Summer 2011
For real-time news on economic development, business and politics in the American South, go to www.RandleReport.com. For more information on the South's automotive industry, go to www.SouthernAutoCorridor.com.
What's the hottest automotive market? This year it might be the U.S.
In September, Moody's provided a report that indicated China's light vehicle sales will rise by only 5% this year to 18.1 million units. Thats' a paltry increase considering car sales in China saw a 32% gain in 2010. In the report published in September, Moody's predicts sales of light vehicles to fall 1% in Europe to 14.3 units and sales in Japan are expected to drop 16% to just 4.1 new vehicles sold. The bright spot, with an increase of 8% is the U.S., according to projections. Moody's expects vehicle sales to be at 12.5 million this year in the U.S.
Mississippi-built Toyotas coming soon
At deadline Toyota was producing Corolla models at its new Blue Springs, Miss. plant (TMMMS), but none of them are for sale yet. The Japanese automaker is assembling test vehicles at the plant in order to train line workers. The working assembly line is a long time coming for officials in Northeast Mississippi. Announced in 2007, Toyota planned to open the plant in 2009 or early 2010 to produce the Highlander SUV model. While the plant was being built, Toyota decided to build the Prius model at the facility. Through several delays, it was decided that the plant would assemble the popular Corolla compact model. The 2-million-square-foot facility is expected to house 1,500 workers by the end of the year when official production is expected to be in full swing.
Mercedes investing $2 billion in Alabama plant
One of Alabama's largest corporate investments in its history was announced in late July when Mercedes-Benz revealed details of a $2 billion expansion at its plant in Vance, Ala., located between Tuscaloosa and Birmingham. Daimler AG approved the capital injection into the plant in order to prepare it for assembly of the C-class model, which is being moved to Alabama from Germany. The investment will also pave the way for a retooling of the facility for next generation R-class and G-class models that are currently being assembled at the Vance factory. Also, a fifth model will be made at the plant, a coupe-styled variant of the M-class crossover. Mercedes will assemble sedans in the U.S. for the first time at the Alabama plant beginning in 2014.
New North American Audi plant location decision may occur in October
We've heard this before over the years, but a report in July stated that Volkswagen and Audi officials are checking out sites for a new assembly plant for the upscale German automaker. Audi is part of the Volkswagen brand. VW just opened its new plant in Chattanooga, which, according to VW execs, could be expanded to produce 500,000 vehicles a year. The output currently stands at 150,000. Audi could put a new line in Chattanooga; build a new plant in Mexico or some other location in the Southern Automotive Corridor. VW also has a large plant in Puebla, Mexico. For more information on the South's automotive industry, go to www.SouthernAutoCorridor.com.
Nissan expanding rural Tennessee engine plant
Nissan announced in the summer quarter that it is investing $67.9 million in its engine plant in Decherd, Tenn. The Japanese automaker, which is headquartered in nearby Nashville, will add electric motor production for its Leaf battery-electric cars that will be assembled in Smyrna, Tenn. Up to 150,000 motors will be produced annually at the Decherd facility for the all-electric Leaf model. About 90 jobs will be added at the plant in Decherd.
UAW to represent foreign automaker?
After failing time after time to organize workers at plants owned by Toyota, Honda, Mercedes and Nissan in the Southern Automotive Corridor (www.SouthernAutoCorridor.com), UAW officials announced in the summer quarter that it expects to sign a deal with a foreign automaker in the South by the end of this year. In June, reports indicated that VW officials would be willing to talk to the UAW about organizing its plant in Chattanooga, Tenn.
Editorial
Organize the VW plant? What's the point?
By Mike Randle
Bill Poovey, the great AP writer based in Tennessee who has interviewed me many times over the years, gave an ominous end-of-conversation send off during our last conversation. His story, about the possibility of the UAW organizing the new Volkswagen plant was a good one. Just Google "Bill Poovey Volkswagen" and you will find it.
Anyway, at the end of the interview, Bill said, "Mike, get out the rifles after this one." Well, I don't own a rifle. But from time to time, I have a body guard who straps a Mini-Uzi under her skirt and she is fully employed by SB&D. If you know me well, you know her as "The Elf" and she is one bad lady at about 5-foot and 115 lbs. She is also one of the talented editors that posts each day on The Randle Report (www.RandleReport.com).
