May 17, 2020

Toyota and Mazda spark race to become next US hub of automotive supply

Toyota
Mazda
US States
Supply Chain
Jonathan Dyble
2 min
USA states map
Toyota and Mazda spark race to become next US hub of automotive supply

Having announced plans to build a $1.6bn assembly plant in the US with Mazda, To...

Toyota and Mazda spark race to become next US hub of automotive supply

Having announced plans to build a $1.6bn assembly plant in the US with Mazda, Toyota has sparked a bidding war among US states seeking to land the factory on their turf. 

The plant demonstrates Toyota’s ambition of expansion into the US market, with a further $11.6bn planned for US investment in the next five years.

The announcement also comes amidst the threat of US import tariffs being placed upon the auto industry, with President Donald Trump pushing for onshoring in the country.

"We understand the direction that we are getting from the administration and that is to build more in the US," said Toyota North American Chief, Jim Lentz.

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Toyota announced that it has not yet decided on where the facility will be built, but will be looking to locate it close to its existing supply chain which is currently spread across eight southern and mid-western states - all of which are likely to be vying for the plant. 

The facility, once built, is expected to provide 4,000 jobs, with states looking upon this even more favourably with the automotive industry generally paying generous wages and creating spin off jobs at servicing companies and suppliers.

Southern states are said to have the advantage, with access to major ports, good transportation infrastructure and business friendly regulations. However, it is likely to come down to an economic arrangement, meaning all viable states are in with a chance of securing the investment.  

Just last week Foxconn was awarded $3bn in refundable tax incentives by the state of Wisconsin after agreements to build a $10bn LCD panel factory in the state, and Toyota and Mazda will most likely be looking for a similar deal with their own facility.

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Jun 9, 2021

Biden establishes Supply Chain Disruptions Task Force

supplychain
Supplychainriskmanagement
Procurement
Biden
3 min
US government lays out plans for supply chain transformation following results of the supply chain review ordered by President Biden in February

The US government is to establish a new body with the express purpose of addressing imbalances and other supply chain concerns highlighted in a review of the sector, ordered by President Joe Biden shortly after his inauguration. 

The Supply Chain Disruptions Task Force will “focus on areas where a mismatch between supply and demand has been evident,” the White House said. The division will be headed up by the Secretaries of Commerce, Transportation, and Agriculture, and will focus on housing construction, transportation, agriculture and food, and semiconductors - a drastic shortage of which has hit some of the US economy’s biggest industries in consumer technology and vehicle manufacturing. 

“The Task Force will bring the full capacity of the federal government to address near-term supply/demand mismatches. It will convene stakeholders to diagnose problems and surface solutions - large and small, public or private - that could help alleviate bottlenecks and supply constraints,” the White House said. 

In late February, President Biden ordered a 100 day review of the supply chain across the key areas of medicine, raw materials and agriculture, the findings of which were released this week. While the COVID-19 health crisis had a deleterious effect on the nation’s supply chain, the published assessment of findings says the root cause runs much deeper. The review concludes that “decades of underinvestment”, alongside public policy choices that favour quarterly results and short-term solutions, have left the system “fragile”. 

In response, the administration aims to address four key issues head on, strengthening its position in health and medicine, sustainable and alternative energy, critical mineral mining and processing, and computer chips. 

Support domestic production of critical medicines

 

  • A syndicate of public and private entities will jointly work towards manufacturing and onshoring of essential medical suppliers, beginning with a list of 50-100 “critical drugs” defined by the Food and Drug Administration. 
  • The consortium will be led by the Department of Health and Human Services, which will commit an initial $60m towards the development of a “novel platform technologies to increase domestic manufacturing capacity for API”. 
  • The aim is to increase domestic production and reduce the reliance upon global supply chains, particularly with regards to medications in short supply.


Secure an end-to-end domestic supply chain for advanced batteries

 

  • The Department of Energy will publish a ‘National Blueprint for Lithium Batteries’, beginning a 10 year plan to "develop a domestic lithium battery supply chain that combats the climate crisis by creating good-paying clean energy jobs across America”. 
  • The effort will leverage billions in funding “to finance key strategic areas of development and fill deficits in the domestic supply chain capacity”. 


Invest in sustainable domestic and international production and processing of critical minerals

 

  • An interdepartmental group will be established by the Department of Interior to identify sites where critical minerals can be produced and processed within US borders. It will collaborate with businesses, states, tribal nations and stockholders to “expand sustainable, responsible critical minerals production and processing in the United States”. 
  • The group will also identify where regulations may need to be updated to ensure new mining and processing “meets strong standards”.


Partner with industry, allies, and partners to address semiconductor shortages

 

  • The Department of Commerce will increase its partnership with industry to support further investment in R&D and production of semiconductor chips. The White House says its aim will be to “facilitate information flow between semiconductor producers and suppliers and end-users”, improving transparency and data sharing. 
  • Enhanced relationships with foreign allies, including Japan and South Korea will also be strengthened with the express proposed of increasing chip output, promoting further investment in the sector and “to promote fair semiconductor chip allocations”. 
     

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