Southern Auto Corridor News

Courtesy of www.SouthernAutoCorridor.com

QUIZ

(Fill in the blank) It has been estimated that by 2010 there will be ___ gas-electric hybrid vehicle nameplates for sale in the U.S. (a) 12 (b) 50 (c) 16 (d) 25

(Scroll down for answer)

ALABAMA

Will Honda Again Expand Alabama Plant?

Honda Chief Exec Takeo Fukui said in the winter quarter he would like to see even more capacity come from the automaker's Alabama plant. The plant just opened its new, $600 million second production line, which will enable the plant to produce 300,000 units a year. Honda's facility sits on a 1,400 acre site in Lincoln, Ala. There's no question there's enough land available at the site for a third production line, however, Fukui did not confirm the company is about to build a third line. In the summer of 2004, Honda officials did admit that they were not in a site search mode for a new U.S. assembly plant. Put the two together and what do you get? A third line at the Alabama Honda plant in the near future.

Good Year for Alabama in the Supplier Sector

Alabama has received plenty of worldwide exposure for successfully landing four foreign-owned automotive original equipment manufacturers since 1993. In fact, Mercedes-Benz, Honda, Toyota and Hyundai have invested about $5.4 billion in plants and equipment in the state over the last dozen years. Yet, suppliers to those four automakers are beginning to take notice as approximately $828 million was invested by part suppliers in Alabama in calendar year 2004. In addition, nearly 4,000 new jobs were created by those parts suppliers in 2004.

Auburn to Offer Automotive Program

The Auburn University Department of Industrial and Systems Engineering is partnering with the Department of Mechanical and Materials Engineering to launch the Manufacturing Engineers for the Automotive Sector (MEAS) program. The new program received a grant from the National Science foundation to foster automotive education at Auburn. MEAS will provide an undergraduate minor in automotive manufacturing systems engineering.

Honda Hits 1,000 Vehicle Threshold

The Honda assembly plant in Lincoln, Ala., reached a milestone in late January when it produced 1,000 vehicles in one day. Honda officials announced on January 26, 2005, their two assembly lines at the $1.2 billion plant produced 1,017 Odyssey minivans and Pilot SUVs. Honda's Line 2, which began operating two shifts on Jan. 8, produces both models. Once Line 2 is at full production, which is expected by the end of this year, more than 1,300 vehicles will be made at the Lincoln assembly plant, or a yearly average of 300,000.

Ogihara Leases Warehouse Space

Ogihara America, which supplies several automakers including Mercedes-Benz in Alabama, has leased 70,000 square feet of space in Birmingham. Ogihara supplies stamped body panels to Mercedes.

Two Companies Form Venture in Montgomery

Swiss-based freight transporter Panalpina World Transport and Huntsville-based J.I.T. Services LLC, have opened a new facility in Montgomery. The two companies will provide warehousing, sequencing, logistics and transport for the automotive industry. About 30 jobs are expected to be created.

Exco Technologies Adding Jobs in Huntsville

Exco Technologies, a Canadian automotive parts supplier, is moving jobs to its Huntsville Neocon USA plant as a result of the falling dollar. The 25 new workers moving to Huntsville will produce storage systems used by automakers in minivans and sport utility vehicles. The storage systems offer more cargo room under seats and in the rear compartments.

Hyundai Named Top Start-Up of the Year

Industrial Info has named Korean automaker Hyundai as the top start-up in the U.S. for the 2004 year. Interestingly enough, Hyundai will not officially "start up" until the fall of 2005 and its announcement to build a plant in Alabama occurred in 2002. Regardless, Hyundai, with a $1 billion initial investment, would be the top start up in the U.S. in years 2002 through 2004 if the criteria used are based on investment.

Hyundai Raises Alabama Plant Production Forecast

South Korea-based Hyundai has raised its forecast for production at its new plant in Montgomery, Ala., from 93,000 vehicles this year to 150,000. As of March 1, no vehicles intended for sale have been produced at the Montgomery facility, however many test models have already been run through the line at the new plant. Hyundai and its sister company, Kia, have targeted 2010 to become the world's fifth-largest vehicle maker by producing 3 million vehicles in South Korea and 2 million vehicles in the U.S. and elsewhere.

