North American Automotive Industry Continues to Deliver
Despite recent challenges, automakers and suppliers continue to exhibit confidence in the United States and Canada by announcing new projects and expansions and employing thousands of skilled workers.
The Traditional Auto Manufacturing Hub
The traditional auto manufacturing states of Illinois, Indiana, Michigan, and Ohio continue to report new activity as follows:
Illinois: According to Dun & Bradstreet, Illinois' auto industry employs over 37,300 people in more than 500 auto-manufacturing establishments, most notably DaimlerChrysler Corp. and Ford Motor Corp. Good news for Ford's assembly plant on Chicago's South Side was the commencement of 2008 production of the Taurus, Taurus X, and the Mercury Sable. The Chrysler Group invested $400 million in its Belvidere assembly plant, which will build - among others - the Dodge Caliber and the Jeep Compass. A new second shift will result in employment of 2,650 people.
Indiana: Three automotive projects were announced In Indiana in 2006: Toyota's partnership with Subaru to build the Toyota Camry in Lafayette, calling for the hiring of 1,120 employees; Honda's construction of a plant to build the Civic sedan in Greensburg, with plans to hire 2,000 in 2008; and Cummins' intention to build its new family of light-duty, clean-diesel engines in Columbus and to hire more than 450 by end of 2008. Also, in 2007, Chrysler announced a joint venture with Getrag, reportedly the world's largest independent transmission manufacturer, in Tipton that will necessitate the hiring of 1,400 people.
Michigan: A state synonymous with "anything auto," Michigan boasts auto-related R&D expenditures averaging $10.7 billion annually and an estimated 65,000 engineering and technical professionals employed statewide. In fact, nine of the world's 10 largest original equipment manufacturers (OEMs) have research, product development, or production facilities located in the state.
Ford Motor Co. is investing in southeastern Michigan plants including a transmission facility in Sterling Heights; the Wayne assembly plant, which is likely to make the next generation of the Focus small car; the Dearborn truck assembly facility, which makes the F-150 pickup and other truck-based vehicles; and the Dearborn and Woodhaven parts-stamping plants. Ford also is considering additional investments to a hybrid-vehicle engineering facility in Dearborn; the Romeo engine plant; a truck plant in Wayne; the Sterling Heights axle plant; and Ford's proving grounds in Macomb County's Bruce Township. The investment will facilitate the retention of about 13,740 jobs. Ford has noted that its investment in Michigan could exceed $1 billion in the next five to seven years.
Toyota Boshoku America, a supplier of interior parts for automakers such as Toyota and General Motors, will expand its Technical Center in Novi to eventually occupy 70,000 square feet in a new building on the Novi Corporate Campus. The company, which currently employs 140, projects that its Michigan work force will grow to over 200 by 2010, with most of the new hires made up of engineers and professional staff.
Ohio: According to the Ohio Department of Development, auto production and support industries comprise 15 percent of the state's private-sector economy. In 2005, 882,000 cars were assembled in Ohio, 12 percent of the national total and second only to Michigan. General Motors - the state's largest auto industry employer - is followed by Honda, Ford, Delphi, and DaimlerChrysler.
In May 2007, General Motors announced a $335 million investment in its Toledo (Lucas County) powertrain facility to add production of six-speed transmissions, as well as a $67.8 million investment in its Defiance (Defiance County) casting facility to expand engine block capacity. The projects will result in the retention of 1,350 jobs in Defiance and 1,600 jobs in Toledo. In March 2007, Ford announced a $200 million investment in the Sharonville transmission plant to retool the plant for flexible manufacturing and advanced powertrain production.
The New Auto Manufacturing Center
Lower costs and incentive packages have lured automotive business to the Southern States.
Alabama: Mercedes-Benz, Honda, and Hyundai assembly plants, served by more than 90 suppliers, are just part of the active auto industry in Alabama that represents 13 percent of the state's manufacturing GDP. According to the Alabama Development Office, the state ranks sixth in U.S. car and light truck production.
New projects this year include a $270 million expansion in Montgomery County for Hyundai Motor Manufacturing Alabama, which assembles four-cylinder engines for the Hyundai and Kia plants; Alabama Cullman Yutaka Technologies' creation of 200 new jobs for the production of exhaust systems and catalytic converters; as well as investments by TWB Company in Autauga County, specializing in laser welding of body parts; KTNA in Jackson County, making interior components; and Seohan Auto USA/Seohan Driveshaft USA, manufacturer of front and rear axles in Lee County.
Georgia: A century has passed since Georgia started its automotive industry engines. In 2006, the Peach State landed Kia Motors Corp.'s first U.S. manufacturing facility, a $1.2 billion investment that will create approximately 2,800 jobs as well as an additional 2,600 supplier jobs. The new assembly plant is scheduled to begin testing operations by May 2008 and will reach full production by 2009.
