Fall 2003

Toyota Officials Back in Marion, Ark.

SB&D has learned that representatives of Japanese automaker Toyota were back in Marion, Ark. to look at the site that placed second in the company's site search for a pickup truck plant that landed in San Antonio. The visit occurred the week of Nov. 3-7. The visit by Toyota certainly doesn't mean an announcement is forthcoming, however, this magazine predicted in the winter of 2002/2003 edition that Toyota would choose both San Antonio (first) and Marion (second) for assembly plants, all within a three-year time frame. Rumors are also swirling that two other automakers, one from Germany and the other from Japan, looked at the Marion site in the fall 2003 quarter. Arkansas officials have placed a billboard near the Marion site with a headline that reads "First come, first served."

Auto Industry Nation's Largest

A recent report titled "Contribution of the Automotive Industry to the U.S. Economy," prepared by the Center for Automotive Research, a Michigan-based research firm, claims that the automotive industry is the nation's largest manufacturing industry sector. The report found that in 2002, 13.3 million people in the U.S. were directly employed by the automotive industry, a figure that is No. 1 among all individual manufacturing sectors. Also, payroll in the automotive industry in 2002 totaled $240 billion (that's with a "b").

Is Boeing Getting into Automotive?

The Boeing Co., which happens to be in a highly publicized search for a site to manufacture its newest jetliner, has hinted recently that it may use its technology in the automotive arena. The company signed an agreement with Centro Ricerche Fiat, an automotive R&D company based in Italy, in the fall quarter to evaluate its Intellibus Network Systems. Boeing's INS technology has the potential to reduce the amount of wiring and connections currently found in automobiles, while at the same time improving efficiency and performance.

Editorial

Did He Really Say That?

A recent article published by the Atlanta Journal-Constitution focused on what will be done with the 1,500-acre Pooler, Ga. site that was to be developed by DaimlerChrysler. DC decided against building a 3,000-employee Sprinter van plant on the site in September. Georgia Gov. Sonny Perdue was quoted as saying he would prefer to preserve the site for the next auto assembly plant that comes down the pike. Perdue is right to do so. The site features $60 million in improvements and is located at the junction of I-95 and I-16. It happens to be one of two very attractive sites for auto assembly in the South. The other site is in Marion, Ark.

But in the article, Jim Hossack, a senior consultant with Auto-Pacific, Inc., an automotive industry research firm based in California with offices in Michigan, said that landing an automotive assembly plant is a "high risk" venture. He cited DC's back down and the current overcapacity in the industry. His tone in the article indicated that states in the South should reconsider the recruitment of automotive assembly plants. Maybe Mr. Hossack should take a tour of more than three-dozen markets in Alabama where the automotive industry has virtually transformed their economies in just 10 short years.

The landing of an automotive assembly plant remains the crown jewel of economic development recruitment in the South. No industry at any time in the South's economic history has had such a positive effect than the automotive industry over the last 20 years. To suggest that states in the South be wary of the automotive industry and auto plants in particular is simply one of the most ludicrous statements we've heard all year. Just this year, over 85 significant (100 jobs or more) new and expanded automotive plants have been announced in the South and only four have closed. No single industry has announced that many plants in one year in the South over the last dozen years. That being the case, states in the South must do everything they can to court automotive, especially the biggest deal of them all, automotive assembly.

Lee Burlett (lee@sb-d.com)

Celebration in Alabama, Disappointment in Georgia

Talk about a tale of two states. DaimlerChrysler informed Georgia officials on September 23 it would not build its Sprinter Van plant near Savannah. Exactly one week later, DaimlerChrysler and Alabama officials celebrated the automaker's 10th anniversary in the state and a $600 million expansion of its plant located between Birmingham and Tuscaloosa. While it's clear there is no connection between the two, it was cruel timing for officials in Georgia. Mercedes announced on September 30, 1993 it would build its first U.S. plant in Vance, Ala. Alabama offered $253 million to lure Mercedes. The state was highly criticized for the incentive package, yet since Mercedes announced, Alabama has landed two other assembly plants and numerous other major automotive projects. Currently, $1.4 billion in annual payroll is paid by the automotive industry in Alabama. Over 30,000 jobs have been created in the sector since 1993 and that figure is expected to increase to 40,000 within three years.

Alabama

New ArvinMeritor Facility to House 100

ArvinMeritor, a supplier to Hyundai Motor Co.'s $1 billion factory under construction in Montgomery, says its new door fabrication plant near the Korean automaker's facility will employ 100 people. The 44,000-square-foot plant will produce one million door modules for Sonata sedans and Sante Fe sport utility vehicles that will be assembled at Hyundai's plant. The new plant is the Troy, Mich.-based company's second in the state. It will manufacture exhaust systems for Hyundai at a $10 million, 100,000-square-foot facility in Fort Deposit, Ala. under a joint venture with Korea's Sejong Industrial Co.

