Stringer Says Toyota is ‘New Beef Plant’

Adam Lynch

House Appropriations Committee Chairman Johnny Stringer, D-Montrose, compared the state's investment in the Toyota plant to its investment in the failed Mississippi beef processor's plant.

by Adam Lynch
January 12, 2010

House Appropriations Committee Chairman Johnny Stringer, D-Montrose, compared the state's potential loss in the delayed Toyota plant, near Tupelo, to the failed Mississippi Beef Processors LLC plant, today.

In 2007, legislators and Gov. Haley Barbour approved a $293.9 million incentive package for Toyota Motor Corp. to cover costs for infrastructure for the 1,700-acre site, including new roads, water and sewer lines. Toyota initially slated the plant to open its doors in 2010, but set back its prediction after the economy tanked. Planners also changed the plant's manufacturing design, switching its production from off-road vehicles to gas-saving hybrid cars.

The Mississippi Beef Processors plant, in comparison, closed in August 2004 in Yalobusha County, after only three months in operation, costing taxpayers about $50 million. In 2006, beef plant owner Richard Hall pled guilty to charges of state mail fraud and federal money laundering. Other executives, including Robert L. Moultrie, Nixon E. Cawood, and Charles K. Morehead, also pled guilty to felonies connected to the plant in 2008.

State Treasurer Tate Reeves presented a budgetary overview to the joint appropriations committee this morning showing that the state converted $165 million of its investment into the Toyota plant site into long-term debt. Reeves also revealed that the state's total bonded indebtedness will rise dangerously close to $3.5 billion in 2010, prompting Stringer to voice misgivings in the face of plummeting revenue shortfalls.

"The Toyota plant is the new beef plant, in my opinion. The beef plant today works 275 people, but there's nobody working at the Toyota plant, besides security. We've got $165 million invested, and we had $50 million in the beef plant," Stringer told reporters.

"They've been meeting their county obligations, but not to the state. We've already paid $18 million in interest, so add that $18 million to the $165 we've already invested in them. That's the total that we've got in it, but we don't have any jobs."

Reeves said he was confident that the Toyota plant would eventually pay off.

"We have a memorandum of understanding in place, such that if they were to never open we wouldn't owe anything. They would owe it all," Reeves said. "They've gone above and beyond what their contract even requires them to do, and I'm confident they'll be fully open when the global demand of their automobiles improves."

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