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Toyota to build Prius in US, scale back truck production

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Marianna Day Massey/ZUMA Press/NEWSCOM/FILE

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Toyota announced Thursday that it will begin manufacturing its iconic Prius hybrid in the United States for the first time.

According to a Toyota press release, the Prius will be built at a plant under construction in Blue Springs, Miss. Production is scheduled to begin in late 2010.

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According to the press release, the Mississippi plant was originally to build Highlander SUVs. Those will now be built at a Toyota plant in in Princeton, Ind. Currently, the Princeton plant now assembles Tundra pickups, whose production will be consolidated at another plant in San Antonio, Texas.

Additionally, the company will be shut down production of its Tundras and Sequoia SUVs for three months, so that it can sell off its backed-up inventory.

The moves are a response to a sudden shift this year in American car behavior. As gas prices have spiked, the driving public has been eschewing gas-guzzlers and embracing hybrids.

According to the Detroit Free Press, sales of the Tundra (whose 4WD, 5.7-liter version gets 13 miles per gallon in the city) fell by 52.9 percent in June. For the year, sales are down 7.6 percent. Sales of the Sequoia (also getting 13 m.p.g. city) are higher than last year, but dealer inventory is also high.

The Prius, meanwhile, has been selling like hotcakes. In April, sales of the gas-electric hybrid rose by 61 percent, only to fall by 37 percent the following month when the company ran out of cars to sell. In June, sales fell by another 2.6 percent, according to the Washington Post.

News outlets are describing Toyota's move as unusual for a company that has a reputation for accurate long-term forecasting and minimizing excess inventory. The Detroit Free Press quotes University of Michigan professor Jeffrey Liker, author of four books about Toyota's corporate culture, who says that the shift will be a "painful process."

"It's very unlike Toyota," Mr. Liker told the Freep. "Toyota has not been that way in the past."

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That said, Toyota's workers will likely fare better than those at GM, which in early June shut down four plants that provided jobs to 10,000 people. The New York Times reports that more than 4,000 Toyota workers will be affected – about 10 percent of the total US workforce – but that the workers will be paid to attend training sessions during the shutdowns.