Poovey was right. His story, published in the summer titled "New VW plant on UAW radar as friendly target" ran in hundreds of newspapers and other media outlets, including The Detroit Times (uh, oh), The Seattle Times (Boeing -- ditto), USA Today, Forbes, Yahoo, The Boston Globe, NPR, MSNBC, The Huffington Post, ABC News ... you name it, it ran in it. I have never received more response from a story that I have been quoted in. There were the typical near-death threats, but in this case, just a few dozen more.
In the story, Poovey asked me about what I thought of VW seemingly being perfectly fine with UAW organizing its plant in Chattanooga. My response was, "What's the point?" I also was quoted in the article as saying, "Organizing is a '50s, '60s and '70s model. It's outdated. They (auto workers) are already being paid higher than anybody else."
Bloomberg (I am sure Michael Bloomberg has more body guards than a single elf with a Mini-Uzi), backed up my claim in a recent article that labor unions are an outdated model, particularly in the highly paid automotive industry -- foreign or domestic. Here are some excerpts from that article:
"Hyundai's lower wages and benefits have given it hourly labor costs of about $44 to $48 an hour, compared to $52 an hour at Toyota Motor Corp.'s U.S. plants and about $58 an hour at the U.S. factories of General Motors (GM), Ford Motor Co. and Chrysler Group LLC, according to Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor, Mich.
"While Hyundai officials declined to speak about specific pay, workers said the hourly rate is generous for the area" (Alabama). "Montgomery's median household income in 2009 was $42,346, about $9,000 less than the national median and $6,400 less than in Michigan, according to the U.S. Census 2009 American Community Survey.
"Wanda Carter, a Hyundai hourly worker, said she doesn't see a need for a union at the Alabama plant. 'Hyundai does the best they can do to work with the Hyundai employees,' said Carter, who declined to give her age.
"She wasn't alone," the Bloomberg article said. "Workers at another UAW target, Volkswagen AG's new plant in Chattanooga, Tenn., said they were excited just to have a job in the auto industry. There isn't any talk of forming a union, said Terry Young, a line worker. 'You don't want to look a gift horse in the mouth," said Young, 34.
So, if workers at foreign automotive plants in the Southern Automotive Corridor are making more than workers at unionized domestic plants in Michigan per hour when factoring in cost of living levels in Southern states, then "what's the point" in unionizing? There isn't one.
mike@SB-D.com
ALABAMA
Hyundai reaches highest output in August
Workers at Hyundai's Montgomery, Ala. plant built 32,300 vehicles in August, the highest output to date this year. The Korean automaker produced 20,997 Sonata sedan models and 11,303 Elantra compacts. Employees at the plant are working 10-hour days and Saturdays to keep up with demand for the two vehicles.
Korean supplier adding hundreds of jobs in Auburn
Seung Chang Airtech announced in September it is expanding its plant in Auburn, Ala. The deal is expected to bring at least 200 new jobs to the facility. The supplier makes injection-molded plastic parts and vibration and noise-dampening materials for Kia and Hyundai, among other automakers. The expansion should bring employment at the plant to around 400.
New M-Class rolls off line
In July, Mercedes rolled out the third generation M-class crossover model at its plant in Vance, Ala. At the same time, Mercedes-Benz officials announced that the company would inject $2 billion more into the west Alabama factory.
Annexed farmland in Huntsville has master plan
In 2007 and 2008, Volkswagen took a long hard look at a farm off of Interstate 65 in Limestone Co., Ala. before choosing the Enterprise South industrial park for its first U.S. assembly plant since 1988. During that site search, the city of Huntsville annexed 9,233 acres of the Limestone County land in order to help lure VW. But the site had no master plan or infrastructure in place to serve an automotive assembly plant. Now that there are reports that at least three foreign automakers are looking to build new assembly plants in the Southern Automotive Corridor -- Audi, Volvo and Hyundai/Kia -- the city of Huntsville has developed a detailed master plan for roads, schools, parks, neighborhoods and businesses that could be built around a large industrial user of the property.
Hyundai-Kia supplier to bring 150 jobs to rural Alabama
C and J Alabama, a supplier to Korean automakers Kia and Hyundai, is bringing 150 jobs to Alexander City, Ala. The company will locate in a former Russell Athletic Corp. plant.
