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 Southern Auto Corridor News

January 22, 2010

HK Motors and Italdesign-Giugiaro Sign Agreement in Alabama

(Left to right) Giorgetto Giugiaro (Chairman, Italdesign Giugiaro), Alabama Gov. Bob Riley and Dr. Yung "Benjamin" Yeung (Chairman, HK Motors) in Montgomery, Ala. on January 19. 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.

Auto Parts Supplier Expanding in Arkansas, Creating 250 New Jobs

Saint Jean Industries, an auto parts manufacturer and supplier, announced in January that it will expand its manufacturing plant in Heber Springs, Ark. creating about 250 new jobs with an investment of $14 million. The Heber Springs plant makes aluminum parts for the automotive industry. France-based Saint Jean said the expansion is a result of several significant orders placed with the company, specifically from ZF, a German supplier to Ford and GM.

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.

Hanwha L&C Alabama Beginning Second Alabama Expansion

Hanwha L&C announced in the winter quarter it will begin its second major expansion of its facility in Opelika, Ala. In addition to automotive components, the company makes plastic products for the construction and packaging industry. The $11 million expansion will include 25 new jobs.

Akebono on Expansion Jag in the Southern Automotive Corridor

Akebono Corp., which recently acquired Robert Bosch LLC's North American Brake Division, is adding 13,000 square feet of office space at its headquarter operation in Elizabethtown, Ky. The deal will add 70 new jobs. In addition, the company is consolidating former Bosch plants in the U.S. and Mexico to Clarksville, Tenn. and another facility in South Carolina. Akebono plans to invest $13.5 million in new equipment at the Clarksville, Tenn. plant with 300 new hires. Following its Tennessee brake plant expansion, Akebono announced plans to locate a new facility in Lexington County, S.C. The $35.6 million investment is expected to generate 283 new jobs.

Parts Maker Relocates HQ, Expands in North Carolina

Wilbert Plastic Services, a supplier of molded plastic parts for the automotive, industrial equipment and custom parts markets, is expanding its operations in Gaston County, N.C. and will relocate its headquarters from Chicago to Belmont, N.C. The company produces parts for heavy trucks. The $5.7 million project will create 41 new jobs.

Alabama Company Lands Auto Parts Contract

In the winter quarter, Citation Corp. of Brewton, Ala. landed a $50 million contract to manufacture brake components for hybrid cars. The company will supply iron-case brake parts for small hybrid cars and crossover utility vehicles for the North American market for Continental Teves.

Kentucky Gov. Beshear Announces Funding for Federal Battery Lab

In the winter quarter, Gov. Steve Beshear and Cabinet for Economic Development Secretary Larry Hayes announced the approval of state funding of up to $3.5 million for the Kentucky-Argonne Battery Manufacturing Research and Development Center in Lexington. The state funds will be matched with up to $3.5 million in federal funds. In April of 2009, the Commonwealth of Kentucky, the University of Kentucky and University of Louisville announced a partnership with the U.S. Department of Energy's Argonne National Laboratory to establish a National Battery Manufacturing R&D Center in Kentucky. The Argonne-managed facility will aid nationwide efforts to develop and deploy a domestic supply of advanced battery technologies for vehicle applications to assist in securing U.S. energy independence and reduce greenhouse gas emissions. The center's major goals are to support the development of advanced lithium-ion batteries; facilitate collaborations between federal labs, universities, manufacturers, suppliers and end-users; develop advanced manufacturing technologies to reduce battery production costs; and accelerate the commercialization of technologies at national labs and universities.

Korean Auto Parts Manufacturer Locating in Alabama

INZI Controls Alabama, a new company formed by Koo-Ryong Jung after acquiring Toledo Molding and Die, is setting up shop in Elba, Ala. The company will continue to provide injection and blow molded automotive parts. More than 200 new jobs are expected to be created.

Parts Maker Expanding in Alabama

SaeHaeSung Alabama, a tier two parts supplier in Andalusia, Ala., announced in December it is expanding its facilities by about one-third. The Korean-based company, which supplies several OEMs in the South, currently employs about 60 workers.


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