the only states in the Southeast to never lure in a modern car manufacturer. And it means the 4,000 jobs and estimated $1.6-billion investment Toyota-Mazda would have brought is Alabama's prize instead.

The decision leaves a question: the Triad megasite was supposedly a finalist for the game-changing deal. What happened?

North Carolian A&T State University economist Scott Simkins says Alabama has a head start in attracting projects like this. The state is home to several auto manufacturers and parts suppliers. And having an established network like that means a new producer can get up to speed more quickly and efficiently.

“It probably really is the issue that the supply chain logistics are already in place that ultimately made Alabama more attractive,” he says.

It's something of a chicken-and-egg problem. Toyota-Mazda wants a robust supply chain of related companies nearby to keep the plant humming. But supply chains like that aren't necessarily born without demand (from, say, an automobile manufacturer).

That's a tough nut to crack. And Simkins suggests it's a tough issue to wrestle with. But it's not all bad news.

“On the glass-half-full side is that there's been a lot of work put into this,” he says. “I think, potentially, from the national publicity from this…North Carolina has established itself as a player, and others may look to North Carolina based on that.”

Another factor in Toyota-Mazda's decision may have been economic incentives. Put simply, the state has not historically offered giant tax breaks to bring in multi-national companies. Several experts have said the state would have had to come up with an unprecedented incentive package to lure the companies to the Triad.

But not everyone thinks such packages are the right path. State Rep. Jeff Collins represents an area near the megasite. The Republican legislator says North Carolina's fiscal conservatism has encouraged more hiring by small- and medium-sized businesses, which generates a lot of jobs.

So, the region lost a big deal, and the Greensboro-Randolph Megasite remains prime real estate…for someone. What happens now?

Simkins suggests the site – and others like it in North Carolina – might be able to bring several companies together on these shovel-ready properties. Instead of landing one giant whale, perhaps several big fish would do.

“You know, you're swinging for a home run. And you hope you get a home run,” he says. “But when that doesn't happen, then maybe you have to settle for singles and doubles along the way in order to ultimately win the game.”

Sean Bueter joined WFDD in August 2015 as a reporter covering issues across the Piedmont Triad and beyond.Previously, Sean was a reporter, host and news director at WBOI in Fort Wayne, Ind., just a few hours from where he grew up. He also sorted Steve Inskeep's mail as an intern at NPR in Washington, D.C.Sean has experience on a variety of beats, including race, wealth and poverty, economic development, and more. His work has appeared on NPR's Morning Edition and All Things Considered, and APM's Marketplace.In his spare time, Sean plays tennis (reasonably well), golf (reasonably poorly), and scours local haunts for pinball machines to conquer.

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