Hyundai expanding Montgomery, Ala. engine plant
Hyundai announced in the summer it will expand its engine plant in Montgomery, Ala. The plant makes engines for Hyundai's assembly plant in Montgomery and Kia's plant in West Point, Ga. The expansion will pave the way for the Korean automaker to produce the 1.8 liter Nu engine that will be used in the Elantra model. The $173 million project will create 200 new jobs.
Rail wheel plant near Birmingham to reopen
Chicago-based Amsted Rail is reopening a shuttered railroad wheel plant near Bessemer, Ala. The company will spend $45 million to improve the facility and install new equipment. The deal will result in 130 new jobs.
GEORGIA
Big automotive industry deal goes down in Georgia
Toyo Tire North America's Bartow Co., Ga. facility is its first U.S. consumer tire production operation. The 900,000-square-foot plant has been in operation since 2006, and includes a manufacturing facility and warehouse. The company expanded by another 820,000 square feet in 2008, growing its workforce to 700 people and then added 200 workers in 2010. In July, state, Bartow County and Toyo officials signed an agreement to increase Bartow County's bonding capacity an additional $910 million. The agreement enables Toyo to expand its current facility, adding 470 new jobs over the next few years.
New auto industry tech park to be built in rural Georgia
The Americus Motorsports Complex will be built on a 450acre site in Americus, Ga. The auto industry complex will include a racing industry technology park, a drag strip and a 2.5-mile road course.
Suppliers hiring in Harris Co., Ga.
Two of Kia's top suppliers for its plant in West Point, Ga. are expanding in Harris County. Johnson Controls is adding 175 workers to its current workforce of 380 and Daehan Solution is adding 150 to its current workforce of 300.
Editorial
What a comeback: the auto industry is driving the recovery
It didn't look good in 2009 as Chrysler and GM entered bankruptcy. Earlier, Toyota had delayed the opening of its Northeast Mississippi plant and assembly plants throughout the South suspended if not stopped production altogether. We heard reports that Volkswagen, which announced its new plant in 2008 right before the *&%# hit the fan, would also delay the opening of its new Chattanooga plant. The automotive industry was dead in the South and in Detroit. Inquiries about opportunities in the South on our SouthernAutoCorridor.com Web site didn't just trickle in, they stopped coming in for months. Auto sales had hit a 30-year low. Not good.
Today, Volkswagen, Nissan, Ford, Toyota, Mercedes, BMW, GM (the new version), Hyundai, Kia and Honda are all adding capacity and jobs by the thousands in the Southern Automotive Corridor. There are also three automakers that we know of that are possibly looking at building new auto works in the South -- Hyundai-Kia, Volvo and Audi. Now, if we can just save the GM plant in Shreveport and reopen the GM plant in Spring Hill, Tenn., all will be well.
mike@SB-D.com
KENTUCKY
Gov. Beshear cuts ribbon on ZF Steering Systems' $95.8M expansion in Northern Ky.
In September, Kentucky Gov. Steve Beshear joined community leaders and company officials from ZF Steering Systems to celebrate the completion of its $95.8 million expansion in Northern Kentucky. The project entailed the construction of two new buildings totaling 175,000 square feet on its existing site in Florence, Ky. The deal creates 374 new jobs. ZF Steering is a subsidiary of Germany-based Lenksysteme GmbH and has been located in Kentucky since 1994.
Hitachi to add 100 jobs in Berea, Ky.
Hitachi Automotive Systems Americas in Berea, Ky., which recently secured a contract to manufacture components for the Chevrolet Volt plug-in hybrid vehicle, will soon begin hiring for about 100 new manufacturing jobs. Depending on the success of the contract, that number could eventually increase to 500, Berea Mayor Steve Connelly said.
FP International to create 60 new machine manufacturing jobs in Hopkinsville, Ky.
FP International has announced plans to add machine build operations to its Christian County, Ky. facility. The project will result in 60 new machine manufacturing jobs over the next several years and a $3 million investment in the Commonwealth.
