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 Southern Auto Corridor News

April 3, 2010

U.S. Vehicle Sales Rose 24% in March

Overall sales of light vehicles rose by 24.3 percent in March over March 2009. All automakers but Suzuki and Chrysler saw sales jump dramatically in the U.S. in March. Buick, one of the four brands GM is keeping, earned a sales gain of 75.8 percent in March. Nissan saw an improvement of 44 percent, Ford 40 percent, Honda 21.6 percent, Subaru 46 percent, VW 39 percent, Hyundai Group (including Kia) 19 percent, Chevrolet 41.4 percent and Toyota, despite its troubles, saw an increase in sales of 40.6 percent in March. According to numbers from Autodata Corp., Asian brands accounted for 49 percent of the market, domestic brands, 43 percent and the Europeans gained a 8 percent share of the U.S. market in March. The seasonal adjusted annual rate (SAAR) for light vehicles in the U.S. now stands at 11.78 million, an improvement from 9.72 million units in March 2009.

Next Generation Automotive Plants in the Southern Automotive Corridor

Some experts have snickered at the three automotive start ups that announced assembly plants in the South in 2009, doubting their futures as eventual players in the U.S. market. But with GM and Chrysler's beat down in 2008 and 2009, there are opportunities for new automakers. Don’t forget that when Korean automakers’ Kia and Hyundai announced their first U.S. plants in West Point, Ga. and Montgomery, Ala., there was doubt then and those two automakers are setting the sales pace here in the U.S. 

The three new automakers that announced new plants in the Southern Automotive Corridor (www.SouthernAutoCorridor.com) in 2009 were V-Vehicle in Monroe, La., HK Motors in Baldwin Co., Ala. and GreenTech Automotive in Tunica Co., Miss.

None of the prospective automakers have revealed their models as of yet. V-Vehicle or VVC, has been funded thus far by the venture capital firm Kleiner Perkins Caufield and Byers, or KPCB. The company, whose goal is to produce a high-quality and fuel efficient car for the U.S. market, was founded by Frank Varasano, a former Oracle and Booz Allen Hamilton executive. The vehicle design team is led by Tom Matano, who is best known as the "father of the Miata."

The other two automotive start ups that announced plants in the South include Hybrid Kinetic (HK Motors) and GreenTech Automotive. HK Motors plans to build next generation vehicles as does GreenTech and both are being led by former Chinese automotive executives. The two start ups are also banking on funding to come from the EB-5 visa program, a U.S. government program that grants permanent resident status to foreign investors who invest at least $500,000 in businesses in rural areas of the country.

Is Hyundai Moving Alabama-Based Sante Fe Line to Georgia?

It now appears likely that Hyundai is going to shift production of its Sante Fe model to its new Kia plant in West Point, Ga. The Kia plant, which assembles just one line, the Kia Sorento SUV, just celebrated its formal grand opening in March. Both automakers are owned by Hyundai Motor Company of South Korea and share many suppliers, including an engine plant and transmission plant in Alabama and Georgia. The move would put the company's SUV production under one roof and would likely boost employment at the Kia plant in Georgia to 3,500 workers.

Electric Vehicle Plant Going Up in Kansas City

Smith Electric Vehicles has selected Kansas City, Mo. as the location for its new electric vehicle production facility in the U.S. Focused on all-electric, zero-emission commercial vehicles, the facility represents a $10 million investment resulting in the creation of 200 new positions.

New Nissan Leaf All-Electric Model to Cost $26,380

Nissan, the manufacturer of the new Leaf all-electric model in Smyrna, Tenn., announced in March the base model of the car, plus a home charging station with installation included, will cost $26,380. Nissan is taking reservations between April 20 and May 15 from those who have already registered their interest in purchasing the Leaf on the automaker's Web site. Plug in America, a nonprofit organization formed to accelerate the shift to plug-in vehicles, predicted that for the first couple of years, every Leaf built will be "spoken for" before it ever gets to a dealership. The Leaf will initially be imported from Japan for U.S. sales. Production in Smyrna of the Leaf will begin in late 2012. At full production, Nissan will be able to build 150,000 Leaf models a year at its Tennessee plant.

Seat Supplier for New VW Plant to Create 120 Jobs

Chattanooga Seating Systems, a joint venture between Hollingsworth Logistics, a Michigan supply chain firm and Magna Seating, a subsidiary of one of the world's largest parts suppliers, announced in the spring it has leased space in Chattanooga's Shallowford Business Park. The company will supply seats for VW's new sedan that is expected to roll off the new factory's line next year.

