By Dan Shaw, Evansville Courier & Press
When Toyota opened its Princeton factory in 1998, several companies moved nearby to supply parts for the Tundra pick-up trucks made there.
Although Toyota's decision to make the trucks only in San Antonio affects many, it perhaps falls the hardest on those suppliers.
Toyota plans to move the production of the Tundra in spring 2009. But even before then, the low demand for large vehicles will lead the Princeton plant to suspend making both the Tundra and Sequoia sports-utility vehicle between Aug. 8 and early November.
Toyota itself has pledged to avoid laying off its 4,500 Princeton employees during those changes. But several suppliers of the plant can't give the same assurance.
The Dana Corp. factory in Owensboro, for instance, laid off around 100 workers last month in response to Toyota's earlier decision to slow production of the Tundra and Sequoia. The Owensboro factory is dedicated to making frames for those vehicles.
"In the near term, we will closely mirror the production schedule at the Princeton facility," said Jeff Cole, a spokesman with Dana. "If Toyota is not making Tundras and Sequoias, we won't be making frames in Owensboro."
Cole didn't know if Dana would gain from Toyota's decision to build the Highlander SUV at the Princeton factory. He noted that Highlander has a "unibody" construction, which is fundamentally different from the frames on which the Tundras and Sequoias are built.
Still, the making of the Highlander in fall 2009 may bring new opportunities.
"We have the proximity," Cole said. "Our people understand the Toyota production system."
About 230 employees now work at Dana's Owensboro plant.
Other suppliers are finding themselves fortunate to work with a wider variety of customers. David Stagnolia, the human resources manager at ATTC Manufacturing Inc. in Tell City, said about 16 percent of that ATTC factory's business comes from selling supplies to the Toyota plant in Princeton. ATTC also makes rotors, brake drums, engine caps, differential cases for Toyota factories in Kentucky, West Virginia and Canada, he said. Of the 61 assembly lines at the ATTC's Tell City plant, only two are dedicated to making supplies for the Tundra, Stagnolia said.
The worst effect Toyota's announcement may have on ATTC is that the company may have to slow down its hiring of new employees, he said. About 400 people work at the Tell City plant.
"We have hired every month to support upcoming projects," Stagnolia said.
Another supplier, Tenneco, says it's too early to tell what effect the Toyota announcement will have on production and employment at its Princeton operation, according to Jane Ostrander, the company executive director of global communications. Tenneco supplies exhaust systems to the Toyota factory.
According to a 2004 study, the money Toyota brings to Indiana is tremendous. Researches from local universities estimated the Princeton plant transacted about $1.4 billion in business a year in the Evansville area. Throughout the state, those transactions were valued at $5.5 billion and at $11.8 billion in the entire United States. That is on top of Toyota's own investment in Princeton, which the company had estimated to be worth about $2.6 billion by Dec. 2005.