By Edmond Ortiz
City Council was quick and enthusiastic June 19 in formally approving a set of economic development incentives designed to support Toyota Motor Corp.’s plan to expand its South Side automobile production footprint on the South Side. The move helps to bolster San Antonio’s booming manufacturing industry.
What is happening
Toyota will build a $2 billion assembly line next to its existing South Side facility, which since its inception in 2003 has represented a $4.7 billion local investment by the automaker. Better known as Toyota Motor Manufacturing Texas, the existing 2.2-million-square-foot facility currently assembles vehicles such as the Tundra pickup truck and the Sequoia sport utility vehicle.
That structure is already undergoing a $531 million initiative, which will feature a 500,000-square-foot facility devoted to rear-axle assembly and drivetrain components.
The newest plan calls for construction to start later this year on a 2.5-million-square-foot auto assembly structure, which will employ 2,000 full-time employees.
The incentives package adopted by council includes:
- A 10-year, 100% tax abatement valued at $88 million;
- A city contribution of $20 million, alongside funding from Bexar County and the state, to support the design and construction of road infrastructure improvements to support a northeast bound facility entrance in in alignment with the proposed South Texas Parkway;
- Funding up to $4.5 million for the construction of a westside entrance and road infrastructure improvements;
- An $8.2 million On-the-Job Training (OJT) grant to train up to 1,650 new-hires from the San Antonio Ready to Work Program;
- A $750,000 Incumbent Worker Training (IWT) grant to upskill up to 150 existing employees; and A maximum of $500,000 in city fee waivers
Additionally, with council’s endorsement, Toyota may capitalize on the following incentive opportunities:
CPS Energy E-16 Economic Incentive Rider (E-16 Rider), valued $16.2 million;
A Triple Jumbo Texas Enterprise Zone (TEZ) nomination to the state of Texas program, with an estimated value of $3.7 million; and
Approximately $4.5 million in San Antonio Water System fee waivers
According to Toyota and city officials, once the new assembly line becomes operational in mid-2030, the automaker’s South Side complex will collectively have a total economic impact of $208 billion through 2035, support 15,100-plus direct and supplier jobs annually, and pay $1.4 billion in yearly wages.
What they’re saying
Frank Voss, Toyota Texas president, said in addition to being one of the biggest private employers in San Antonio, the automaker’s local presence has been a catalyst for South Side growth. Additionally, the company makes philanthropic contributions to various local causes, and employees frequently volunteer with community organizations, events and initiatives.
“We’re excited for the potential impact that 2,000 more high-quality, stable jobs with Toyota paychecks will make in the lives of this community, citizens and our local economy for years to come,” Voss said.
Council members such as District 4’s Edward Mungia wholeheartedly backed the incentives package and Toyota’s plans.
“This is going to be so beneficial, not just for my district of the South Side of San Antonio, but regionally speaking. This is a huge investment for our community,” Mungia said. “We’ve had a great, long-standing relationship with Toyota ever since you guys came here, and I think it’s paid dividends, which are immeasurable.”
A bigger picture
Toyota Texas’ success also means momentum for San Antonio’s manufacturing sector, according to local business leaders such as Jonathan Gurwitz, chair of the Greater San Antonio Chamber of Commerce Public Policy Committee.
Greater: SATX Regional Economic Partnership data shows that San Antonio’s advanced manufacturing industry employees more than 61,000 residents through 1,600 companies, which span industries such as automotive, aerospace, semiconductors, old and new energy, machinery, and food and beverage makers.
The same data also shows that San Antonio’s manufacturing sector yields a regional gross domestic product of $13.5 billion with a yearly growth rate of 27% since 2020.
The local manufacturing industry has gotten significant boosts in recent years, such as International Motors (formerly Navistar) opening a 1-million-square-foot commercial truck assembly facility on the South Side in 2022, and JCB planning to open a 720,000-square-foot construction machine-assembly plant on the South Side this fall.
“(Toyota) has been a true community partner, investing not only in manufacturing operations, but also in the people, organizations, and the institutions that help our region thrive,” Gurwitz said.
“Toyota’s presence has helped establish San Antonio as a globally competitive manufacturing hub, supporting thousands of direct and indirect jobs, and bringing suppliers’ investment and talent to our region.”