French Battery Company Breaks Ground in Jax

Saft America, a maker of high tech batteries used in hybrid vehicles, broke ground in March on a $200 million facility at Jacksonville, Fla.'s Cecil Commerce Center. The French company received a $95.5 million grant from the Department of Energy to help finance the facility under the American Recovery and Reinvestment Act. Once completed, the advanced lithium-ion battery plant will house 300 workers.  

N.C. Gov. Perdue Establishes Motorsports Advisory Council

Gov. Bev Perdue signed an executive order in the spring quarter establishing the North Carolina Motorsports Advisory Council. The council will advise the Governor on ways to strengthen the industry and recruit new motorsports jobs to North Carolina. The motorsports industry supports more than 27,000 jobs in North Carolina and contributes more than $6 billion to the state's economy each year. Ninety percent of NASCAR teams are based in North Carolina and Charlotte is home to the NASCAR Hall of Fame.

Kentucky Supplier Begins Operating in Kentucky

Kentucky Chrome Works, a start up automotive supplier, has begun operations in Hart Co., Ky. The company provides chrome plating for a variety of automakers. About 80 new jobs have been created by the company.

Modine to Double Jobs in Tennessee

Wisconsin-based Modine Manufacturing, which produces air coolers, engine fuel coolers and front-end cooling modules for the commercial vehicle market, announced in the spring quarter it will add approximately 200 new jobs at its manufacturing operations in Lawrenceburg, Tenn. The company will add a brazing furnace to its plant to manufacture aluminum radiators.

Parts Supplier Expands in Mississippi

Grenada Stamping and Assembly, a supplier of parts to the appliance, automotive, HVAC/R and off-highway markets, announced in the spring it is expanding its operations in Grenada, Miss. The expansion will create 40 new jobs.

Korean Supplier Breaks Ground on New Alabama Plant

SaeHaeSung, a Hyundai and Kia parts supplier in Andalusia, Ala., broke ground in the spring on the company's new 72,000-square-foot facility. SaeHaeSung is adding a stamping process to its Andalusia welding operations that represents an investment of $10 million and 150 new jobs.

Leigh Fibers Expanding in S.C.

Leigh Fibers, a supplier of reprocessed and raw fibers to the automotive industry and others, is expanding its manufacturing plant in Spartanburg County, S.C. The $10.1 million investment is expected to generate 40 new jobs.

Hyundai Increases Alabama Production to 1,000 Vehicles a Day

Hyundai has increased production at its Montgomery, Ala. plant to 1,000 vehicles a day in response to a 50 percent sales increase for the Sante Fe and Sonata models. In the last year, Hyundai has seen its market share grow by 4 percent and it now ranks as the seventh-largest U.S. automaker.

Tier 1 Supplier Expands in Kentucky

Angell-Demmel North America, a Tier 1 manufacturer of decorative trim products for the automotive industry, announced in the spring it will invest $5.8 million and add 52 jobs in Lebanon, Ky. The company was recently awarded a seven-year contract with Mercedes-Benz to produce aluminum trim for door and instrument panels for the M-Class, which is assembled in Alabama. Angell-Demmel has operated in Lebanon, Ky., since 1965.

MTU Diesel Investing $45 Million in Aiken, S.C.

MTU Detroit Diesel announced in the winter quarter it will establish a new manufacturing facility in Aiken County, S.C. MTU Detroit Diesel, a subsidiary of the Germany-based Tognum Group, anticipates that its project will require a $45 million investment and the creation of 250 new jobs. The company produces propulsion systems and energy systems based on diesel and gas engines, gas turbines and fuel cells for military, marine, rail, agriculture, heavy industrial and power generation applications. MTU will take over the former SKF USA plant in the Sage Mill Industrial Park.

Toyota Recognizes Top Parts Suppliers in the South

Toyota Motor Engineering and Manufacturing North America Inc. recognized several parts suppliers at its annual supplier meeting in March. More than 800 suppliers attended the meeting near Toyota's North American headquarters in Covington, Ky. The awards were given to suppliers that exceeded the company's expectations. Quality Awards: Aisin Light Metals, London, Ky.; DTR Tennessee, Midway, Tenn.; Franklin Precision Industry, Osceola, Ark.; International Crankshaft, Georgetown, Ky.; Otics USA, Morristown, Tenn.; U.S. Engine Valve, Westminster, S.C. Value Improvement Awards: Diversity-Vutec, New Albany, Miss.; Exide Technologies, Milton, Ga. At the supplier annual meeting, Erlanger, Ky.-based Toyota North America reported that it spent almost $25 billion on parts, goods, and services in North America in 2009.

