Toyota Motor Corp is resuming construction of a plant in Mississippi that was put on hold during the economic downturn, and plans to make its top-selling Corolla sedan there starting in autumn 2011.

However, the newly elected president of the United Auto Workers union decried the decision to build the Corolla at the plant as morally wrong, calling it a move by Toyota to shift work to a nonunion facility, and he promised a fight.

Toyota will hire 2,000 workers for the Blue Springs, Mississippi, facility, the company said on Thursday. Work on the plant had been suspended since December 2008 as the U.S. economy was plunging into recession.

The announcement reverses earlier plans to make Highlander sport-utility vehicles and Prius hybrid vehicles at the plant, and comes as U.S. auto sales are recovering from their worst downturn since the early 1980s.

We first needed to fully utilize our existing facilities as the economy slowed. Now it's time to fulfill Toyota's promise in Mississippi, said Yoshimi Inaba, president and chief operating officer of Toyota Motor North America.

Toyota, which undertook a massive recall of vehicles globally earlier this year, has forecast U.S. industry auto sales would rise to about 11.5 million vehicles in 2010 from 10.4 million last year.

Toyota's U.S. sales rose 10.5 percent in the first five months of the year from last year, supported by hefty discounts to win back consumers in the wake of damaging safety recalls -- a major factor in the company's plunge to its lowest ever ranking in a J.D. Power quality survey, released on Thursday. Overall U.S. industry sales were up 17 percent. [ID:nN17228457]

The Japanese automaker said nearly all Corolla production for North America will be built at the Mississippi plant.

In April, Toyota closed a plant in Fremont, California, where it previously built the Corolla, after former partner General Motors Co [GM.UL] pulled out of the joint venture as part of its post-bankruptcy restructuring. Since then, some Corollas for North America have been built in Japan, with the rest coming from a plant in Canada.

Toyota remains committed to making vehicles where we sell them and to maintaining a substantial manufacturing presence in North America, Inaba said.

The automaker will continue to import the popular Prius hybrids, which are built at plants in Japan and China. However, officials said Toyota still plans to build the car in North America, although a decision on timing has not been made.

'POUND ON TOYOTA'

Bob King, the new president of the UAW, which represented workers at the Fremont plant, made Toyota and its decision to close the Fremont plant and shift that work to Mississippi a central theme of his keynote speech at the union's convention in Detroit on Thursday.

It's wrong to close that plant and open a brand new plant with brand new workers just to get lower wages and benefits, he said to delegates.

The UAW cannot win back concessions made to U.S. automakers unless it can organize Toyota and other transplant automakers, King said. He added the UAW plans to picket Toyota dealers with banners charging the company puts Profits Before People.

We're going to pound on Toyota until they recognize the first-amendment rights of workers to come into the UAW, King said.

King, who led the UAW's protest against Toyota's decision to close the Fremont plant, said he would raise the issue with the Obama administration and also called on Toyota President Akio Toyoda to intervene and reverse the decision.

Toyota officials said it was not economically feasible to operate the Fremont plant without a partner and it had made a commitment to get the Mississippi plant operating, and the fastest way to do that was by adding Corolla there.

Toyota said work on the Mississippi plant is essentially complete, with most of the remaining work involving equipment installation. Sixty people are already working in the administrative offices, and hiring for the rest of the jobs will begin in August or September. (Reporting by Soyoung Kim, Kevin Krolicki and Ben Klayman in Detroit; Editing by Maureen Bavdek, Dave Zimmerman and Tim Dobbyn)

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