Mayors of Louisville and Lexington, Ky. creating "super region"
Economic development officials and politicos in Kentucky's two largest markets -- Louisville and Lexington -- are coordinating a regional economic development bond. Mayors' Jim Gray of Lexington and Greg Fischer of Louisville are working to develop a "super region" that will market itself initially as a cluster for the automotive industry. Ford operates large facilities in Louisville and one of Toyota's largest U.S. plants is located in Georgetown, Ky., which is near Lexington.
Ford starts hiring process in Louisville
In the summer quarter Ford began the hiring process, taking applications for the 1,800 jobs the Michigan automaker is adding at its Louisville assembly plant. The expansion is part of a $600 million retooling of the plant to build the all-new Escape crossover model. As of mid-September, the plant was in the final stages of overhaul and 2,900 workers are expected to be housed at the facility by the end of the year. Combined with employment from Ford's other truck and SUV plants in Louisville, the Michigan-based automaker will employ nearly 7,000 people in Kentucky's largest market.
Cooper Standard expands in Kentucky
Cooper Standard is expanding its operations in Mt. Sterling, Ky. The automotive parts supplier is investing $3 million in its Mt. Sterling plant and will add 120 new jobs to the 310 it already has there.
LOUISIANA
Officials discuss future of GM Shreveport plant
Officials with RACER Trust, the organization formed by the U.S. Bankruptcy Court to clean and resell closed GM plants across the country, met with city, parish and state authorities in Shreveport in late July to discuss the plant's future. The plant is scheduled to close in June of 2012. RACER Trust Redevelopment Manager Bruce Rasher said in an article in the Shreveport Times, "Today we forged a very effective partnership between the parish and the Trust. We all share the same goal of seeking a new user for the facility." RACER was formed to clean up and redevelop 89 industrial plants owned by the former General Motors prior to its bankruptcy in 2009. There is still slim hope being expressed by Shreveport officials that the plant will not be closed.
MISSISSIPPI
BorgWarner expands in rural Mississippi
Michigan-based BorgWarner announced in late August it will expand its facility in Water Valley, Miss. The plant, which produces transmission controls, will add two new production lines and 120 jobs to the current workforce of 300.
Delphi to invest $15M in Mississippi plant, 200 jobs
Delphi Automotive says it's investing about $15 million to improve its manufacturing plant in Brookhaven, Miss. The investment by the international automotive supplier was announced by Mississippi Gov. Haley Barbour, who said more than 200 jobs will be retained there.
Toyota logistics company to hire 100 in Mississippi
Michigan-based KC Integrated Services is looking for a permanent location in Northeast Mississippi to serve the new Toyota plant in nearby Blue Springs. The company, which provides logistics support, has been a Tier 1 supplier to Toyota for 12 years. KC announced it will hire at least 100 workers.
NORTH CAROLINA
Celgard adding 250 jobs in Concord, N.C.
Green battery-parts manufacturer Celgard announced it is adding 250 more jobs to its plant in Cabarrus County, N.C. The company is a supplier of components used in lithium-ion batteries used in electric vehicles.
SOUTH CAROLINA
ZF Group expanding in Laurens County
In September, The automotive supplier ZF Group announced it is investing an additional $80 million in its Laurens Co., S.C. operation. The expansion is in addition to the $350 million, 900-job new manufacturing plant the company announced in 2010. The deal in rural Laurens County will mean 300 more workers will be housed at the transmission plant.
Bridgestone announces major expansion in Aiken, S.C.
Bridgestone Americas Tire Operations is expanding its plant in Aiken County, S.C. The $135 million investment in the facility will enable the company to produce an additional 4,750 passenger and light truck tires a day beginning in 2013. The deal will also add 266,000 square feet at the plant and create 122 new full-time jobs.
BMW supplier plans expansion in Duncan, S.C.; will create 130 jobs
A BMW supplier revealed details about its plans for expansion into Spartanburg County, S.C. Fehrer Automotive North America LLC announced it will invest more than $14 million to establish a 100,000-square-foot production plant in Duncan and create 130 new jobs during the next five years. The company said the announcement is in response to growth during the past few years that caused it to outgrow its current 80,000-square-foot facility in Fountain Inn, which produces seat cushions for nearby BMW Manufacturing Co.
BMW announces new jobs in Spartanburg County, S.C.
BMW has announced plans to create 100 new jobs at its Greer, S.C. plant. The new jobs will include positions for IT professionals, engineers, and production management associates.