AW North Carolina Not Affected by Toyota Troubles Yet

AW North Carolina, which manufactures transmissions for the Toyota Tundra, Sequoia and Tacoma models and remains one of the North Carolina Research Triangle's largest employers, continues to operate normally even though its largest customer -- Toyota -- is embroiled in quality control problems. The company, which currently houses 900 employees in Durham, N.C., let go of some employees in 2008, but has brought many of those back to the facility recently. One reason the company hasn't seen any layoffs is that the transmissions it produces are not used in any Toyota models that have been recalled, including the Camry, Corolla and Prius. AW North Carolina is a subsidiary of Japan's Aisin AW.

Parts Supplier Expands in Alabama

Alabama Cullman Yutaka Technologies is investing $3 million and adding 45 new jobs in Cullman, Ala. The company will add a catalytic converter line, which will serve Honda vehicles manufactured at the Japanese automaker's plant in Lincoln, Ala.  

Bosch Rexroth Investing $10M in S.C.

Bosch Rexroth, which produces industrial hydraulic units, including piston units and pumps, announced in late February it is investing $10 million and adding 50 jobs to its 400-employee plant in Fountain Inn, S.C. The expansion will allow the company to manufacture hydraulic motors used in oil drilling, transportation and other industries.

U.S. and Mexican Automotive Associations Join Forces to Educate Supply Base

The Automotive Industry Action Group (AIAG) and Industria Nacional de Autopartes (INA), the automotive parts manufacturers association in Mexico, announced in the winter quarter a new collaborative partnership. The joint venture brings AIAG together with INA to ensure that automotive parts suppliers in the U.S. and Mexico are equipped with the same world-class educational programs, industry best practices and standards. Members of both organizations will benefit from shared information and resources bringing together the best automotive manufacturing possible. AIAG and INA have agreed to pursue areas of collaboration where appropriate, share information on initiatives and projects of common interest in an effort to better organize the U.S. and Mexico supply chain.

Ohio-Based Supplier Opening New Plant in North Alabama

Acoust-A-Fiber R&D of Richwood, Ohio is moving one of its manufacturing lines to Limestone Co., Ala. The company will operate as MAI Manufacturing, producing acoustical insulation for automotive heating and air conditioning ventilation systems. The company expects to employ 30 workers.

Fleet One Adding 49 Jobs in Nashville

Fleet One, LLC, a fuel card and financial service provider supporting the transportation industry, announced plans in March to expand its headquarter operations in Nashville. The company will add 49 employees to its current staff of 190.

Kia Officially Celebrates Georgia Plant Opening

In the late winter quarter, Mong Koo Chung, chairman and CEO of South Korea's Hyundai-Kia Automotive Group, officially opened Kia's assembly plant in West Point, Ga. The facility assembles the Sorrento SUV and will produce transmissions for both Kia and sister company Hyundai, which operates another large assembly plant 80 miles away in Montgomery, Ala. Currently, about 1,300 workers are housed at the plant with over 3,000 expected at full production. At the opening, Chairman Chung said that the plant is the most advanced automotive manufacturing plant in the U.S.

Tire Cord Manufacturer Expands in Kentucky

Bekaert Corp., which manufactures drawn steel wire products used in tires among other products, is investing $10 million and adding 10 jobs at its 260,000-square-foot plant in Shelbyville, Ky. The company has operated in Shelby County, Ky. since 1990.

Hummer Deal Falls Through for GM; Shreveport Plant's Future in Doubt

When GM filed for bankruptcy in June of 2009, the company's Shreveport, La. plant was one of nine North American plants slated for closure by the Detroit automaker. GM pegged June of 2012 as the date for permanent closure of its assembly and stamping operations in Shreveport. GM has assembled the Hummer brand and Chevrolet and GMC pickup trucks at the plant for years. But there was hope that a deal to sell Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery Co. could keep the plant open past 2012. That deal fell through in the winter quarter when Tengzhong couldn't get clearance from Chinese regulators within the time frame allotted for the acquisition. In response, GM decided to close the Hummer brand. Louisiana officials are working with Motors Liquidation Company, which owns the Shreveport facility, to find alternative uses for the plant, which has undergone $1.5 billion in improvements in the last five years and at one time housed over 3,000 employees. The closure of the Shreveport plant means that since 2008, five major assembly facilities will have closed or are slated to close in the Southern Automotive Corridor. Ten years ago, the South was home to 23 major automotive assembly plants. If the Shreveport plant closes in 2012, that total will drop to 17 after adding Volkswagen's new plant, which is scheduled to open in 2011.

Trailer Manufacturer Adds Jobs in Kentucky

Gator Made, a manufacturer of utility trailers, gooseneck and cargo trailers, is investing $300,000 at its facilities in Pulaski Co., Ky. The expansion will result in 19 new jobs.
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