News that Toyota Motors will build the batteries to power its coming fleet of electric vehicles at a new factory in Randolph County, just south of Greensboro, spread quickly.
Just a few days after the Dec. 6 announcement, Greensboro Symphony Maestro Dmitry Sitkovetsky essentially dedicated the orchestra’s debut performance in Steven Tanger Center to Toyota. His comments received a loud ovation from the near-sellout crowd.
A few days later, Randolph County Commission Chair Darrell Frye was shopping at the Walmart in Archdale when an elderly constituent stopped him.
“Saw you on TV the other day,” the man said. “You were talking about that new battery factory. … That is the best news around here in years. It’s going to be great. Thanks for working that up.”
Pleasing a Walmart shopper and the symphony crowd in one fell swoop is a rare feat, any politician would confirm. But attracting Toyota to the Triad has that kind of dynamic impact, a signal economic development achievement likely to shape the region for decades, according to more than a dozen people involved in the project.
“We know it’s big — real big — but no one really knows exactly what will happen down the road,” says former Greensboro Mayor Jim Melvin, executive director of the Joseph M. Bryan Foundation, which has provided critical funding and leadership since about 2011. “We don’t know what all Toyota will do there, but this is the world’s second-largest automaker (behind Volkswagen). … Toyota is a company that does not go backward. So it’s a pretty good bet that we won’t either.”
The battery factory is just a beginning, Frye adds. “It’s hard to think of all the places this could take us.”
‘Best in town’
Toyota is investing $1.3 billion in a 1,825-acre campus in northeast Randolph County. Toyota’s first electric battery facility in the United States is scheduled to crank up in 2025 with an expected 1,750 employees and four assembly lines. Further development may more than double the size of the workforce.
If Toyota hits its investment and job creation targets, the supporting investment by public and private organizations at the site will exceed $700 million through 2064. Construction of the plant will also produce a major local stimulus. Toyota is sending more than 100 staffers to supervise construction with contracts soon to be let for site work, machine tooling and other support. Improving the area’s robust transportation network of railroad lines and interstate-like highways will require more construction and jobs.
Taxes on equipment and an annual payroll of more than $100 million will help fill state and local coffers. Randolph County expects its $14 million investment to be recovered in relatively short order, says Frye. Toyota pledges that its philanthropy will be the “best in town” for each of its markets, and boosters expect major ancillary benefits for the area.
Toyota’s past practice has been to host key suppliers on its own campuses. The company’s purchase of the entire 1,825-acre site suggests a similar setup is planned in North Carolina. New industrial, retail and residential development in adjacent areas also is expected.
A battery plant won’t draw as many suppliers as an auto-making facility because fewer parts are required. But some suppliers will locate plants and warehouses in the region, says Kevin Franklin, president of the Randolph County Economic Development Corp.
“We’re developing other sites, and we certainly want as many of these other new jobs — suppliers and so on — in Randolph County as possible,” he says. “Some will have to be close by, and that favors us as the county where the site is located. But throughout this process, everyone involved has understood that this can be something that benefits an entire region, an entire state.”
Start the evolution
Toyota’s first batteries won’t roll down the lines for three and a half years at a site that’s taken more than a decade to assemble. “As things progress, I think there will be more understanding that this is not something that’s just going to fall out of the sky all at once,” says Brent Christensen, CEO and president of the Greensboro Chamber of Commerce.
“It happens over a long period of time — five years, a decade, and longer. There’s going to be a long roll-out,” he adds. “That’s a good thing. It allows for the process to be smooth, for some of the growth to be absorbed. This really has to be viewed in that sort of way.”
Christensen and other project leaders picked the code name “Darwin” for the Toyota project, suggesting an evolutionary event for the region that opens the door for significant opportunities.
The most obvious addition is a new era of manufacturing power in the Triad, which foundered in recent decades from the loss of textile and furniture factories. Population in the Charlotte and Triangle areas has grown at more than twice the clip of the Greensboro-Winston-Salem region over the past 20 years. The region has 30,000 fewer people employed now than in 2000, federal data shows.
But Toyota’s battery plant, and associated industries, could bring as many as 10,000 jobs, averaging more than $60,000 annually over the next 20 years. Many expect the company to add an adjacent EV manufacturing facility. Several existing U.S. automotive production facilities are near Toyota’s internal-combustion engine factories. Preliminary megasite plans on file with Randolph County show a 1,000-acre footprint with numerous buildings.