Georgia is home to nearly 300 parts manufacturers and suppliers and eight automotive company headquarters. More than 50 companies have sited their North American headquarters in Atlanta, including Saab, Porsche, Hella, and Daewoo. Moreover, 83 percent of all U.S. auto assembly plants are within 13 highway hours of Georgia. Besides Georgia's interstates and rail network, and its cargo capabilities at the Hartsfield-Jackson Atlanta International Airport, the state-of-the-art deepwater ports in Savannah and Brunswick are the fifth largest in the country and serve as the South Atlantic's premier auto-processing facilities
Kentucky: Kentucky's automotive facilities run the gamut of vehicles, including passenger cars such as the Toyota Camry, built in Georgetown; pickup trucks, such as Ford's heavy-duty F-series and SUV Explorer, made in Louisville; and premium sports cars, exemplified by the Chevrolet Corvette, manufactured in Bowling Green.
Kentucky ranks third in the total production of cars and light trucks. A new $105 million investment in Ford's Louisville truck plant - that will implement equipment, technology, and facility upgrades - was facilitated by the Kentucky Jobs Retention Act, a new incentive program resulting from House Bill 536, which was adopted by the 2007 General Assembly and signed into law by Governor Ernie Fletcher on March 23 to encourage existing automotive manufacturers to modernize their facilities and retain existing jobs.
Louisiana: Rail and interstate access are key incentives for automakers in Louisiana, offered at sites such as the Franklin Farms in Northeast Louisiana between GM's assembly plant and a Nissan factory in Mississippi. Located along Interstate 20, the state-owned 1,440-acre site is less than 50 miles from the Port of Lake Providence on the Mississippi River. The Franklin Farms site is within 125 miles of more than100 auto suppliers and touts an abundant labor supply.
The 1,500-acre Zachary Taylor site, located off Interstate 55 on Louisiana's North Shore - near New Orleans, Baton Rouge, and the Mississippi Gulf Coast - offers direct access to deepwater ports via rail or interstate and is within a 60- to 90-minute drive of commercial airports in Mississippi and Louisiana.
Louisiana is also home to a General Motors auto assembly plant in Shreveport that has recently invested more than $1.24 billion to produce two new lines of trucks and its Hummer 3 (H3).
Mississippi: The good news in Mississippi auto development revolves around Toyota's new $1.3 billion manufacturing plant in Blue Springs near Tupelo that will employ 2,000 people to build 150,000 Highlander crossover utility vehicles annually when it opens in 2010.
And, in July 2007, Mississippi's Governor Haley Barbour announced that Toyota Auto Body Co., Ltd. (TAB) would build a $180 million plant in North Mississippi, becoming the first announced supplier to the new Blue Springs endeavor. The facility, which is to be located in an industrial park at Baldwyn, will employ about 260 workers and will begin production by 2010 to coincide with the startup of the Toyota plant. The plant, dubbed Auto Parts Manufacturing Mississippi Inc., will provide Toyota with stamped parts, body weld parts, and plastic parts.
Then, in August 2007, Toyota Boshoku America announced it would construct an $80 million, 500-worker plant in Itawamba County to supply seats, door panels, and carpet to Toyota Motor Manufacturing Mississippi.
North Carolina: North Carolina has more than 1,000 manufacturing operations that supply parts, accessories, and components for the automotive, truck, bus, and heavy-equipment industries. In 2006, the state created and funded the Advanced Vehicle Research Center in Garysburg, a modern automotive testing facility for design, development, testing, and certification of advanced vehicle technologies, sub-systems, and other components.
The military has an $18 billion impact on North Carolina's economy. For example, Force Protection Inc., a South Carolina company that produces mine- and blast-protected vehicles for the armed forces, will open a manufacturing facility in Person County.
South Carolina: Since 2006, the South Carolina Department of Commerce has recruited over $660 million in capital investment connected to the automotive industry and created more than 2,000 jobs. In Greer, BMW completed upgrades for future innovation with the rollout of new models earlier this year. The one-millionth vehicle was also completed at the Greer production facility, which established its corporate headquarters in South Carolina in 1992. And DaimlerChrysler officially launched the production of the Sprinter van in Ladson, S.C.
Additionally, Clemson University has partnered with BMW, Michelin, and other industry leaders to develop a state-of-the-art automotive research facility - ICAR (International Center for Automotive Research).
Tennessee: The state accounts for 990 motor vehicle, body, trailer, and parts manufacturing companies employing approximately 121,600 Tennesseans.
Since 1983, when Nissan opened its first U.S. assembly plant in Smyrna, the site has grown into one of the largest automotive production plants under one roof with 5.2 million square feet. In 2006, Nissan moved its North America headquarters to Franklin, bringing 1,300 new jobs to Tennessee. Also in that year, C&S Plastics, LLC, a Tier II automotive supplier, launched an expansion effort that doubled its manufacturing space. New machinery at the facility will increase production capacity to support supplier demands from its major customers, such as M-Tek, CKNA, TS Tech, and Suzuki.