BMW suppliers expanding all over Upstate S.C.
With sales of the Spartanburg Co., S.C.-built X3 and X5 going through the roof, German automaker BMW is lifting suppliers in the region to new heights. In July, Spartanburg County officials approved incentives for four BMW suppliers to expand their operations. Eaton Corp., Fehrer, DAA Draexlmaier Automotive and SEW Eurodrive were all approved to receive incentives from the county in exchange for tens of millions of investments in their facilities in Spartanburg County.
Tire recycler relocating China plant to S.C.
In late June, Tire International announced it will bring its operations from China to Berkeley Co., S.C. The tire recycler will invest $25 million in the new plant that will house 150 workers.
Draexlmaier Automotive announces expansion in S.C.
Germany-based Draexlmaier Automotive of America will expand its current facility in Spartanburg Co., the company reported in June. The $22.35 million investment is expected to generate 150 new jobs. The company supplies parts to BMW, GM and VW.
TENNESSEE
Quaprotek to open West Tennessee plant, hire 120
Quaprotek USA plans to open a manufacturing plant in Lauderdale County, Tenn., that will employ 120 people within five years. The German company will invest $22 million in an existing, 63,000-square-foot facility in Ripley, where it will manufacture metal parts for vehicles, engines and power trains. Ripley is located about 50 miles northeast of Memphis. Most of Quaprotek's hiring will take place in the second half of 2012.
Japan-based Sekisui Plastics to open second facility in Maury County
Sekisui Plastics, a manufacturer of foamed plastics used primarily in automotive safety components, is locating a second facility in Mt. Pleasant, Tenn. The Japanese company will invest $3 million and create 25 new jobs in the deal.
Automotive supplier Investing $5M in Gallatin
ABC Group Fuel Systems announced in the summer it will expand its current facility in Gallatin, Tenn. The expansion represents a $5 million investment and the creation of 114 new jobs. ABC is a subsidiary of Toronto-based ABC Group and is a leader in plastic automotive parts.
Tennessee lands 400 new jobs, $23M NYX plant
Michigan-based auto supplier NYX Inc. is planning a $23 million plant in Perry County, Tenn. that will create 400 jobs over five years, state officials announced. The plant, located in Linden, Tenn., will produce injection-molded plastics. The company will begin production in 2012.
C&F Group to Invest $12.5M, create 450 jobs in Kingsport
C&F Group announced in the summer it will locate a manufacturing facility in Kingsport, Tenn. The Ireland-based company will invest $12.5 million and create 450 jobs over a four-year period. The Kingsport facility, which will produce automotive trim components, is the company's first U.S. location.
VW supplier growing in Tennessee
Gestamp, the first parts supplier to build a plant adjacent to VW's new factory at the Enterprise South industrial park near Chattanooga, is adding 30,000 square feet to its facility there. The $3 million ramp up in production should add about 80 more workers.
Goodyear closes Union City, Tenn. plant
The only bad news coming out of the automotive industry in the South in the first six months of this year is the closure of Goodyear's massive tire plant in rural Union City, Tenn. The closure was supposed to occur at the end of the year, but the company stopped production in July. The plant housed about 1,800 workers in a town of 10,500 residents. The closure, according to Goodyear officials, will save the company $80 million per year.
Ohio auto parts supplier to open plant in Bristol, Tenn.
DLH Industries, an Ohio-based parts supplier for GM, announced in the summer it will expand into a 60,000-square-foot plant in Bristol, Tenn. The deal will result in 75 new jobs.
Joint venture supplier operation set for La Vergne, Tenn.
Tottser-Iroquois Industries, a joint venture between a Michigan and a Pennsylvania company has begun operations in La Vergne, Tenn. The project has created 25 new jobs.
VIRGINIA
Mazda expands in Richmond metro
Japanese automaker Mazda North America has expanded its remanufacturing and technical center in Chesterfield Co., Va., which is part of the Richmond metro. The expansion comes three years after the company opened a rotary engine remanufacturing plant in Chesterfield. Mazda opened the plant in 2008 to rebuild rotary engines for its RX-8 sports coupe. In 2010, the automaker remanufactured over 5,000 engines. The new expansion enables Mazda to remanufacture automatic transmissions at the facility. The company has added 21 new jobs.
next