Toyota planning to shift more production of its four-cylinder engines to Alabama

Article by Christian Andrei, on August 26, 2010

In order to make use of excess engine-making capacity at its US factory, Toyota Motor Corp. will shift some of its production of four-cylinder engines from Japan to Alabama. The transfer will cost $147 million and will add 216,000 four-cylinders each year to the mix at Huntsville, Ala., where it already makes V6 and V8 light-truck engines.

It's good news to workers in Huntsville as 240 workers will be hired for the expansion. The four-cylinder engines, which will go into Camrys built in Indiana and RAV4s assembled in Woodstock, Ontario, had been coming in from Japan.

This move is part of Toyota' target to cut $9.42 billion in global costs in the current fiscal year that began April 1.

A net loss of $7.7 billion for the January-March quarter was reported by the company, which added that the result was worsened by a steep rise in the yen's value against the sinking dollar.

Apparently, the exchange-rate shift makes building engines and other components, as well as vehicles, in the United States more attractive.

Another reason that Toyota has for the move is that a part of the US plant has been unused due to the collapse of its Toyota Sequoia SUV and Tundra pickup segments. This prompted Toyota to merge two V-8 engine lines at Huntsville.

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