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State Treasurer Tate Reeves told lawmakers during a fiscal briefing at the Capitol on Thursday that discussions are ongoing about when the automaker would begin making payments. So far, he said, the state has paid about $18 million in interest.
Barbara McDaniel, spokeswoman for external affairs manager for Toyota Motor Engineering & Manufacturing North America, said the company had agreed to begin paying interest on the loans in April.
She said that agreement was reached with state officials after the company announced in December 2008 that it would suspend preparations for the plant in Blue Springs because of the recession.
She said production at the plant was orginally scheduled to begin in 2010 and if that had happened, the facility would have employed 2,000 workers and the state would have been reaping its financial benefits. The original agreement didn't require Toyota to pay interest on those loans.
"This was a voluntary thing that Toyota offered to the governor and state because we're not going to be able to meet our original startup agreement," McDaniel said Thursday. "We were supposed to be building cars by 2010."
McDaniel said about 100 people are working at the plant, including facility specialists and management.
Lawmakers authorized $324 million in bonds for the facility that would employ about 2,000 workers.
"At some point in time they need to start paying the interest. I hope I'm still living when they do," said House Appropriations Committee Chairman Johnny Stringer, D-Montrose.
Reeves' comments to lawmakers about Toyota came as lawmakers were told revenue collections were expected to be $347 million below projections for the current fiscal year.
Rep. Cecil Brown, D-Jackson, said he didn't understand the delay on the payments.
"It was represented to us that they were paying it, and now we're hearing that they're not," Brown said.
The Mississippi Development Authority, a state agency that handles contracts for economic development projects, was closed Thursday because of an ongoing water shortage in Jackson. An MDA spokesman couldn't be reached immediately for comment.
Toyota first announced plans for the Mississippi plant in 2007 and said it would make Highlander SUVs, but the company said in summer 2008 it would build the Prius there instead.
In smart companies that type of information is not shared below the executive level until it's ready for release, and Toyota is definitely a smart company.
So your daughter's classmate's father will probably hear any news like that a day to two before the public, and the only reason he'll hear that early is because he's a "higher up manager".
The only ones that will know before that are those with 3 letter titles and some of those with titles like "President" and "Vice President" (and not even all of them, for example, they'll tell the sales and marketing VPs later in the release cycle).
Of course the "administrative assistants", we used to call them secretaries, of those people will probably know too! We used to call it "Sec Net" in the Fortune 100 companies in which I worked. Want to know anything, check Sec Net, the Secretary Network. That's one of the advantages single guys like me (and some married guys, unfortunately) got by dating secretaries! We were usually "in the loop", even when we weren't really supposed to be. Well, that and they were usually VERY HOT!! ;) Hey! Corporate warfare is hell!! :)
Bottom line, no one here locally will know anything until a few days at most before the information is released to the public.
But then, I've watched Intel corporation walk away from a partially completed 4 story building and give it and a city block of land back to a city before when they decided they weren't expanding. It sat as an eyesore for years before it was imploded to allow the city block to be developed differently. So, it wouldn't be unprecedented for Toyota to walk away at this point.
But, I don't think that will happen. They have too good an opportunity to take advantage of cheap, non-unionized labor here (remember they stated in the WSJ that they were planning to adjust their pay rates US-wide based on the Blue Springs plant estimated pay rates).
But, I don't think that it's going to be the "manna from heaven" that everyone thinks it's going to be when it does open.
The Mississippi Development Authority itself estimates that it'll take 16.7 years just for the principal and interest payback and over a 25 year period is only going to generate $693M in revenue while it costs $579M. So that's really only a $144M in positive cash flow over 25 years.
In the meantime, the plant has needlessly inflated the price of land and homes in the area with people thinking they're going to get rich selling their land and homes because of the plant. And the state has continued to spend MILLIONS working on infrastructure (roads, utilities, etc.) while other roads in the area remain in disrepair.
And now they're delaying paying what they promised to pay.
So, far that's a REALLY great deal . . . for Toyota.
And i too warned that the people would be in trouble if barbour got this plant built well i hope we are not in hock for his mistake.
As for this "Toyota deal", this is what happens when the government tries to "buy jobs". I wrote a far amount on another site when the Toyota announcement was first made about how Mississippians are going to get screwed on that deal. And that was before the delay!!
But, no one wanted to discuss or even hear about the downside associated with this deal then, and most don't want to now.
If one were to rely on the Daily Journal for all of their info on Toyota, Toyota does no wrong and this is a GREAT deal for Mississippi!!
Nearly 3 years into this "deal" and what return has the state seen on this project so far?
When one considers the MILLIONS spent on infrastructure, the MILLIONS in other incentives, and the damage to the environment that the clearing of all all land will cost us forever, the $18M in loan interest is a drop in the bucket.
I once had a calculation of the cost per job in dollars (not considering the environmental impact) that the plant would wind up costing Mississippi but I can't put my hands on it now. But, I think that the state's incentive package to Toyota was close to $300M.
Yes, jobs are great, but not jobs at any cost!