Virginia: The state is home to more than 180 automotive and automotive parts manufacturing facilities that employ more than 25,000 Virginians. In the Hampton Roads region, Ford Motor Co. employs more than 2,400 people. In Southwest Virginia, Volvo Trucks employs more than 2,600 people in Dublin to assemble two distinctly different lines of heavy trucks - Volvo and Mack.
Several automotive development projects made news in the past few years: JTEKT Automotive Virginia merged with Toshida Machine Works in 2006, increasing its global strength as a steering assemblies and bearings manufacturer. Dynax America Corp. - producer of clutch discs, drive plates, clutch packs, and torque converter pistons for automatic transmissions of Mazda, Nissan, and Ford models - completed an $11.7 million expansion at its Botetourt County plant. Altec Industries Inc., assembler of bucket trucks and digger derricks, acquired 14 additional acres of land for a $3 million expansion to its manufacturing and final assembly facility in Botetourt County. Volkswagen of America's move from Auburn Hills, Michigan, to Herndon, Virginia, is expected to begin in April 2008 and be completed by the end of next year.
Other Auto States
California: Innovations in California are also revved up for new investments. While Northern California boasts New United Motor Manufacturing Inc. (NUMMI), a joint venture by General Motors Corp. and Toyota that employs 5,440 workers in Fremont, Southern California touts its global influence on automotive design. As home to the world's largest concentration of manufacturer design studios representing automakers from North America, Europe, and Asia, the region also harbors the Art Center College of Design, a transportation design institution.
The buzz in the Silicon Valley revolves around the development of Tesla, a manufacturer of high-performance electric cars founded in 2003. The San Carlos-based Tesla Motors aims to develop and manufacture vehicles that exemplify "design, performance, and efficiency," while conforming to all U.S. safety, environmental, and durability standards. The company has taken over 400 reservations for its first car, the Tesla Roadster, a stylish high-performance sports car that accelerates to 60 mph in about four seconds with extreme energy efficiency. Tesla expects to start shipping the Roadster soon.
Oklahoma: In July 2007, Oklahoma reported that Tiger Truck LLC's truck assembly operation intended to bring 300 jobs to a 112,000-square-foot facility in Poteau that will assemble off-road vehicles designed by Chang'an Automobile Group, China's third-largest vehicle manufacturer. The primary market for the equipment will be Mexico and South America.
Texas: The Lone Star State ranks number one in automotive production capacity, with 388,000 units expected through 2010 according to Ward's AutoWorld. Texas also ranked as the single-largest market for full-size pick-ups in 2006, accounting for approximately 12 percent of all U.S. pick-up trucks sold. Recent Texas Workforce Commission data shows that Texas harbors approximately 560 automotive manufacturing establishments, with more than 35,900 employees. In 2004, General Motors (GM) in Arlington celebrated 50 years of manufacturing. The Lone Star State's auto industry shifted into high gear in 2006 as a result of the announcement of the opening of Toyota's sixth North American plant, a new truck assembly facility in San Antonio with more than 20 on-site suppliers. The new plant, which manufactures the Toyota Tundra, created more than 4,000 jobs.
According to the U.S. Census Bureau's 2005 Annual Survey of Manufacturers (the most current edition), Texas' motor vehicle manufacturing value of shipments was $11.1 billion; motor vehicle body and trailer manufacturing's value of shipments was $473.8 million; and motor vehicle parts manufacturing's value of shipments was $15.9 billion. In addition to GM and Toyota, major Texas auto manufacturing employers include Peterbilt Motors, Sanden International, Yazaki, and Stewart & Stevenson.
Ontario, Canada, joins the United States in its quest for vehicle-related industries. Toyota's auto news continues to rock Woodstock, Ontario - a new $1.2 billion Toyota assembly facility is anticipated to bring with it an influx of suppliers as well as a work force of 1,300 people.
New automotive investments in Ontario include an expansion by Honda Canada, as well as activity by Hino Motors, Toyotetsu, Toyota Boshoku, Hayashi Canada, and Aisin. The province's Ministry of Finance reports that 40 percent of its total international exports are derived from motor vehicles, parts, and accessories. In the first quarter of 2007, the Ministry cites, "Real exports grew by a solid 2.4 percent after rebounding a strong 3.1 percent in the fourth quarter of 2006. Exports were supported by increased U.S. demand for industrial goods and materials and automotive products."
According to the a 2007 report by the International Trade Administration, Office of Aerospace and Automotive Industries, U.S. Department of Commerce, consumers' automotive purchasing decisions are driven by rising gas prices, technological breakthroughs, and state and federal government efforts to reduce emissions and improve fuel economy, combined with the traditional standards of comfort and performance, driving range, and price. Development leaders in the aforementioned states and Ontario continue to provide incentives for auto companies that want to satisfy the need for vehicles that deliver all of North American consumers' needs, while also addressing environmental and other concerns.
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