Alabama Looking at Hyundai Construction Workers' Home States

Officials with the state of Alabama are looking into reports that too many out-of-state workers are helping build Hyundai's auto assembly plant south of Montgomery. The investigation was prompted by an Alabama newspaper report that of all construction worker automobiles parked in the construction lot on a day in November, about 40 percent had out-of-state license plates. Agreements were made with Hyundai and the state to use a certain amount of Alabama-based labor in the construction of the massive plant.

Goodyear Closing in Huntsville

The 1,300-employee Goodyear plant is closing in Huntsville, Ala. The plant, which makes Dunlop brand products, is being closed as Goodyear reduces capacity in the U.S. The company expects to save about $100 million from the closure.

Canadian Supplier Building in Gadsden, Ala.

Ontario-based NARMCO Group is building a $15 million, 70,000-square-foot automotive parts plant at the Gadsden Airport Industrial Park. The factory will house 80 workers when production begins. NARMCO was founded in 1944 and makes large metal stampings and complex assemblies for original equipment manufacturers in North America. The plant represents the first large-scale production facility for the company in the Southern Auto Corridor.

Mercedes May Assembly New SUV in Alabama

Automotive News reported in mid-October that the Mercedes-Benz plant in Vance, Ala. may produce the G-Class Gelaendewagen, a high-end SUV now being built in Germany. The G-Wagen was first built in 1979 as a military vehicle for the Shah of Iran and is popular for similar uses in other countries. It can be compared favorably with the popular Hummer. The G-Class is built on a different platform than the M-Class, which has been assembled at the Vance-based plant since 1995 and the new R-Class, which will be built at the Alabama facility. Yet, a new variation of the G-Class could be designed and built at Mercedes' Alabama facility. The Mercedes plant in Vance, Ala. is undergoing a $600 million expansion that will add 2,000 workers and double production sometime in late 2004. The GST, or R-Class, is being added to the line. That vehicle is a variation of an SUV and a station wagon.

Mercedes Supplier Building in Birmingham

Toronto-based supplier Decoma International is leasing 120,000 square feet of space in a 300,000-square-foot building being built by Birmingham-based Graham & Company. The location is the Jefferson Metropolitan Park (JeffMet), located southwest of the city of Birmingham. Decoma will produce plastic exterior parts for the next generation Mercedes M-Class and the new Grand Sports Tourer, or GST. The Vance, Ala. Mercedes assembly plant is undergoing a $600 million expansion that will double employment to 4,000. Oxford Automotive and Plastech, two other suppliers, are currently building their facilities in JeffMet. Decoma International is part of the Magna International group that produces auto parts for various automakers in North America, Europe, and Asia.

Mercedes Tier One Breaks Ground in Tuscaloosa

Eberspacher, the latest Tier One Mercedes supplier to choose Tuscaloosa has broken ground on a 39,000-square-foot facility. The company will make exhaust systems for the newly redesigned M-Class SUV and the new Mercedes Grand Sport Tourer. Both vehicles will be assembled at the expanding Mercedes-Benz facility in Vance, Ala. The company expects to employ 56 workers.

No Union Organization for Mercedes Plant

The recent United Automobile Workers union's quest to organize the expanding Mercedes plant in Vance, Ala. was dealt a blow in early October when DaimlerChrysler officials took a neutral stance on the matter. UAW officials had lobbied DaimlerChrysler's administration hard to allow card checks as opposed to plant-based secret ballots in an effort to unionize the Mercedes division of DaimlerChrysler A.G., the Stuttgart, Germany-based company that is the parent of both Chrysler and Mercedes. Specifically, though, UAW officials targeted the Vance Mercedes facility. Secret ballot voting for unionization has occurred at other foreign-owned automotive plants in the South, most recently with Nissan in Smyrna, Tenn., without any success. In fact, the UAW union has never organized a foreign-owned automotive plant in the United States, much less the South, where right-to-work laws are paramount.

In the summer of 2003, Nate Gooden, the UAW's chief negotiator with DaimlerChrysler said in a New York Times article that "Vance, Ala., will be a UAW organized plant in the very near future." Apparently that isn't going to be the case. Alabama Gov. Bob Riley was adamant about the UAW's desire to fill many of the 2,000 new jobs being created at the expanding Vance-based Mercedes facility. A spokesperson for Riley said that incentives given to Mercedes to expand its employment at the plant from 2,000 to 4,000 weren't given out so that the UAW could fill the positions with laid off workers from Michigan. Riley demanded that those jobs be filled by Alabamians.

