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Summer 2012

For real-time news on business, politics and economic development in the South, go to www.RandleReport.com. For even more economic development news in the South, including all project announcements, go to www.SB-D.com. For more information on the automotive industry in the South, including all project announcements, go to www.SouthernAutoCorridor.com. And for complete coverage of economic development in the rural South, go to www.SmallTownSouth.com. EDITOR'S NOTE: On August 31, 2012, The Randle Report launched www.RandleSportsReport.com.

An end of an era in Shreveport

General Motors' Shreveport assembly plant closed for good shortly after the last truck assembled rolled off the line early Tuesday afternoon, August 28, 2012. On the front of the truck was a sign that read, "8,853,693rd," documenting the number of vehicles assembled at the GM plant in Shreveport since it opened in 1981. On the back bumper of the last vehicle, a sign read "That's all folks!" The plant had always been a truck-related plant and in 2000 GM invested $1 billion in the facility. Shortly after that, Shreveport became the sole producer of the Hummer H3 vehicle. After the demise of Hummer in 2010, the facility produced the Chevrolet Colorado and GMC Canyon pickup models. On the final day of production, about 800 workers had clocked in. At one point, over 3,000 workers were housed at the facility. Assembly of the two pickup truck models was moved to GM's Missouri plant.

Editorial

Third automotive plant shifts can only go so far

All but three of the Southern Auto Corridor's major assembly plants are running third shifts. If the U.S. market gets to 15 million units this year, look for at least one new assembly plant to be built in the South next year. Since the recession and the natural disasters in Asia that disrupted supply chains, there have been no new assembly plants announced in the South, although Mexico has seen three. Japan's three largest automakers -- Toyota, Honda and Nissan -- are all localizing production for the U.S. market to hedge against the high value of the yen as well as disruptions in the supply lines. To do this without the aid of new facilities, many automakers, including GM, Mercedes-Benz, Hyundai and BMW in the South, have announced something they have rarely done; add a third shift to existing plants.

Adding a third shift is a sign that automakers are concentrating on increased production for now by improving efficiencies and worker productivity. And exports are at the forefront. For example, Honda expects to export 200,000 units from its North American plants in 2013, up from 55,000 in 2011. In short, many foreign automakers are now outsourcing production to the Southern Auto Corridor and Mexico with a special emphasis on exporting. By and large, adding third shifts at existing plants is a temporary move. When the U.S. market returns to pre-recession sales levels of 16 million units – about 14 to 15 million U.S. sales are expected this year -- look for automakers to begin sniffing around the Southern Auto Corridor for new facilities.

mike@sb-d.com

No announcement, but Volkswagen is preparing for a "big kahuna" expansion

As of this writing, Volkswagen has not announced a major expansion of its plant in Chattanooga, Tenn. However, in late September, Chattanooga officials awarded a contract to Wright Brothers Construction for site work that most likely will be part of a large VW expansion. There are rumors that VW will build a new facility to mirror its current plant that assembles the Passat sedan model. The new facility is expected to build an SUV model. The German automaker is already in the midst of an expansion of the Chattanooga facility that will bring its workforce to about 3,500 to meet demand for the Passat.

New models set for Missouri GM plant

In September, General Motors announced its Wentzville, Mo., assembly plant will build an all-new GMC Canyon pickup. The Detroit automaker is investing $380 million in its Missouri facility that will also assemble the all-new Colorado pickup. GM ended production of those two models at its plant in Shreveport, La., which is closing.

Vehicle assembly returns to GM Tennessee plant

For the first time in three years, GM is again assembling vehicles at its Spring Hill, Tenn., facility. The first Chevy Equinox model rolled off the line on September 4. The plant was idled in November 2009, but now over 1,800 workers are producing the Equinox at the former Saturn facility. In addition, manufacture of the new Ecotec engine has started in Spring Hill.

