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 Southern Auto Corridor News

February 18, 2010

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.

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. 

Fifty New Auto Supplier Jobs Created in Gaffney, S.C.

Suminoe Textile of America (STA) announced in the winter quarter that it will expand its operations in Cherokee County, S.C. The company, a wholly-owned subsidiary of Suminoe Textile Ltd. of Osaka, Japan, is a leading supplier of textile products for the North American automotive market. As part of the $6.5 million expansion, Suminoe will open a new manufacturing facility in Gaffney that will house 50 workers.

Editorial

Toyota's Problems Not Good News for Mississippi

Toyota's multiple issues over quality control of its vehicles is not good news for the state of Mississippi where the Japanese automaker built an assembly plant in the northeast portion of the state that has never opened for business. In mid-February, Toyota announced it was cutting back production at its two other assembly plants in the Southern Automotive Corridor, one in San Antonio, Tex. and the other in Georgetown, Ky., because of a drop in sales related to the recall of eight million vehicles worldwide.

In early 2007, Toyota chose to build the plant near Tupelo, Miss. to produce the Highlander SUV model. When the SUV market collapsed, the Japanese automaker announced that the fuel-saving Prius model would be assembled at the plant. Then, on December 15, 2008, the company decided to idle the finished, but unequipped facility.

Toyota officials have said there is no timetable on when or if the plant will open. There were rumors prior to Toyota's giant recall that the company would start to assemble the Corolla model in 2011 at the Mississippi plant.

It is believed that incentive agreements made between state and local governments and Toyota require that the company invest $500 million in the project by the end of 2012. So far, Toyota has invested about $300 million in the plant. If the plant was equipped, reaching the $500 million investment threshold wouldn't be a problem. But, even if Toyota decided today to go ahead and start production at the plant, it would take at least a year to ready the facility.

It has been reported by other sources that because of the delay in opening the plant, Toyota will make an interest payment of about $10 million on bonds of $293 million that were issued to the company as part of the incentive package Mississippi gave the automaker. In addition, this year Toyota will make annual payments of $5 million for 10 years to school districts in northeast Mississippi.

mike@sb-d.com

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.  

SL America Awarded VW Contract

SL America Corp., located in Clinton, Tenn., has been awarded the contract to supply automatic shifter assemblies for Volkswagen Group of North America. The contract is SL America's first with Volkswagen. The company will supply the automatic shifters for both the midsize sedan VW will assemble in Chattanooga as well as for vehicles the German automaker assembles in Puebla, Mexico. SL America produces gearshift systems, pedal assemblies and exterior lighting for several major automotive manufacturers, including Hyundai and GM. The South Korean firm is expected to invest $35 million as a result of the new contract and hire 300 more workers that will be housed in a 100,000-square-foot addition to its current facility.

Yazaki Locating NA Headquarters in Georgia

Yazaki Corp., based in Iwata, Japan, will locate its North American headquarters in Gainesville, Ga. in Hall County. The company manufactures fuel tanks for original equipment manufactures. Yazaki will initially employ 20 workers.

VW Supplier Fehrer Automotive Locating in Gadsden, Ala.

Kitzingen, Germany-based Fehrer Automotive announced in February it will locate in the former Advance Auto Parts building in Gadsden, Ala. to supply the new Volkswagen plant being built in Chattanooga with seat pads. The company will also supply the Mercedes-Benz plant in Tuscaloosa, Ala. with the same product. About 100 jobs are expected to be created in the deal. 

Lithium-ion Facility Set for Florida

Bren-Tronics Energy Systems (BES) announced in the winter quarter it will locate in an existing facility in Alachua County, Fla. to research and manufacture lithium-ion cells for rechargeable batteries. Renovations and upgrades of the facility are expected to cost approximately $10 million and will occur over a two-year period. BES expects to create 15 jobs in the deal.

Fisher Barton Expands in South Carolina

Fisher Barton, an OEM supplier of precision metal stampings and welded assemblies for the automotive industry and other sectors, announced it will expand its Laurens County, S.C. facility. The $2 million investment is expected to generate 15 new jobs.

Parker Hannifin Expands Mississippi Operations

Parker Hannifin, a leader in motion control technologies and systems, announced in February the expansion of the company's Batesville, Miss. operations. The expansion accommodates additional production of refrigerant control and containment components for automotive, heavy-duty truck and off-road air conditioning applications. The expansion will create 50 new jobs. 

Automotive IT Company Opens Office in Chattanooga

Wolfsburg, Germany-based Honigsberg & Duvel Corp., an information technology company that specializes in the automotive sector, has leased office space in downtown Chattanooga with plans to employ 30 workers within 12 months and possibly 100 in two years. About 70 percent of the company's work in Germany is for Volkswagen.

Globe Specialty Metals Restarts Alabama Plant

In February, New York-based Globe Specialty Metals reopened its silicon metal and ferrosilicon alloys plant in Selma, Ala. The plant was idled during the recession. The plant can produce 27,000 tons of silicon metal and alloys annually. The reopening means 90 workers have been rehired by the company.

Welding Robot Supplier Sets Up Shop in Atlanta

Germany-based Nimak Gmbh, which makes welding robots for automotive assembly factories, is setting up an office in Atlanta. The company has installed about 800 welding robots at the Mercedes-Benz facility in Tuscaloosa, Ala., and is installing about 400 at the new Volkswagen plant being built in Chattanooga, Tenn.

Pure Power Technologies Celebrates in Columbia, S.C.

In the winter quarter, Columbia, S.C.-based Pure Power Technologies, a Navistar company, celebrated the inauguration of the company's research and development operation in the Columbia Technical Center. In October, Navistar acquired the assets of Continental Diesel Systems to manufacture fuel injection systems for its MaxxForce diesel engines. Pure Power will operate a R&D center in Columbia and a manufacturing plant in nearby Blythewood, S.C. The two operations were former Continental assets and Pure Power has retained the jobs that would have been lost after Continental announced the closure of the two facilities.

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