Brose Building in Vance, Ala.

Brose, a future supplier of door components to the Mercedes-Benz factory, is building a $13 million plant in Vance. The plant will employ 80 workers and is expected to open next spring in the new Legacy Industrial Park.

Dongwon Metal Breaks Ground in Alabama

South Korea's Dongwon Metal Industrial Co. broke ground on a $15 million plant in Crenshaw County, Ala. in the fall quarter. The company will stamp out door frames and side impact bars for vehicles produced at Hyundai Motor Co.'s $1 billion Montgomery, Ala. assembly plant that is about half finished. The company will employ 100 when production begins.

QUIZ

Where are Dodge Ram pickup trucks assembled in the American South? (a) St. Louis (b) Louisville (c) Atlanta or (d) Shreveport?

(Scroll down for answer)

Arkansas

Arkansas Lands Second Major Supplier This Year

Before Toyota put Arkansas on its site search map last year, the automotive industry did not exist for the most part in the Razorback State. But since Toyota chose San Antonio over Marion, Ark. for a pickup truck plant, the state has begun to create some momentum in the auto sector. Following a major supplier announcement by Dana Corp. in Osceola, Ark. earlier this year, Sakae Riken Kogyo Co., a Japanese supplier, announced a $15 million, 250-employee plant in Wynne. Wynne, Ark. is located about an hour northwest of Memphis.

Florida

Automotive Deal in Orlando

Detroit-based Trans Logic Auto Carriers, a holding company for Chrysler Corp., has leased 23 acres in the Taft-Vineland area near Orlando International Airport. The company transports and stores automobiles for Chrysler nationwide.

Georgia

Georgia GM Plant to Build New Vans

General Motor's Doraville, Ga. assembly facility is adding four new minivans to its assembly lines for 2005. The Pontiac Montana SV6, Buick Terrazza, Chevy Uplander and Saturn Relay will all be made at the Georgia plant, which is located near Atlanta. The Saturn and Buick models are first-time minivans for those two GM divisions.

Georgia Changes Direction on Buying Potential Ford Site

After agreeing to do so, economic development officials in Georgia have decided against buying nearly 1,500 acres of land in Morgan County for a new Ford Motor Co. plant that would have replaced the company's aging facility in Hapeville. For two years Ford officials have been site searching in Georgia for a site to build a new plant to replace the one it operates near Atlanta. The decision not to purchase the land indicates that Ford has chosen not to replace the Hapeville plant just yet.

Hapeville, Ga. Ford Plant to Build Sport Wagons

Mixed rumors surround Ford's 56-year-old, 2,300-employee assembly facility located near Atlanta. Earlier this year speculation centered on Ford closing the plant in the near future and building a new one further outside the Atlanta MSA. While that rumor swirled, Ford officials maintained there were no plans to close the old Hapeville facility. Over the summer, rumors surfaced that a new assembly plant would not be built in Georgia but rather in Mexico. Also during the summer, automotive industry analysts claimed there's no way, considering Ford's capacity problems, there will be two Ford plants operating in Georgia. Regardless, the Hapeville facility will phase out production of the Ford Taurus and Mercury Sable, two hot cars in the 1990s but no longer so. Instead, Ford officials have confirmed the Hapeville plant will build sport wagons under the Ford and Lincoln name plate beginning in 2006.

Kentucky

Toyota Expands Kentucky Facility

Toyota's Erlanger, Ky. research and development facility is expanding. The Japanese automaker is adding about 100,000 square feet and 75 new jobs at its R&D center in Northern Kentucky. The expansion should be completed by summer of 2004.

Roof Systems Supplier Opens Plant in Bowling Green

CTS Car Top Systems, a subsidiary of CTS Fahrzeug-Dachsysteme GmbH of Germany has opened a 36,000-square-foot plant that will supply retractable roof systems for GM's new Cadillac XLR as well as the new 2004 Corvette. Both vehicles are being assembled at GM's Corvette plant in Bowling Green. The new facility houses 75 workers.

Waltex Announces Second Plant in Kentucky

Bowling Green is the site of Waltex's second plant in Kentucky. Waltex makes welding equipment for the automotive industry. The company is taking a 20,000-square-foot building in the South Central Kentucky Industrial Park and is expected to hire 35 workers at an average wage of nearly $40,000 a year. Waltex is a division of Japan-based Toyo Denyo and has operated a facility in Walton, Ky. since 1993.