At the announcement attended by Gov. Roy Cooper and many state leaders, Toyota North America Chief Administrative Officer Chris Reynolds said, “this is only the beginning.”
A Toyota spokesperson says the comment referred to the company’s future with electric vehicles and nothing more. But of course it does, local leaders say.
The BMW effect?
Toyota’s announcement also may unlock development that is only loosely connected to batteries, cars and transportation. Greenville, S.C.’s experience with BMW — which operates an 11,000-employee manufacturing campus on Interstate 85 between Greenville and Spartanburg — is an example of this phenomena.
The German automaker began production in 1994 and has made a huge mark. Outposts on the BMW supply chain dot the landscape. Trucks and trains full of parts and completed vehicles pass each other daily from a new inland port near Spartanburg on their way to the Charleston port.
Greenville leaders remain amazed at the business that came because of BMW’s location decision. The area has added more than 370,000 people over the past 20 years, a 66% gain. Its downtown has become a popular entertainment district.
“When BMW began to look for a place, I know that there were conversations we (local leaders in Greenville) knew nothing about that took place with companies — not auto companies — that BMW knew who had been successful here,” says Mike Farris, CEO of Greenville Development Corp. “I’m sure (Toyota in the Triad) will have a similar effect. It will take time, but word does spread that way.”
BMW’s presence in South Carolina helped attract other European-based businesses to the Greenville area, says Bobby Hitt, a former state commerce secretary. It helped persuade Boeing to expand to the Charleston area in 2011, he adds.
“You do like to see your city mentioned in The Wall Street Journal, other places,” Jim Melvin says. “That lets people know that there just might be something going on down in North Carolina. We were doing fine before, but this is better.”
There’s also hope that Toyota’s expansion will help turn the Triad and central North Carolina into a hub for a vital technology of the 21st century. Many battery-building partnerships are being formed, while major automakers are ramping up their battery supply chain, a natural response to government policy worldwide that is accelerating EV development. President Joe Biden and Gov. Cooper are pushing for EVs to account for 50% of new vehicle sales by 2030, up from about 4% currently.
The science and engineering communities are pressing for battery technology breakthroughs in vehicle range, charging time, cost and safety measures. Fortunately, North Carolina has a lot of pieces that could lead to a hub where brains, business and capital come together in a “Lithium Hills” environment, economic development executives say.
Belmont-based Piedmont Lithium is working on a $500 million effort in Gaston and Cleveland counties to mine the critical material for many electric batteries. Charlotte-based Celgard, a Japanese-owned company that has a leading market share of components that separate the positive and negative ends of batteries, operates a 135,000-square-foot plant in the Queen City. Other component makers are within a one-day truck drive.
North Carolina also has powerhouse universities and more than 5,000 engineers living within an hour of the Randolph project.
Still, other areas have a head start in this race, and Toyota’s role as a catalyst can be exaggerated.
“Toyota is building a facility here for mass production, not research and development,” says Jin Cho, the South Korean-born CEO of startup battery equipment maker Soelect in Greensboro. He led Johnson Control’s EV development team in the early 2000s, then came to North Carolina in 2013 and later taught at N.C. A&T State University in Greensboro.
“I’m very familiar with the Japanese. … R&D generally doesn’t leave Japan,” he says. “So that will take a long time if you’re counting on Toyota to lead it.”
Toyota’s new plant will produce a battery similar to those that power its Prius and other hybrid models. Toyota’s speciality is perfecting quality and improving technique. The “battery of tomorrow” is a long-term goal.
“There aren’t many people who really know batteries around here,” Cho says. “When I was at A&T, it was me and a guy at N.C. State. There are a few more there [at State] now. As far as startups in the state, we [Soelect] are about it. You look at Silicon Valley and Stanford, and there are 300 startups. There are probably 30 in Boston around MIT. There are quite a few in Detroit. This is what we’re up against.”
Cho says he has struggled to recruit “battery people” to Soelect because there is no ecosystem in North Carolina. A state-funded battery technology center could help charge the ecosystem, Cho suggests, though he’s been unable to generate much enthusiasm so far. The Future Renewable Electric Energy Distribution and Management Systems Center at N.C. State researches battery technology, among other projects.
