One of the Triangle's largest manufacturers will add hundreds of jobs over the next two years and invest more than $100 million in its Durham plant after being awarded a contract from beleaguered auto maker Toyota.
After years of churning out transmissions forTacomas, Tundras and Sequoias, AW North Carolina said Thursday that it will add a production line next year dedicated to making transmissions for many of Toyota's passenger vehicles.
The contract deepens AW's relationship with Toyota, its only customer, and is yet another sign of how foreign automakers are moving parts manufacturing closer to their U.S. assembly plants.
The transmissions are currently made in Japan by both Toyota and Aisin AW, the parent company of AW North Carolina.
Michelle Krebs, a senior analyst with Edmunds.com, said a weak U.S. dollar, lower labor costs in the American auto industry, and a desire to avoid long supply lines and high shipping costs are all factors in the shift.
"It's an economic and logistical decision," she said.
AW's announcement comes as Toyota is under fire for its quality control. Safety issues with a number of the carmaker's models have led to a series of recalls that have dented its reputation.
AW opened its factory in Durham's Treyburn Industrial Park in 2000. In addition to making transmissions for Toyota's heavier, rear-wheel drive vehicles, the plant also makes components for the Camry and a few other models.
Will Collins, a vice president with AW, said this latest opportunity is the result of years of hard work by the company's employees. "Our credibility's been good with Toyota, and they've beenvery satisfied with our past performance," he said. "It's just kind of a reinforcement that our team members are earning these projects."
AW expects to add up to 360 jobs within two years. It won't begin hiring for the new production line until spring 2011. The jobs pay from $11.50 to $16.30 an hour.
The Durham plant employs about 900 people now.
A year ago, AW offered buyouts to hundreds of workers as Toyota, like all car companies, cut production in response to the global recession. AW began bringing back workers last fall as demand picked up, and Collins said the company hopes it will be able to bring more former employees back next year.
Collins said AW's business has not been hurt by the spate of recalls Toyota has made in recent months. The company doesn't make transmissions or other parts for the best-selling Toyota models involved in the recalls, including Corolla and Prius.
AW's jobs announcement Thursday was unusual in that the company is not receiving money from either the state's One North Carolina Fund or a Job Development Investment Grant.
As it did in 2000, AW will qualify for some other job-creation tax credits and worker-training assistance. Collins said the company didn't think it would qualify for other incentives.
Though North Carolina does not have any major auto plants, it is home to about 160 companies that make and assemble various types of motor vehicles.
Those operations employed more than 17,000 people in 2008, according to the latest data from the N.C. Commerce Department.
Dale Carroll, deputy secretary for the Department of Commerce, said AW is creating the kind of manufacturing jobs the state needs.
"These are the types of advanced manufacturing operations that are going to be great for our state," Carroll said.
