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 Southern Auto Corridor News

May 18, 2009

Volkswagen Building Bigger Tennessee Plant

Bloomberg.com reported on May 14 that Volkswagen AG plans on building a larger plant in Chattanooga than originally proposed. At a wall raising ceremony on Thursday, which was attended by Tennessee Gov. Phil Bredesen, VW CEO Stefan Jacoby and others, Frank Fisher, the plant's CEO said that the expansion comes at a perfect time. Fisher cited low construction costs, the result of the recession, as one reason for the expansion. He also mentioned that the worst is over for the U.S. car market and that recovery will be well underway by the time the new Tennessee plant opens in 2011. VW plans to build 2.4 million square feet of space in Chattanooga as opposed to the original 2 million square feet. A new sedan designed exclusively for the U.S. market will be assembled at the new VW plant.

Johnson Controls Taking Applications for 100 Workers in Georgia

Johnson Controls announced in early May it is taking applications for 100 new jobs at its parts plant being built in West Point, Ga. The plant will serve the new Kia plant that is nearing completion. The Johnson Controls facility will produce seat systems and door panels for the Kia Sorento SUV. The company expects to eventually employ 300 workers in West Georgia.

Sales of Alabama Made Hyundai's See Mixed Results in April

Hyundai Motor Manufacturing Alabama reported that sales of its Sonata sedan rose 26 percent in April compared to a year ago. However, sales of the Alabama-built Santa Fe SUV dropped 48 percent in April over the last year. Collectively, Hyundai's Alabama made vehicles saw an increase of 1.6 percent for April sales.

Sales of Alabama Made Mercedes Take a Dive

Mercedes saw a dramatic drop in sales for its Alabama-made R-Class, M-Class and GL-Class models. Overall, Mercedes' sales fell almost 48 percent in April compared to a year ago, with only 3,235 Alabama-built vehicles being sold for the month.

China, U.S. Battle for Top in Vehicle Sales

Recent reports show that China's car and light truck sales increased by 25 percent to 1.15 million units in April compared to the same month last year. According to the China Association of Automobile Manufacturers, passenger car sales in April totaled 831,000 compared to 820,000 cars sold in the U.S. The primary reason China has passed the U.S. in vehicle sales is the sharp decline in U.S. sales over the 18 months. U.S. sales for cars and light trucks totaled 16.1 million in 2007 and dropped to a total of 13.2 million in 2008. Automotive experts in China project that U.S. car and light truck sales to go back over the 15 million mark within two years. If that occurs, it will likely put China back in the No. 2 position worldwide.  

Honda Sees Highest Sales Total Year-to-Date

Even though Honda's vehicle sales in the U.S. were down 25 percent in April compared to a year ago, the Japanese automaker sold 101,029 vehicles in the U.S. in April. The total represents the highest number of vehicles sold in any month this year. Honda operates one assembly plant in the Southern Automotive Corridor in Lincoln, Ala.

Toyota Loses $7.7 Billion in First Quarter

Topping the loses at General Motors ($6 billion) during the same period, Toyota announced it lost 765.8 billion yen ($7.7 billion) in the first quarter of this year. Toyota cited a sharp downturn in sales in Europe and the U.S. for the massive losses. While battling the loses, Toyota has not closed a single plant worldwide, however, the company has offered buyouts and cut temporary work forces in several countries, including the U.S. Also, there's been no word on what Toyota plans to do with its completed but unopened plant in Blue Springs, Miss.

Contech Closing North Carolina Plant

In late April Michigan-based Contech U.S., a maker of automobile components, announced it is permanently closing its plant in Albemarle, N.C. The closure will affect the jobs of 91 workers. 

Assembly Plant Total in the South Drops to 17 - Chrysler Closing St. Louis North Plant

As part of its plan for a quick restructuring under Chapter 11 protection, Chrysler announced it is closing one of its plants in the Southern Automotive Corridor. The Michigan-based automaker will close the St. Louis North assembly plant in Missouri in 2010. The plant builds Dodge Ram models and houses about 1,200 workers. The closure, the first in the South since two domestic plants closed in Georgia in 2006 and 2008 (GM and Ford), means that there are now 17 major auto assembly plants operating in the South. In addition, there are two that are being built (Kia in Georgia and Volkswagen in Tennessee) and one completed plant (Toyota in Mississippi) that is either waiting on economic conditions to improve to open or it is being shelved and sold to another user or to the State of Mississippi.

Automotive Parts Supplier Closing in Arkansas

Michigan-based Federal-Mogul announced in the spring quarter it will close its plant in Dumas, Ark. The company employs 107 workers at the plant.

Volkswagen announces it will Double Chattanooga Production

At the beginning of May, Jill Bratina, VW Group of America's director of corporate communications announced that VW plans to double output at its plant that is now under construction in Chattanooga. The German automaker originally called for 150,000 vehicles to be produced annually at the Chattanooga facility. That number is now expected to be 300,000 during the first year of operation. VW has a goal to sell 800,000 units in the U.S. by 2018.

Straehle + Hess Expands in Alabama

Germany-based Straehle + Hess (S + H), a company that specializes in high-end textiles for the automotive industry, is expanding its Auburn, Ala. operations. The company is moving from Auburn's business incubation center to an existing building in the Auburn Technology Park North, creating 20 jobs. S + H was recently awarded a new contract by Mercedes-Benz.

Kansas, Goodyear Agree on Proposal for Topeka Plant

In the spring quarter, The Kansas Department of Commerce announced that it will provide up to $14.2 million in training incentives to The Goodyear Tire & Rubber Co., allowing the company to make capital investments of up to $250 million at its Topeka plant and retain up to 1,400 employees for 10 years.

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