Is Toyota, fast closing in on General Motors as the world’s biggest car manufacturer, preparing to set up shop on the Big Three’s own turf in Michigan?

Such a thing would have been unthinkable a few years ago. But Toyota officials say Michigan is among the states being seriously considered for a massive new engine plant. And Michigan’s Democratic Gov. Jennifer Granholm, up for reelection next year, has made clear she will spare no effort to make it happen, despite her party’s long antipathy to things Japanese.

It wouldn’t be the first foreign auto presence on Michigan soil. Toyota already has a technical center near Ann Arbor, and is committed to adding a $150 million design center. Other Japanese, Korean and European automakers and their suppliers also have facilities of varying scale in Michigan. But actual manufacturing would mean lots of jobs – at least until China’s auto industry does to the Japanese what the Japanese auto industry did to the American.

Toyota may only be stringing the governor along as part of the usual effort to excite some competitive bidding for the plant among the states. But there are reasons to think Toyota is serious. For one thing, it already operates in 14 states. Adding Michigan to its stable could greatly minimize the political backlash if General Motors or Ford goes down the tubes. Moreover, the unions, or at least their leadership, are showing signs of gradually accommodating themselves to global reality:

A new DaimlerChrysler engine plant 60 miles from Detroit, for example, will operate with a single work classification, providing the same flexibility that Asian automakers have long enjoyed. It’s thus not inconceivable that Toyota would accept a union shop under the sort of “modern” contract towards which the Big Three are fitfully struggling.

After all, Toyota’s first manufacturing facility in the United States, built in 1986, was a unionized but “lean” facility in which GM was a partner.

The issue has never been union wages. According to a recent study by the Center for Automotive Research in Ann Arbor, Toyota’s compensation for its existing U.S. manufacturing workers averages about $63,000 a year, the same as the Big Three. (The average U.S. job pays about $27,000 a year.) But with a much younger work force, Toyota has so far avoided the “legacy” pension and health costs that are killing the Big Three.

Toyota has indicated no decision is imminent. A threatened strike by the UAW against bankrupt Delphi, which has threatened draconian wage and benefit cuts, could scare off Toyota. UAW militants also are threatening to put out a big stay-away sign at next weekend’s auto show if they carry out a planned protest against any effort to contain costs.

And the state supreme court – rightly if inconveniently – has ordered a review of the deal under which the state awarded Toyota 690 acres of choice land for its design center even though there was a far higher bid on the table from a local developer.

It’s also legitimate to wonder why Michigan tax dollars should go to Toyota when local companies are struggling to survive. Far better would be a deep tax cut for all – and then let the forces of competition sort out the winners and losers. But the governor insists that a general tax cut would require matching cuts in spending, which she then denounces as a mean-spirited idea.

Which goes far to explain why she is having to chase Toyota in the first place.

Mr. Bray is a Detroit News columnist.