Frye, who has been a county commissioner for 40 years, says Toyota’s expansion creates an optimistic future.
“This is still an area where we’re based on furniture and textiles. That’s still the base here. We weathered all that but we had to do something else. We had to. There were problems developing. People were leaving. Our hospital was closing. But now we have [Toyota],” he says. “This will fix a lot of that. It will provide.” ■
A 2017 setback reinforced state leaders’ push to attract a big factory.
Attracting Toyota to Randolph County was an economic-development coup that will resonate across the state for decades to come.
For some leaders, it’s meant decades of preparation, too.
The genesis of the plan came from the Piedmont Triad Partnership in 2001, former Greensboro Mayor Jim Melvin says. But the real work began in 2011 when leaders began to focus on large tracts in Randolph and Davidson counties.
In late 2012, then-N.C. Gov. Beverly Perdue, with a push from N.C. Rep Harold Brubaker of Asheboro, awarded a $1.67 million economic-development grant to the county to create a site. Perdue’s successor, Pat McCrory, picked up the ball in 2013.
Melvin says a critical meeting involved McCrory, former N.C. Commerce Secretary Sharon Decker, and auto dealership kingpins Don Flow and Rick Hendrick. All agreed that it was time for North Carolina to assemble a serious megasite and offer a competitive incentive package. For too long, big automotive manufacturing projects were landing in more generous Southern states.
“So we said, ‘OK. You get the incentives. We’ll get the land,’” Melvin says.
In 2017, lawmakers approved aggressive incentives for massive corporate expansions after Senate leader Phil Berger — who had opposed them previously — agreed change was needed. Toyota’s incentives package, which could total more than $635 million if employment and investment targets are met, gained approval with relative ease because of backing from Berger, House Speaker Tim Moore and Gov. Roy Cooper.
As for land, Melvin’s team in 2015 hired Realtor Sam Simpson and real-estate attorney David Joseph, both of Greensboro, to plan for a site in northeast Randolph County. The area offered great access to highways and rail lines.
Simpson and Joseph recommended offering property owners 2.5 times assessed value. This would jumpstart land purchasing by Randolph County and the Joseph M. Bryan Foundation. Paying a top rate would also negate any need for eminent domain proceedings, referrring to forced sales.
“It worked,” says Melvin. “As soon as word got out, our phone started ringing off the hook.”
Adds Darrell Frye, chair of the Randolph County Commission, “It became a 401(k) for a lot of people who maybe didn’t have a 401(k).”
A single owner who controlled more than 500 acres was among the first to call. Eventually, 92 individual pieces of property were acquired. The average price was about $35,000 per acre, on par with other large commercial projects in the county.
Just as funds for land acquisition were running out, N.C. Railroad President Scott Saylor approached Melvin about joining the effort. The railroad’s board approved a $13 million investment in 2015, the first of several serendipitous events that would eventually involve more than 21 public and private entities.
Under Saylor, the railroad company — which leases track and doesn’t operate a railroad — had started investing in major projects to benefit the entire state. Its investment in the site eventually grew to $44 million.
“We were running out of money,” says Melvin. “The county had capped its land purchases at $10 million, and we couldn’t spend everything the foundation had on this project.”
Where would the money have come from if Saylor hadn’t shown up?
“Don’t know,” says Melvin. “Fortunately, I never had to ask.”
Gotta be square
The partnership acquired about 1,500 acres, which it thought was plenty. Then, Toyota suggested it might bypass the site because its shape was wrong. Brent Christensen, president of the Greensboro Chamber of Commerce, flew to Chicago to resolve the problem.
“Essentially,” recalls Christensen, “our site was a rectangle and the client was looking for more of a square.”
Additional parcels of more than 200 acres helped “square off” the megasite and meet Toyota’s needs. The result was the final 1,825-acre site.
Melvin says the team’s response to negotiating with Toyota was simple. “Basically, our answer to everything they asked for needed to be ‘yes.’ Fortunately we had the kind of teamwork and collaboration that could make that happen. It was just magic.”
Other officials cite good chemistry among a broad partnership that helped tamp down conflicts among Triad municipalities and organizations.
Indeed, forging an agreement involving conservative Randolph County and urban Greensboro was not simple. Donald Trump won Randolph County with about 78% of the vote in 2020, while President Joe Biden took Guilford County with 61%.
