Winter 2010
Proterra Selects S.C. for Hybrid Commercial Vehicle Facility
In February, Proterra Inc., which develops and assembles drive and energy storage systems for heavy-duty vehicles, including their BE-35 fast-charge battery electric bus, announced that it will locate a facility at the Clemson University International Center for Automotive Research (CU-ICAR). The project will include research and development as well as assembly of its vehicles. The company designs, develops and assembles all electric and battery dominant hybrid drive solutions and complete vehicles for commercial applications including transit, school and commercial buses, parcel delivery vehicles and other class 4-8 trucks. Proterra, which looked at sites in 30 different states before choosing Greenville County, S.C., expects that it will invest $68 million and create more than 1,300 new jobs with the project.
VW Supplier Park Underway -- Engines to Come From Mexico
Volkswagen has begun work on two 220,000-square-foot buildings next to its assembly plant in Chattanooga that will serve as a supplier park for the German automaker. VW expects that six suppliers will locate in the two buildings adding about 500 jobs to the project. Suppliers will produce axles, fuel tanks, seats, headliners, door panels, exhaust systems, tires, wheels, consoles and other parts in the park. The engines of the new sedan VW will assemble in 2011 will come primarily from its plant in Puebla, Mex., however some will be imported from Germany. The transmissions for the new model will be imported from Japan.
DOE Closes Electric Car Loan Agreement with Nissan
Secretary of Energy Steven Chu announced in February that the Department of Energy has closed on a $1.4 billion loan agreement with Nissan North America that will bring production of the Nissan LEAF model and its batteries to the Japanese automaker's massive plant in Smyrna, Tenn. The LEAF is a zero-emission, all-electric vehicle. Most of the proceeds of the loan will be spent on development and manufacture of the lithium-ion battery packs that will power the LEAF. The loan, which originated through the Department's loan guarantee program office, was issued as part of the Advanced Technology Vehicles Manufacturing Loan Program, a $25 billion program authorized by Congress as part of the Energy Independence and Security Act of 2007. The loan will result in the creation of up to 1,300 new jobs when the plants are operating at full capacity. Modification of the Smyrna facility, which will begin later this year, includes a new battery plant and changes in the existing structure for electric vehicle assembly. When fully operational, Nissan will have the capacity to build 150,000 LEAF models and 200,000 battery packs annually. Nissan North America is headquartered in Nashville, Tenn.
Florida Developer to Buy Former Atlanta GM Plant Site
In the winter quarter, Orlando-based New Broad Street Cos. signed a contract to purchase the old GM plant in Doraville, Ga., which is located in the Atlanta metro. The developer plans to build a "clean and green" mixed-use community, including homes, retail and office space on the 165-acre site. The plant closed in September of 2008. New Broad Street had been in negotiations with GM for 18 months before closing the deal in February.
HK Motors and Italdesign-Giugiaro Sign Agreement in Alabama
Dr. Yung "Benjamin" Yeung (Chairman, HK Motors), Giorgetto Giugiaro (Chairman, Italdesign Giugiaro), Alabama Gov. Bob Riley and three hundred other officials and guests were at the Convention Center at the Renaissance Hotel and Spa in Montgomery, Ala. on January 19 to celebrate the signing of a $500 million contract between HK Motors and leading car design and engineering firm Italdesign-Giugiaro S.p.A. The contract is the latest effort by HK Motors to build a $1 billion-plus next generation automobile assembly plant in Baldwin County, Ala. From 1992 to 2002, Dr. Yeung was the Chairman, CEO and President of Brilliance China Automotive Holdings. Brilliance was the first China-based company to acquire a public listing on the New York Stock Exchange in October of 1992. During Yeung's tenure at Brilliance, the company introduced the "Zhonghua" sedan, designed by Giugiaro and the company's market capitalization increased tenfold in China. The HK Motors development plan includes the mass production of 10 hybrid vehicles, from sedans to vans to commercial trucks. The company's Alabama plant project is dependent on the firm raising billions from investors, part of which would come from EB-5 visa programs that offer U.S. citizenship for Chinese who invest $500,000 in the project. Charles Huang, vice-chairman of HK said the company remains on track to raise $1.3 billion this year.
So, how bad was 2009 in the Southern Automotive Corridor?
Automakers in the U.S. are most assuredly happy that 2009 is done and gone. The year marked the worst year for U.S. sales in nearly 30 years. Depending on the automaker, 2009 saw sales mixed like few times in history. For example, Chrysler sold only 931,000 vehicles in 2009, its worst performance since 1962. GM sales were down 30 percent. Japanese automakers' Nissan, Toyota and Honda were all off about the same in 2009 compared to year-before totals at about 20 percent. Contrastingly, Korean automakers that have plants in Alabama and Georgia saw substantial gains as Hyundai and Kia increased sales by eight and 10 percent respectively for the year. Overall, light vehicle sales in the U.S. totaled 10.5 million in 2009, a far cry from the 17 million just a few years ago. But going into 2010, almost all U.S. automakers were upbeat about potential sales in 2010 and 2011. Many have predicted total sales could top 13 million this year.
Alabama Plant Building 4-Cylinder Sante Fe Model
In the winter quarter, Hyundai officials introduced the first Sante Fe SUV model featuring a 4-cylinder engine. The new engine is being built at the company's engine plant in Montgomery.
Bank of America Backing VW Supplier Park
At the first of the year, Bank of America agreed to lend Volkswagen $21 million to build a parts supplier park next to its $1 billion assembly plant in Chattanooga. VW wanted to finance the supplier park separate from the assembly plant in order to meet European accounting standards for operating the two developments independently. The park is expected to attract seven to nine large suppliers to VW's assembly plant, which will open in 2011. Volkswagen will pay off the Bank of America loan over the next six years with proceeds from lease payments made by parts suppliers who locate within the VW-owned park. The city of Chattanooga will lease the park land to VW, which is what it is doing with the 1,250 acres VW is building the assembly plant on. By leasing the land from the city, VW is exempt from property taxes other than school taxes for the next 30 years.
Toyota to Ship West Virginia Made Engines to Japan
The Toyota Motor Manufacturing plant in Buffalo, W. Va. will produce four-cylinder engines to ship to Japan. The plant had been shipping four-cylinder engines for Toyota Corollas to plants in California and Ontario. Although production has ceased at the California plant that Toyota shared with GM, the West Virginia engine plant will continue to ship the engines to Ontario and to a factory in Japan. Toyota employs more than a thousand at its plant in West Virginia.
GM Could Reopen Tennessee Assembly Operations
While 1,000 workers continue to build engines at the former Saturn GM facility in Spring Hill, Tenn., locals there are excited by the prospect that assembly operations could resume at the idled plant soon. Mark Reuss, President of GM's North American operations, announced in January that the idled plant could be restarted because the domestic automaker cannot produce popular models fast enough after it restructured and closed several assembly plants last year. GM built Saturn models at the plant for more than 15 years but has not assembled vehicles in Tennessee since the last GM Traverse model rolled off the line in 2009.
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