Monday, April 28, 2014

Toyota Parts Supplier Expanding Into Indiana

Although signs of weakness continue in the Canadian automotive manufacturing sector, some auto parts manufacturers are finding more success south of the border. Windsor Machine Group, a manufacturer of Toyota auto parts has announced plans to produce parts at a new Indiana plant. The company, emerging from a recent reorganization, has recently laid off hundreds of workers in Canada and closed three of their five plants.

The first round of hiring at the new plant is due to begin soon with forty people. Understandably, Windsor Machine does not want to have workers much before production starts. There is no word on what these jobs might pay, but with the American economy in shambles, there is sure to be no shortage of applicants. Eventually, the operation should employ 130.

While Windsor is hoping for additional customers, the primary goal is to supply Toyota is apparent due to the proximity of the new facility to the Toyota plant in Princeton, Indiana. Toyota sales in the United States have suffered lately, causing a slackening demand for auto parts. Some consider the development of Windsor Machine Group's facility as indicative of a pending surge in Toyota's production. This would be a sign of a strengthening automotive sector.

Although this plant is touted by local officials as a sign of economic strength, it's more likely coming to Indiana because of significant subsidies that are appealing to a struggling manufacturer. So, while the arrangement will clearly benefit Toyota, Windsor Machine, and the local economy, the company's ability to operate in Indiana without taxpayer support is unclear. The production of more auto parts closer to their manufacturing plant should have a synergistic impact on Toyota, however. Timing of inventory deliveries should improve and shipping costs of the parts should be reduced.

Generally speaking, any increase in the supply of auto parts is good news for consumers. First, it suggests optimism about future economic conditions, but also, this helps ensure that replacement auto parts will be more readily available for the repairs being made to cars that are already on the road.

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