Toyota Puts Brakes On North American Prius Plant

In a sign of the times, Toyota announced yesterday that it was putting the brakes on its Blue Springs, MS plant - originally intended to produce about 150,000 Highlander sport utility vehicles, and later repurposed to produce Prius hybrids. The company says it does not know when it will finish construction on the plant, which insiders say is about 90% finished.

Poor auto sales across all sectors - including the company's Prius - are being cited for the decision. According to the company, when gas prices were high, the vehicle was selling for about $5,000 over invoice. With the steep decline in oil prices, the vehicles are selling at or near invoice and the company does not want to increase the supply of vehicles on the market.

The State of Mississippi offered Toyota nearly $300 million in incentives to convince the company to build its $1.3 billion plant in Blue Springs. The plant was originally supposed to employ about 2,000 people and was to begin production of 2010 models. This summer, the company did an abrupt about-face and changed its plans for the facility, shifting truck production to plants in Texas and Indiana , and retooled Blue Springs for what was supposed to be the first North American Prius plant.

Toyota says that the few employees already assigned to the Blue Springs plant will be shifted to other tasks, and that currently there is no timetable to bring the plant online.

Photo Credit: Loring Loding