Indiana: Accelerating the Automotive Industry

Located in the heart of the Midwest, Indiana offers a low-cost, pro-business environment - including low utility costs and low workers' compensation and unemployment insurance rates - coupled with a highly skilled, educated, and capable work force. With nine interstate highways, three state-of-the-art international ports, and the second largest FedEx hub in the United States, Indiana offers domestic and international vehicle production companies a strong competitive advantage when it comes to reaching North American and global markets.

Advanced manufacturing is a mainstay of Indiana's economy. The production of motor vehicles, parts, and transportation equipment is the state's leading manufacturing sector. In fact, Indiana ranked sixth in the nation for automobile manufacturing growth in 2008 and currently ranks third or higher nationally in almost every segment of this industry.

Since 1893, when Indiana inventor Elwood Haynes designed a motorized "horseless carriage," Indiana has been a hotbed of automotive production. Famous early models such as the Izzer, Wescott, and Stutz gave way to better-known and more successful models such as Auburn, Cord, Duesenberg, and Studebaker.

Indiana today is a national leader in vehicle production, including major assembly plants for U.S. stalwarts such as AM General and General Motors, which produces more than 240,000 pickup trucks each year at its Fort Wayne, Indiana, assembly plant.

Indiana is also home to hundreds of domestic parts manufacturers, including Chrysler, Cummins, Ford, Allison Transmission, and ArvinMeritor. Chrysler employs approximately 6,400 Indiana workers in four manufacturing facilities. Allison Transmission operates a $1 billion facility in Indianapolis. CTS Corporation is known for its superior automotive sensors, which are used throughout the world while Diamet, Enkei, Accuride Corp., Remy International Inc., and Wabash National Corp. are all innovative automotive manufacturers that are in the top 30 highest grossing companies in the state.

Indiana also is home to major international investment and manufacturing, with approximately 500 international companies employing more than 139,000 Indiana workers - including more than 83,000 employees involved in manufacturing.

More than 220 companies from Japan - employing more than 42,000 workers - are located in Indiana. The state ranks first in terms of employment by Japanese firms relative to other Midwestern states, according to the 2006 Japanese Direct Investment Survey.

Among these companies are Japan's leading automotive companies: Indiana is home to North America's only Subaru assembly plant; a Toyota assembly plant; and a Toyota-Fuji Heavy Industries joint venture. A new Honda assembly plant will begin producing the popular Honda Civic in October 2008.

Hundreds of international vehicle parts makers, including Toyota Boshoku, Robert Bosch, Freudenberg & Co., Siemens, and ThyssenKrupp are located in Indiana. GETRAG, a German firm, currently is building a new $450 million transmission plant in central Indiana and the state also is home of the North American headquarters of Aisin U.S.A.

Indiana's Business Advantages
Indiana's central location, business-friendly environment, and skilled and reliable work force put the world's automotive companies in the fast lane for business success.

Indiana ranks first in the Midwest and 12th nationally in the Tax Foundation's Business Tax Climate Index; is one of the lowest cost places to do business in the Midwest and the nation, according to Forbes; and ranks first in the Midwest in the Milken Institute's Cost of Doing Business Index. Indiana has the lowest workers' compensation rates for manufacturing in the Midwest and second lowest in the nation.

Indiana offers one of the highest research and development sales tax credits in the country, which provides an exemption to companies on the amount they pay in state sales taxes on R&D equipment. Indiana has no inventory tax and is phasing in the single-sales factor for apportioning corporate income tax.

Under the leadership of Governor Mitch Daniels, Indiana recently completed a sweeping property tax reform plan that will cut homeowner property taxes by more than 30 percent and provides permanent protection against future property tax increases for homeowners and businesses. Indiana is also one of only 10 states in the country to boast an AAA credit rating by Standard & Poor's Ratings Service.

The "Crossroads of America," Indiana is a leading logistics hub for North America. More than 82 million people live within 500 miles of Indiana and more than 20 major metropolitan markets are within a half-day's drive of the state. More interstate highways intersect Indiana than any other state. Indiana also features a vast rail system, thriving ports on two of the nation's busiest waterways, and the nation's second-largest FedEx facility. The result is a huge advantage for businesses that rely on fast, efficient distribution.

Indiana has embarked on a massive $12 billion infrastructure investment program that will dramatically improve the state's transportation and logistics infrastructure. Called Major Moves, the program includes more than 200 new construction projects and 200 major preservation projects over a 10-year period - all funded without an increase in the state gas or diesel tax.

U.S. Manufacturers at Home in Indiana
Indiana's pro-business environment has helped attract major new investment in the automotive industry.

For example, in 2006, Cummins Inc. announced plans to build the company's new family of light-duty, clean-diesel engines in its hometown of Columbus, Indiana. The move will create 600 to 800 new jobs by 2012. In January, Cummins announced it would add approximately 500 professional employees to its Columbus work force and lease a downtown city office building to meet the company's expected growth.

Just weeks ago, hybrid vehicle battery maker EnerDel announced plans to locate its new global manufacturing and development center in Indiana, a move that is expected to create more than 850 new jobs across the state by 2012.

Founded in 2004, EnerDel develops lithium-ion batteries for automotive manufacturers that are lighter, occupy less space, provide more power, and have a longer life than the nickel metal hydride batteries found in today's hybrid cars. EnerDel's 600-pound lithium-ion battery packs will power a Norwegian-made all-electric car, called Think. The two-seater will become the first commercially available electric car, with plans calling for up to 10,000 of the cars to be produced and sold in Europe in 2009, with U.S. sales following.

As Cummins, EnerDel, and other domestic vehicle production companies have discovered, Indiana is the smart move for companies looking for a low-cost, pro-business manufacturing environment.

Indiana Lures International Investment
Under the leadership of Governor Daniels, Indiana has made international investment a cornerstone of its efforts to grow a diversified economy. As a result, international firms are discovering that Indiana's central location, business-friendly environment, and highly skilled work force add up to success across a range of business ventures, including automotive manufacturing. In fact, according to IBM's PLI-Global Location Strategies service, Indiana ranks first in the nation in production jobs created and second in the total number of jobs created by international investment.

Governor Daniels has led three international missions to encourage expanded relationships between Indiana and international companies, establish new investment partners for Indiana, and renew the state's historic relationship with the people of our major trading countries.

In 2005, Daniels led a state business development trip to visit companies and officials in Taiwan and Japan. In 2006, he led a delegation to Japan and South Korea. And in 2007, the governor led trips to Germany, the United Kingdom, and Japan. Those trips helped spur millions of dollars in new investment and thousands of new jobs in Indiana.

Following the trips to Japan in 2005 and 2006, Indiana became home to the new Toyota-Fuji joint venture assembly line. The governor returned early from his 2006 trip to Japan and South Korea to join Honda executives to announce that Indiana would become home to the company's new North American assembly plant. GETRAG also announced plans to build its new Indiana transmission factory within weeks of the 2007 European trip.

Indiana's history, heritage, and drive ensure that the state will continue to be a destination of choice for both domestic and international automotive investment. Indiana's low-cost business environment, skilled work force, central location, unbeatable infrastructure, and history of welcoming innovation and investment create an environment for automotive manufacturing success.

When it's all added up, it's clear that Indiana's automotive industry isn't slowing down.

Information about Indiana's economic climate, business costs, and business investment opportunities is available at our website.

Nathan J. Feltman, Secretary of Commerce
Indiana Economic Development Corporation
One North Capitol, Suite 700
Indianapolis, IN 46204
Phone: 317-232-8800
Fax: 317-232-4146
www.AccelerateIndiana.com