Bill could blacklist Toyota supplier in Mississippi

A measure approved by lawmakers to cut Mississippi's financial ties to Iran could have "unintended consequences" for Toyota Motor Corporation, one of the state's biggest employers with its $1.3 billion Corolla plant near Tupelo.

House and Senate members this week passed the Iran Divestment Act, which prohibits Mississippi from doing business with entities having certain financial investments in Iran and requires the state's finance director to publish a list of such entities.

A company called Toyota Tsusho appears on a list of entities blacklisted by other states – namely South Carolina and New Jersey – that have enacted identical versions of the Iran Divestment Act.

Toyota Tsusho has several U.S. operations, including one in north Mississippi serving the Toyota manufacturing plant. Toyota Tsusho processes steel on the auto manufacturing site and also provides tire and wheel assembly at a nearby facility, according to the Northeast Mississippi Daily Journal.

It's also an affiliate of Toyota Motor Corporation, which received nearly $300 million in state incentives to build its auto manufacturing plant.

Not immediately clear is whether the company's ties to Toyota Motor Corporation would also exclude Mississippi from providing further incentives to the auto manufacturer. The Iran Divestment Act extends the financial ban to "any successor, subunit, parent entity or subsidiary of, or any entity under common ownership or control with" the identified entity.

Toyota spokesman Ed Lewis said that company officials were trying to determine what impact, if any, the bill would have on the company.

"I haven't seen the specifics of the bill," Lewis said. "However, I'm told the language is fairly broad. If that's the case, it could obviously have unintended consequences which might affect us in some way."

Lewis also said Toyota Tsusho purchases Iranian crude oil "under a special exclusion from the US National Defense Authorization Act, which is permitted by both Japanese and US governments."

A Toyota Tsusho representative didn't return a call for comment.

Toyota Motor Manufacturing Mississippi opened in November 2011 and employs 2,000 people, according to the company website. The state provided TMMM at least $296 million in incentives.

"After the Senate voted, we found out that this bill threatens Toyota in Mississippi," said state Sen. David Blount, D-Jackson, who voted "present" on the bill. "This is another example of the dangers of copying and pasting national, special-interest bills in the Mississippi Legislature."

State Sen. Nancy Collins, R-Tupelo, co-sponsored the bill and introduced it on the Senate floor. She said Mississippi shouldn't do business with anyone tied to a terrorist country that's developing nuclear weapons. She also noted that President Barack Obama signed a 2010 law giving states authority to pass such measures and that 30 other states already have done so.

"Iran hasn't been friendly to the United States," said the bill's other co-sponsor, state Sen. Phillip Gandy, R-Waynesboro.

Gandy said he doesn't think the bill will impact Toyota.

Other auto-related companies also appear on other state's lists of companies with investments in Iran. They include Hyundai Heavy Industries and Mitsubishi Corporation. A majority of the banned entities, though, are oil companies.

The House passed its version of the Iran Divestment Act, HB 1127, on Monday. The Senate passed its version, SB 2807, on Thursday, but Blount held the bill on a procedural motion, meaning lawmakers have to vote again before it can leave the Senate floor. They have until Monday to do so.

It's unclear if the Toyota supplier would appear on Mississippi's list, if the measure becomes law. The bill does currently include a provision exempting entities with investments made prior to the passage of the law as long as the entity plans to cease such investments.

Contact Emily Le Coz at (601) 961-7249 or elecoz@jackson.gannett.com. Follow @emily_lecoz on Twitter.