Editorial

Domestic Suppliers Lining Up, Negotiating

There have been written reports this week (first week of March) that indicate Toyota may tap Ontario, Canada for its seventh North American assembly plant. At the same time, the reports stated Toyota might have already begun its search for a site for an eighth N.A. factory. We can say with confidence at least one of those plants will land in the Southern Automotive Corridor.

Rumors are also flying that as many as three other automakers are looking to build plants in the U.S. All of those rumors, however, center on the Southern Auto Corridor as the likely place for those deals, not Canada or the Midwest. And all of those rumored automakers are foreign automakers.

Also centering like a laser on the Southern Auto Corridor are suppliers who lived on domestic automakers in Detroit for decades, but are now in trouble. Visteon was given a $120 million "upfront" payment by Ford in mid-March for work it hadn't even done for the automaker. Ford didn't give Visteon an upfront payment of $120 million because the two CEOs of the companies are friends. Visteon officials successfully negotiated that deal because they needed the money.

Other notable parts suppliers are doing everything they can to survive as well. Many of those have lived off the "Big Three" almost exclusively. Part of that survival is to tap into potential contracts in the South. We talked to an executive in the winter quarter who works for a large, domestic supplier. The company recently announced a new facility in the South. We asked him why he had chosen the South for the company's newest facility (I know, it's a stupid question). His response was, "it's the only place in the country where we can find new business."

I would guess that about 70 percent of the new automotive parts supplier locations announced in the South since 2000 were announced by foreign-owned suppliers. There have been at least 200 significant ones since 2000. Those foreign suppliers weren't a surprise to economic development officials practicing in the South. They were expected and are part of the big picture painted by Honda, BMW, Mercedes, Toyota, Nissan and Hyundai, among others, in the South.

But what's probably an unexpected event is the large number of suppliers based in "Detroit" who are trying to establish a larger presence in the Southern Auto Corridor right now. In fact, they are lining up to get a piece of the automotive action that is so strong.

It's kind of ironic that what built the Southern Auto Corridor over the last 20 years -- foreign automakers -- may be exactly what domestic parts suppliers need in the short term to survive. Our question is, if domestic suppliers are looking to the Southern Auto Corridor to survive, will domestic automakers follow them?

Mike Randle
mike@sb-d.com

GEORGIA

Pirelli Announces Distribution Center in Georgia

Pirelli Tire NA, which relocated its U.S. headquarters to Rome, Ga., in 2002, announced in December it will open a distribution center just south of Atlanta in McDonough, Ga. The 247,000-square-foot center will be capable of handling 2,000 containers of Pirelli tires most of which are being made in factories located offshore. The tires will be shipped through the port in Savannah. The $8 million investment is expected to create about 40 jobs.

F&P Georgia Announces Expansion in Rome

F&P Georgia Manufacturing Inc., announced a 62,000-square-foot stamping plant expansion which will create an additional 25 associate positions at the Rome, Ga., manufacturing facility. The Rome Floyd Development Authority granted a request for a $9 million industrial revenue bond and an $11 million payment in lieu of tax plan. F&P Georgia is a leading supplier of sub frame and suspension components for the automotive market. Established in October of 2000, F&P's principal customers are Honda Manufacturing of Alabama and Nissan North America. The company currently operates from a 145,000-square-foot facility in the Floyd County Industrial Park where it employs 207 workers.

KANSAS

Delphi Closes Olathe Plant

Delphi Corp., has closed its 50-year-old auto battery plant in Olathe, Kan. The plant only had 150 employees when it closed in February. That number was down from 300 a year ago. Battery production will be shifted to Delphi plants in Fitzgerald, Ga. and New Jersey.

KENTUCKY

Kentucky Ford Plant may Lose Big SUV Production

Two of Ford's largest SUVs, the Excursion and Aviator, may be phased out models in the near future. Both vehicles are assembled at the Kentucky Truck Plant in Louisville. Sales of both the Excursion and Aviator have dropped dramatically this year. If Ford were to eliminate those two models, the biggest of the big SUVs available, it could pave the way for increased production of the equally massive Ford Super Duty F-Series truck, which remains one of the best selling vehicles in the Ford truck line.

