Toyota says Ind. plant retooling to cost $500M

PRINCETON, Ind. - Toyota Motor Corp. says in a federal filing that retooling its southwestern Indiana plant for production of the Highlander sport utility vehicle will cost about $500 million.

Toyota announced last year that it would start building the midsize SUV at the Princeton factory, replacing the plant's Tundra pickup assembly line. Production of the smaller Highlander, which some hope will be more popular given high gas prices, is scheduled to begin in October.

Toyota spokeswoman Kelly Dillon said the $500 million, which was disclosed in a document filed with the Security and Exchange Commission on June 24, will be used solely for new equipment, not to expand the Princeton factory or create additional jobs. Once the new equipment is in place, workers at the site will be able to make about 300,000 vehicles a year.

The plant's 4,200-person work force is down about 300 since Toyota offered Princeton employees $20,000 payments and other incentives to voluntarily leave their jobs. Besides the buyout, Dillon also attributed the reduction to normal attrition and transfers to other plants.

The new investment will raise the total amount spent on the facility to about $3.7 billion.

Greg Wathen, president of the Economic Development Coalition of Southwestern Indiana, said the investment shows Toyota's confidence in the Princeton plant.

"I think it speaks volumes about the quality of the work force here and the quality of the products they are making here," he said.

The Toyota complex is the largest employer for Gibson County, which had a 10.6 percent unemployment rate in May.

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