But Randolph County brought the site and enough dollars to the table to have skin in the game. Frye handled the local politics adroitly, although he says his support for the project, especially the first vote to purchase land, cost him the chairmanship for two years. Two other incumbents lost to newcomers who weren’t enthusiastic about the project.
The city of Greensboro is spending $21 million to extend water and sewer service across the county line to the plant. The project is unworkable without that contribution because the existing sewer system in the area is maxed out, Frye says.
Then there is $40 million from the Golden LEAF Foundation, another key state economic-development engine. That money, one of the group’s biggest single commitments, will pay for adjacent road improvements designed by the N.C. Department of Transportation. It also is making a separate $7 million grant.
Project organizers also credit Duke Energy’s ability to move a major power transmission line that runs through the site as pivotal. Major grid systems are rarely moved, but Duke created a complex plan to run the line on the edge of the site, turning it at near-right angles twice on each end.
Duke has an 18-month timetable for moving the line. Anything more would have been unacceptable to Toyota.
Company policy also prohibited Duke from contributing to a project without an identified client, so some of the foundations ponied up for the work, says Andrew Tate, Duke’s director of economic development for North Carolina. Duke will reimburse those entities when Toyota starts paying for electricity.
The utility also crafted a plan to help Toyota meet its renewable-energy goals. Toyota will work with Duke and other vendors to fund construction of renewable-energy resources to produce power comparable to what Toyota will use at the plant.
The megasite partnership weathered a variety of other storms.
A “No Megasite” move gained some traction but was largely defused by listening to local concerns, Saylor says. The new owners took good care of the land and held several meetings to assuage concerns of a local volunteer fire department that used a lake at the property as a backup water source.
HB2, the state’s “bathroom bill” that passed in March 2016 and was rescinded a year later, also caused some worry. It occurred as a joint venture of Toyota and Mazda considered a plant at the megasite. They instead chose Huntsville, Ala. in late 2017. It was the second time Alabama had won out over North Carolina for a big automotive project. (Mercedes chose Vance, Ala. in 1993.)
But out of those economic-development ashes came the realization that the Triad had the right site and right team.
Just days after the Toyota-Mazda decision, N.C. Railroad Co. board Chair Michael Walters rallied the troops at a dinner in Pinehurst. A few months later, Christensen invited site consultant Meredith O’Connor of real-estate giant JLL to address the Greensboro chamber. Her message: Don’t worry. You’ve got a great site. This will happen.
“The line that everybody remembered was, ‘Keep that champagne on ice,’” says Christensen. “And that’s what we did. We kept going forward. The team stayed together. Everybody was on board.”
In early 2021, the megasite team heard about a new client for the site, which turned out to be the old one.
“We thought all along [Toyota] really liked us,” says Melvin, “but it’s rare to get two bites from the same company.”
The conversation moved fairly quickly. The incentives were in place, and Toyota knew details of the state’s transportation and tax systems and abundant labor force. More than 800,000 people work within a 50-mile radius.
North Carolina’s low corporate tax rates are slated to decline in the next few years, and the state has few union members. Unions represent about 1,000 employees at seven U.S. Toyota sites, a fraction of the company’s 176,000 domestic workers. A union isn’t necessary because of Toyota’s collaborative business practices, a spokesperson says.
Still, competition was fierce. Toyota looked at more than a half-dozen states in the Southeast and Southwest. One contender was a site near Austin, Texas to complement Toyota’s truck manufacturing operations in San Antonio and North American headquarters in suburban Dallas.
But in late November, North Carolina officials learned that the facility was coming to the Randolph megasite.
Losing the Toyota-Mazda deal to Alabama “actually turned out to be pretty important moving forward,” says Anna Lea Moore, the N.C. Railroad’s vice president for economic development. “We weren’t successful with that project, but it was obvious to everyone involved that we had something special, that our vision was on target.”
Melvin agrees that looking ahead is always critical in economic development. He tips his hat to John Motley Morehead, North Carolina’s governor from 1841-45, who later helped create a precursor to the state railroad. That’s the same entity that is critical for a project that may reshape Greensboro, where he once lived.
“And he did all that back in 1849,” says Melvin. “Now how’s that for long-range vision?” ■