ZF Group Moves HQ; Plants not Affected

Parts supplier ZF Group is relocating its headquarters to Detroit from Florence, Ky. The relocation will mean the loss of about 60 jobs in Northern Kentucky, however, three manufacturing plants in Kentucky are not affected by the move.

MISSISSIPPI

Promax Opening Logistics Center

Cincinnati-based Promax Automotive has opened a 200,000-square-foot logistics center near Nissan's assembly plant in Canton, Miss. The company is offering warehousing, repair assembly, sequencing and inspection at the new facility that houses 100 employees. The company will include parts packaging and distribution at the site later in 2005. Overall, the facility is designed to meet new "strike zone" requirements that Nissan plans to implement at its plant in Canton. The strike zone system is a sequencing strategy that improves supplier efficiency. Promax has other facilities in Ohio, California and Indiana and has port operations in Maryland, Michigan, Florida, California and Oklahoma.

MISSOURI

Missouri's Rapid Response Team to Help 900 Ford Workers

About 900 workers lost their jobs at the Ford Motor Co.'s St. Louis Assembly plant when the second shift was nuked in February. The Missouri Rapid Response Team will provide assistance in the form of training and reemployment services free of charge through the Missouri Career Center. Services include assessment and testing, career counseling, resume writing, interviewing training and skills, on-the-job training, and tuition assistance for additional vocational training or education.

NORTH CAROLINA

Metal Fabricator Locating in Rocky Mount

New Standard Corp., a metal fabrication and stamping manufacturer is expanding into the former 117,000-square-foot Fountaine Fifth Wheel building in Rocky Mount, N.C. The company is investing $10 million and creating about 200 jobs over a three-year period. New Standard's products are used in major appliances, heating and cooling, truck and bus manufacturing and in auto parts.

Transportation Systems Hiring 90

Transportation Systems Solutions LLC, a new company that will manufacture composite panels, is investing $1.65 million to open a plant in High Point. About 90 jobs are being created. The company uses new technology to produce stronger panels for truck bodies.

SOUTH CAROLINA

Benteler Automotive to Build Facility in Spartanburg

Auburn Hills, Mich.-based Benteler Automotive announced in late February it has chosen Spartanburg, S.C., for a new automotive manufacturing and assembly facility. Benteler is the largest family-owned independent parts supplier in the world. The company plans to build a new 190,000-square-foot plant that will house about 115 workers initially. The company supplies parts and assemblies such as chassis and exhaust systems to the BMW plant, located in Greer, S.C., among other automakers.

German Company Selects Kershaw County

Hengst GmbH & Co. KG, a family-owned enterprise headquartered in Munster, Germany, announced in the winter the selection of Kershaw County for its first manufacturing facility in North America. The company plans to invest $12 million and create 60 new jobs over the next five years. Hengst GmbH purchases a 78,000-square-foot facility in the Steeplechase Industrial Park, located off of Interstate 20. The company is a manufacturer of filters and filter systems for the automotive and engine industries.

SPP Locating Assembly Operation in Dorchester County

Summerville Preferred Partners, a Virginia-based component assembly company for the truck and heavy equipment manufacturing industry, announced a new facility near Charleston, S.C. in Dorchester County. SSP serves several truck and heavy equipment manufacturers including Mack Truck and International Truck and Engine Corp. The Dorchester facility will assemble fire truck chassis for North Charleston's American LaFrance, a subsidiary of Freightliner. SSP is investing over $2 million in the deal and will employ about 100 workers.

TENNESSEE

Glass Supplier Visteon Announces Distribution Center in Tennessee

Visteon Corp. has leased a building in Lebanon, Tenn., located just east of Nashville, for a 456,000-square-foot distribution center for its automotive glass operations. The Michigan-based parts supplier is consolidating several operations located in the Midwest to the new facility in Wilson County. The company is also considering moving a glass manufacturing facility to Tennessee in the near future.

