Isuzus Alabama Plant Derailed

By: Anthony Fontanelle

Isuzu Motors Ltd. has mothballed its plan to build light commercial truck plant which was reported to be destined for Pinson.

Isuzu President Susumu Hosoi told Kyodo News agency Wednesday that the company is worried the subprime mortgage crisis will hurt the U.S. economy, and that the concerns are serious enough to put the company's plans for a North American plant on hold.

"Our projections for the U.S. market down the road are not very good, and we can't see sufficient volume" of sales coming from there, said Hosoi.

Last year, the automaker purchased a 300,000-square-foot warehouse on Pinson Valley Parkway for $8 million. Individuals familiar with the state and local efforts to recruit Isuzu said that the company planned to build light commercial trucks and employ as many as 1,000 people at the site, The Birmingham News reported.

It is too early to give up on the project, though, said Metropolitan Development Board President Ted von Cannon. Von Cannon, the head of the partnership that recruits new businesses to the area, said last Wednesday that projects are sometimes delayed because of global economic conditions. "I have not been told this is a dead issue," von Cannon added. "We will continue to move forward with all projects big and small."

Gov. Bob Riley met with Isuzu leaders on a trip to Japan in October, and said that the talks were "enthusiastic" and "very positive."

Isuzu's truck sales in North America increased about ten percent to 27,000 in 2006, and the automaker said its goal was 50,000. Nearly all of Tokyo-based Isuzu's vehicles sold in the U.S are imported from Japan.

The plant has been the subject of much discussion. In September, Automotive News reported Isuzu has delayed breaking ground on the Pinson plant because it was considering a site in Mexico. In April, Nikkei, a Japanese newspaper reported Isuzu planned to build in Pinson and produce 5,000 trucks a year.

The maker of Isuzu radiator already makes commercial trucks in Japan. The trucks are equipped with a low cab and boxy cargo area usually used by contractors, delivery services and plumbers. Isuzu also operates a commercial truck assembly plant in Janesville, Wis., in partnership with General Motors Corp.

In the automotive industry, the buzzword is expansion. Expansion is not limited to enhancing or any auto part for that matter. It means expansion of reach to compete closely in the global arena.

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