Summer 2009

For more information on the South's automotive industry, go to www.SouthernAutoCorridor.com.

V-Vehicle Meets Equity Goal for Prospective Louisiana Plant

V-Vehicle Co. (VVC) has met the second obligation of its contract with the State of Louisiana that allows the company to access another portion of the $67 million committed by the state as part of its incentive package, said Louisiana Economic Development Secretary Stephen Moret in late August. The company, which plans to begin assembling a new mystery car in the former Guide Corp. plant near Monroe, La. by the end of 2010, has provided confirmation to the state that it has raised more than $50 million in equity. Moret said that the threshold entitles the company $10 million in state money, as well as office space in the state-owned former State Farm Operations Center. It also triggers a deal for the state to begin a Louisiana Fast Start program for VVC. Fast Start is a program designed to deliver a turnkey work force to the company. Moret said that "only a handful" of U.S. venture capital projects this year have matched V-Vehicle's level of capital raised, pointing to seven such projects reported by PricewaterhouseCoopers' National Venture Capital Association MoneyTree Report. VVC chief executive Frank Varasano said he hoped the startup automaker would raise about $100 million by the fall quarter.

Nissan Unveils Zero Emission Hatchback

In what is a preview of the electric vehicle Nissan will assemble at its plant in Tennessee, Nissan Motor Co. CEO Carlos Ghosn unveiled the first commercial model of the Japanese automaker's new zero emissions car. The Nissan Leaf was shown to a crowd at a ceremony in early August in Yokohama, Japan. Earlier in the summer quarter, Nissan was granted a $1.6 billion loan from the U.S. Department of Energy and the automaker is using the money to make improvements at its plant in Smyrna, Tenn. in order to create capacity of up to 200,000 electric vehicles annually for the U.S. market by 2013. The expansion will create about 1,300 jobs at the Smyrna plant.

Toyota Engine Plants in the South Adding Production, Employees

Toyota officials announced in late August that four-cylinder engine production is being added to the Japanese automaker's Huntsville, Ala. plant. The $147 million expansion will allow Toyota Motor Manufacturing Alabama to produce 216,000 four-cylinder engines annually once production begins next summer. The Alabama facility currently makes both V8 and V6 engines. The expansion in Alabama will result in 240 new employees, bringing that plant's total employment to over 1,000. Toyota will continue to build four-cylinder engines at its Kentucky plant and Toyota's Bodine Aluminum castings facility in Jackson, Tenn. that manufactures cylinder heads will increase capacity in response to the new four-cylinder production. Also, Toyota Motor Manufacturing West Virginia in Buffalo will begin producing engines for the Highlander mid-size SUV beginning late this year. Currently, the Buffalo plant makes four and six-cylinder engines for Toyota and Lexus.

What to do with a Vacant GM Plant?

With GM out of bankruptcy but still facing a cloudy future, we can only speculate on what will happen to the six General Motors plants that are still in operation in the Southern Automotive Corridor. Those plants, located in Kansas City, Kan., Wentzville, Mo., Bowling Green, Ky., Spring Hill, Tenn., Shreveport, La., and Arlington, Tex., could end up like another GM plant that closed in the South three years ago; Vacant. And in an economy like this, there's not much of a market for multi-million-square-foot former automotive factories. Or is there?

In 2006, GM closed its 3.8 million-square-foot Oklahoma City assembly plant leaving local and state officials wondering what to do with the monster facility that sits on 430 acres.

Through the leadership of the Greater Oklahoma City Chamber of Commerce, the city, county and state rallied to purchase the plant and repurpose it to support the community's thriving aerospace industry, or more specifically for use by the Tinker Air Force Base. Tinker is the Air Force's largest base due to its emphasis on maintenance, repair and overhaul of military aircraft and engines. The base employs 26,000 workers.

Now called the Tinker Aerospace Complex, the former GM plant now houses about 100 workers and that figure is projected to increase to 800 by the end of the year. Oklahoma City Mayor Mick Cornett said, "The officials at Tinker are enthused, the Pentagon is impressed and it helps solidify our relationship with the most important economic driver we have."

Shortly after GM's announcement to close the plant, Oklahoma City voters approved a $55 million bond issue to buy the property and lease it back to the Air Force for $1 a year in exchange for retrofitting the plant and using it to replace aging maintenance buildings at Tinker.

VW Activating FTZ Status, May Build Other Models in Chattanooga

In a request this summer to activate Volkswagen's plant site in Chattanooga as a foreign trade zone, VW officials estimated that about 20 percent of the vehicles that will be assembled at the facility will eventually be exported. April Wortham, VW's community relations director, said that the 20 percent figure is just a starting point and that it was part of the application with the FTZ Board. The two other German automakers operating assembly plants in the Southern Automotive Corridor -- BMW in South Carolina and Mercedes-Benz in Alabama -- export vehicles worldwide from those plants. As part of the FTZ filing process, VW was required to identify the type of product it intends to produce. VW used the category of "light-duty vehicles," which would include the mid-sized sedan slated to be built, but also could include other models. Stefan Jacoby, VW of America's CEO, said recently that the automaker is investigating a second product to be assembled in Chattanooga. The plant is expected to open in 2011.

ALABAMA

Hyundai Supplier Expanding in Alabama

Hanil E Hwa Interior Systems announced plans in August to establish a new assembly line and distribution center at its facilities in Selma, Ala. The deal is expected to create 10 new jobs. The new assembly line will be used to supply Hyundai's Montgomery, Ala. assembly plant with interior door trims for its new Sonata model.

FLORIDA

Volkswagen Opening Distribution Center

In the summer, Volkswagen of America president and CEO Stefan Jacoby attended the opening of the company's new 240,000-square-foot, $30 million distribution center in Jacksonville, Fla. The new center, which will serve 115 VW and Audi dealerships in the Southeast, houses 40 workers. The center is part of VW's efforts to triple car sales in the U.S. by 2018. The Jacksonville project, the company's new assembly plant in Tennessee and its relocation of its North American headquarters to Virginia two years ago are all part of that effort.

GEORGIA

Exide Battery Creating 200 Jobs in Georgia

Exide Technologies, a lead-acid battery manufacturer, has received a $34.3 million federal grant and will create 200 manufacturing jobs at its location in Columbus. Exide is expanding to produce advanced AGM flat plate batteries at its Columbus facility. The fuel-saving batteries have numerous industrial and transportation applications.

NORTH CAROLINA

Continental Teves Expanding N.C. Brake Plant

A subsidiary of German auto parts maker Continental AG announced plans in late July that it will expand operations at its Fletcher, NC. brake plant. The company is hiring 338 workers to expand its production of brake systems for original equipment manufacturers, more than doubling the current work force at the plant.

SOUTH CAROLINA

Koyo Expanding S.C. Plant

Koyo Corp., a major supplier of bearings to the automotive industry and a corporate citizen of South Carolina for 34 years, announced in the summer quarter it is investing $10 million in its plant in Orangeburg. The expansion will add land, building and equipment at its facilities in Orangeburg.

Johnson Controls Announces Plan to Locate New Facility in South Carolina

Wisconsin-based Johnson Controls announced in June that it plans to build a new battery recycling facility in Florence, S.C. The facility represents a capital investment of more than $100 million and the creation of 250 new jobs.

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