Cookeville Lands Deal

MP Components, a Grand Rapids, Mich.-based supplier to the automotive industry, has announced it is locating in Cookeville, Tenn. The company manufactures checking fixtures, complex automated gauges, models, aluminum tooling and various molds. About 50 jobs are expected to be created.

TEXAS

Eighteen Suppliers Announced for Toyota's San Antonio Plant

In an unprecedented development, Toyota Motor Manufacturing President T.J. Tajima and Texas Gov. Rick Perry announced in mid-December that 18 parts suppliers will locate on the site of the new Toyota pickup truck factory being built in San Antonio. Never before in the South's auto assembly plant history have as many as 18 suppliers built facilities on the site of an assembly plant. Tajima said, "The advantages of locating these suppliers on site include holding down logistics costs, as well as the ability to work closely with Toyota in assuring quality." The 18 suppliers are expected to employ about 1,500 workers with a total investment of around $150 million. That's in addition to the 2,000 workers the plant itself will eventually house. The total list of suppliers includes:

* AGC Automotive - glass assembly

* ARK Inc. - industrial waste management and recycling

* Avanzar Interior Technologies/SAT Auto Technologies/Johnson Controls - seats and interior parts

* Curtis-Maruyasu America - tubing

* Futaba Industrial Texas - stamped products

* Green Metals Inc. - scrap steel recycling

* HERO Assemblers/Valiente International/Toyota Tshusho - tire and wheel assembly and logistics

* Metalsa - truck frames

* Millennium Steel/Henry Jackson - steel processing

* PPG Industries - glass assembly

* Reyes-Amtex - interior parts

* Takumi Stamping - stamped parts

* Tenneco Automotive - exhaust systems

* Toyoda-Gosei Texas - interior and exterior parts

* Toyotetsu Texas - stamped parts

* Vutex Inc./Operational Technologies/Vuteq - assembly service

San Antonio Plant Could Add Hybrid Assembly

The only vehicle announced by Toyota that's to be assembled at the Japanese automaker's new plant being built in San Antonio is the Tundra pickup truck. In today's auto assembly world, one vehicle built at a single plant won't cut it. Fellow Japanese automaker Nissan opened its newest plant in 2003 and already five different vehicles are coming out of that factory. Then again, Mercedes-Benz only made one vehicle, the M-Class, at its plant in Vance, Ala. from 1997 to 2004. Last year that plant added production of a wagon-SUV-type vehicle, the R-Class. There's also rumors the Mercedes G-Class, a competitor to the Hummer, could be built at the Alabama plant.

Toyota went to Texas to sell Tundra pickups to Texans. But Texans like real big things and the Tundra is not a real big truck. Could a larger version of the Tundra be in the works for the San Antonio plant? Or would the Tundra remain the same as it is and a larger truck model announced soon in San Antonio?

What many people think will happen is that the San Antonio Toyota plant may be readying itself to build a large, gas-electric hybrid truck of some kind. Last year in Detroit, Toyota unveiled a hybrid truck prototype they called the FTX. The company is already seeing strong interest in its Highlander and Lexus RX400h hybrid SUVs.

Texas GM Plant Dark for Two Weeks in March

General Motors' Arlington, Tex., plant was scheduled to shut down for two weeks in January and one week in March. The automaker instead added another week of down time at the plant in March.

Volvo Trucks Picks Dallas for Parts Distribution Center

Volvo Trucks NA is moving into a 63,000-square-foot expandable building in Dallas to establish a new parts center. The center will be able to provide parts to truckers' overnight if need be. Volvo currently operates truck parts centers in Memphis, Reno, Columbus, Ohio, Joliet, Ill, and Toronto.

WEST VIRGINIA

Italian Auto Parts Manufacturer Celebrates Opening

Allevard Springs and West Virginia officials celebrated the company's grand opening in the Pritchard Industrial Park in the winter quarter. Allevard Springs, which produces automotive suspension parts for Ford, expects that 80 workers will be hired for the Wayne County facility and that by 2006 up to 130 workers will be housed at the facility. Allevard Springs is investing $27 million in the new project.

QUIZ ANSWER

A recent Automotive News story estimated that there will be 50 gas-electric hybrid vehicles for sale in the U.S. by 2010.