Editorial

Nissan's Mississippi plant finally gets some footing

Nissan's Canton, Miss., plant is really gaining some footing in the Southern Auto Corridor as the Japanese automaker has positioned the facility as a hub for its domestic production of large vehicles. When Mississippi landed its first automotive assembly plant more than 10 years ago, it wasn't a secret that Nissan had trouble finding qualified workers for the facility. In fact, I talked to Jimmy Heidel, the former state-level economic development director in Mississippi about the situation and he said to me, "Mike, what did they expect? We have very few people in Mississippi who have ever operated robots." Well, that was then and this is now.

Nissan's Canton, Miss., plant is really gaining some footing in the Southern Auto Corridor as the Japanese automaker has positioned the facility as a hub for its domestic production of large vehicles. Three new models will roll off the lines at Canton as Nissan moves Frontier pickup and Xterra SUV assembly from its plant in Smyrna, Tenn., to Mississippi. The plant already produces the Titan pickup, Armada SUV and the NV commercial van in Canton. As a result of the new lines, employment at Nissan's Mississippi plant is expected to top 5,000 at the end of the year. Nissan currently employs about 6,000 in Smyrna.

mike@sb-d.com

Porsche Cars North America moving ahead with new headquarters near Atlanta airport

Porsche recently paid $34.3 million for 56.2 acres on which it plans to build its U.S. headquarters at Jacoby Development Inc.'s Aerotropolis. Roughly half of the land -- 26 acres -- will be used for the $100 million headquarters project, a showcase for the brand. The Porsche headquarters will help anchor Aerotropolis, the nearly 130-acre mixed-used redevelopment of the former Ford Motor Co. assembly plant in Hapeville.

Toyota breaks ground on Huntsville, Ala., engine plant expansion

Japanese automaker Toyota broke ground in September on the 300,000-square-foot expansion of its V6 engine plant in Huntsville, Ala. The $80 million project will bring total investment to more than $700 million for Toyota in Huntsville. The deal will create 125 jobs, bringing Toyota's total to 1,150 in Huntsville.

Honda makes headlines in Alabama

Honda Manufacturing is expanding and bringing in 300 new jobs to its east Alabama plant. Honda will also add a new luxury model vehicle to the Lincoln, Ala., assembly line -- the Acura MDX. The Ridgeline pickup was transferred to Line 1 at Honda's Alabama auto factory this summer. Honda announced another $115 million expansion at the plant earlier in the summer quarter.

GM begins hiring binge at IT center Austin
General Motors announced in September that it will hire 500 information-technology workers to staff a new center in Austin, Texas --a step in GM's plan to build its own global IT infrastructure. Currently, 90 percent of the company's IT work is outsourced. GM wants 90 percent of its IT work done internally within five years, which would result in the hiring of thousands of employees. The Austin location is the first of what likely will be four "innovation centers," GM said in a statement. It is hiring software developers, business analysts and other IT workers.

GreenTech unveils new Mississippi plant and car line

A visit from former President Bill Clinton marked the groundbreaking of GreenTech Automotive's plant in Horn Lake, Miss. A company spokesman said they hope to make 10,000 MyCars within the next two years. Neighborhood electric vehicles, a cross between golf carts and full-sized vehicles, are limited to streets with speed limits of 35 mph and below in the U.S. GreenTech's will cost $18,000, and the top-of-the-line model is supposed to travel up to 95 miles on a single charge. The company plans to sell a year's output to a Danish firm and will also sell some to Domino's Pizza franchisees and other U.S. vehicle fleet operators. 

Mercedes-Benz shipping kits from Alabama plant to Asia

Why export ready-to-assemble M-Class SUV "kits" instead of fully-assembled M-Class vehicles? Mercedes-Benz executives have the answer. The German automaker is shipping kits through logistics supplier BLG Logistics to Asian markets, where the M-Class vehicles are assembled. By shipping kits instead of fully-assembled SUVs, Mercedes avoids the tariffs associated with vehicle shipments. The expansion of kit exports has added 45 jobs at the Mercedes plant in Vance, Ala.

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