Louisiana

GM Officially Dedicates New Shreveport Plant

Three years ago GM announced a $500 million retooling of its Shreveport, La. assembly facility in order to build the new Chevrolet Colorado and GMC Canyon pickup trucks. The new facility was officially dedicated in mid-October. The Michigan-based automaker employs over 2,500 at the northwest Louisiana assembly plant.

A.G. Simpson Locates in Shreveport

A.G. Simpson, a supplier of parts to the newly expanded Shreveport GM pickup truck plant, is investing $2 million in an existing 80,000-square-foot in Shreveport. A.G. Simpson provides such parts as rear bumper modules, metal stamping, valve covers, oil pans, control arms and other automotive related items. The new deal will result in 45 new jobs.

Maryland

Volvo Trucks Expanding in Maryland

AB Volvo is expanding its Volvo Power Train plant in Hagerstown. The company makes engines for North Carolina-based Volvo Trucks N.A. and has been producing engines for Mack trucks for more than 40 years. The expansion will include diesel engines produced for both Mack and Volvo trucks.

UAW: Baltimore GM Plant to Close

During the fall quarter, the president of United Auto Workers Local 239 in Baltimore claimed in a report that General Motors will close its old Baltimore assembly plant sometime in 2005. The plant houses just over 1,000 workers who assemble mid-sized vans.

Mississippi

Nissan Begins Full-Size Pickup Truck Production

Nissan began production this fall on its first full-sized pickup truck, the Titan at the automaker's $1.43 billion manufacturing facility in Canton, Miss. The launch of the Titan is the third of five models to be produced at the new plant. In May, production of the Quest minivan began and in August Pathfinders were first assembled at the plant. The Canton factory will have the capacity to produce a total of 400,000 vehicles each year when fully operational. At that time, the plant will total 3.5 million square feet and house 5,300 workers.

Nissan Supplier Doubles Size of Tupelo Area Plant

ThyssenKrupp Fabco, a supplier to the Nissan assembly plant in Canton, is doubling its facility in Shannon, Miss. The expansion will bring the parts maker's facility to over 100,000 square feet. The supplier expects to add 80 jobs in the expansion.

Missouri

Ford to Build Hybrid SUV in Kansas City

Ford will build a hybrid version of the Ford Escape at its Kansas City area assembly plant in Claycomo, Mo. The Escape will be the auto industry's first SUV that operates on both gasoline and electric power. Production is expected to begin in the summer of 2004. The announcement follows a decision by Ford to keep its St. Louis assembly plant open for now. The automaker previously announced the St. Louis plant was headed for closure. Ford's Claycomo, Mo. plant employs nearly 6,000 workers with an annual payroll of more than $400 million. The Ford F-150 pickup truck and two SUV models, the Tribute and Escape, are made at the plant.

North Carolina

Truck Parts Supplier Expanding in Statesville

Tube Specialties, a maker of metal tube components used in the production of Freightliner trucks, is adding 100,000 square feet to its facilities in Statesville, N.C. The expansion doubles the size of the company's plant in Statesville. The project is estimated to cost $4 million.

Japanese Supplier Opens Plant in North Carolina

NT Techno USA, a Japanese-owned company that manufactures automotive transmission parts, officially opened its new $21 million, 63,000-square-foot production facility in Oxford, N.C. in October. The Oxford plant, located in Granville County, is NT Techno's first venture in the U.S. The company will supply transmission parts to AW North Carolina in Durham, which manufactures and distributes fully assembled automatic transmissions for Toyota Motor Manufacturing North America. Also in October, AW NC dedicated its new expansion in Durham that will provide 450 new jobs.

Oklahoma

Michelin Completes Expansion in Ardmore

Two separate additions totaling 64,000 square feet have been completed to house new and renovated equipment as well as an additional 45 new employees at Michelin's tire plant in Ardmore, Okla. The project is part of a $200 million capital improvement program that will make the Ardmore non-union plant one of the most flexible and largest in the Michelin family.

South Carolina

Auto Park Being Developed in South Carolina

Clemson University announced this fall it is developing an automotive research park in Greenville. The park, called the International Center for Automotive Research, will merge higher-learning research capabilities with the private automotive sector. Clemson officials said the park will include a graduate school of auto engineering. The new park will be located on 400 acres that front Interstate 85 in southern Greenville County.

Wheel Assembly Manufacturer Locating in Florence

North American Assemblies LLC, has announced that the company is locating a new manufacturing operation in Florence County. The company will produce tire and wheel assemblies for all-terrain vehicles under contract with Honda of South Carolina.

Auto Supplier Expands in S.C.

Yutaka Technologies is adding 70 new employees to its automotive supply plant in Lugoff, S.C. The Japanese company is adding 25,000 square feet to its existing 100,000-square-foot facility. The investment will total over $7 million.

Tennessee

Auto Supplier Expands in Tennessee

For the ninth time in 13 years, DeWayne's Quality Metal Coatings is expanding its Lexington, Tenn. plant. The company produces metal plating for the automotive industry. DeWayne's is adding 27,000 square feet and 50 new jobs in the expansion.

Holley Carburetor Closes in Tennessee

Holley Carburetor is closing its Springfield, Tenn. facility and consolidating jobs there with an existing facility in Bowling Green, Ky. next year. The company's closure of its Tennessee plant will result in the loss of 80 jobs.

Toyoto Breaks Ground in Jackson, Tenn.

Toyota Motor Manufacturing of America broke ground on its Bodine Jackson plant in November in Jackson, Tenn. The plant will open in 2005 when it will produce engine blocks for various Toyota and Lexus products including the Tundra, Corolla, Camry, Avalon and RX330. The facility will produce one million engine blocks annually and house at least 200 employees.

UGN Expands in Jackson, Tenn.

Jackson-based auto supplier UGN, is adding 30,000 square feet to its facility. The supplier to Japanese automakers in the Southern Auto Corridor, produces acoustic, interior trim and thermal management products. The company employs 125 workers in Jackson.

Texas

First Toyota Supplier Announces in Texas

Tasus Corp., an Indiana-based supplier of plastic injection molded products for the automotive industry, has announced it will buy or lease a manufacturing facility near Toyota's plant being built in San Antonio. Company officials maintain that a handful of markets in Central Texas remain in the hunt for the 100,000-square-foot, 150-employee facility including Pflugerville and Georgetown, both suburbs located north of Austin.

Toyota Takes New Approach to Construction Hiring in San Antonio

Toyota officials have instructed building contractors for its new pickup truck plant in southwest San Antonio to hire all qualified workers it can find in the San Antonio 12-country metro area before it looks elsewhere in Texas for labor. The Japanese automaker has also set a goal of 20 percent worth of construction contracts to minority builders. Over 2,000 laborers are expected to help construct the $800 million assembly plant, which will open in 2006. Officials with Toyota want to hire as many workers in San Antonio as possible for the plant's construction. The city of San Antonio and the county where the plant is located, shared equally with the state in the incentive package given to Toyota. Usually, the state provides the lion's share of incentives for projects the size of automotive plants. Giving San Antonio-based workers a better chance at landing jobs on the construction of the plant is a way Toyota is thanking local San Antonio governments.

Toyota Gets Tax Breaks for Suppliers

Now that suppliers are beginning to announce facilities for Toyota's new pickup truck plant in San Antonio, it's a good time to reveal what those suppliers are getting in terms of incentives. Toyota officials asked and got the following from Bexar County for its suppliers:

* If a supplier pays a minimum wage of $8.85 an hour, that company will receive a reduction in property taxes of 80 percent over 10 years.
* If a supplier pays a wage rate of $11.15 a hour or more, that company will receive a full property tax abatement for 10 years.

Other incentives are quickly coming to the table, including empowerment zone, freeport exemptions and foreign trade zone designations for suppliers to the plant.

Toyota Breaks Ground in San Antonio

The ceremonial ground breaking of Toyota's pickup truck plant in South San Antonio took place in October. Dennis Cuneo, senior vice president of Toyota Manufacturing North America was present at the event as was Hidehiko Tajima, who will serve as president of the Texas plant. Cuneo noted that he had never seen such a large crowd at any of the automaker's groundbreakings. Toyota will build Tundra pickups at the new plant.

Virginia

Virginia Motorsports Initiative Launched

Virginia Gov. Mark Warner announced in the fall the launch of the Virginia Motorsports Initiative. The statewide initiative, comprised of public and private sector partners, will promote and support motorsports activities in Virginia as a means for economic development. Gov. Warner noted at the announcement that Virginia has a strong cluster of racing venues and motorsports businesses and the initiative will help recruit additional motorsports companies to the state. Targeted sectors include engine fabricators, design facilities, machine shops and race car teams. The state will provide its traditional incentives to qualifying companies involved in motorsports when they make investments and announce job creation in the state.

QUIZ ANSWER

The answer is (a), St. Louis, or more specifically, Fenton, Mo. Chrysler's St. Louis North Assembly plant manufactures the Dodge Ram, Dodge Caravan and Chrysler Voyager models. The plant is the only Chrysler operates in the American South.