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 Southern Auto Corridor News

August 5, 2008

Nissan to Trim Work Force in Tennessee

Nashville-based Nissan North America said in late July it will offer $100,000 to $125,000 cash buyouts to about 6,000 employees at the company's engine plant in Decherd, Tenn., and its large assembly factory in Smyrna, Tenn. The plan is being put in place to trim the Japanese automaker's work force by about 1,200 workers in the Volunteer State. Nissan official Fred Standish described the move as not being a layoff, saying, "We have never laid off anybody in Smyrna and we don't intend to now." The Smyrna plant, Nissan's largest in North America, has been in operation for more than 20 years. The cuts do not affect the company's Canton, Miss. plant. With truck sales dropping significantly, Nissan will also eliminate a second shift on its Smyrna pickup truck assembly line.

ArvinMeritor Expanding in North Carolina

In the early summer, ArvinMeritor announced it is expanding its Scotland an Henderson County facilities. Michigan-based ArvinMeritor manufactures drivetrains, braking, suspension and chassis systems, as well as wheel and ride-control products. The company operates four plants in North Carolina. The $33.7 million expansion will create 67 new jobs at the two plants.

Korean Supplier Creating 350 Jobs in Columbus, Ga.

DongNam Tech announced in the summer that it is locating its first U.S. plant in Columbus, Ga., creating 350 new jobs with an investment of $29 million. The company will supply automakers thoughout the Southern Automotive Corridor with carpet and floor mats. DongNam Tech will operate as DNT Georgia and will build a 100,000-square-foot facility in the Muscogee Technology Park. The Korean parts supplier announced it will supply products to KIA, which is finishing up its new assembly plant in nearby West Point, Ga., as well as Hyundai, GM and Nissan. 

KIA Supplier Creating 50 New Jobs in Alabama

SMI Auto USA, announced on July 24 the location of its first U.S. manufacturing operation in Auburn, Ala. SMI, established in Korea, is a supplier of small stamping automotive parts used by KIA. KIA is building a large assembly plant nearby in West Point, Ga. The deal is expected to create 50 jobs with an investment more than $5 million.

Glovis Announces New Facility in West Georgia

Seoul, Korea-based Glovis, will be a key logistics provider to the Kia Motors Manufacturing Georgia (KMMG) facility that is being built in West Point, Ga. In the early summer quarter, Glovis announced it will build a 558,131-square-foot facility at the Kia plant site in West Point. The company will supply auto parts and provide inventory management to the KMMG vehicle assembly line. The just-in-time parts management facility is expected to house 600 workers.

New York-Based Automotive Group Relocating Headquarters to Georgia

Asbury Automotive Group, an automotive retail and service company based in New York, announced on July 31 that it is moving its headquarters to the metro Atlanta market of Duluth. The cost-cutting move will create about 70 news jobs in the Atlanta area with an average annual salary of $100,000.

Mando America Expanding in Alabama

Mando, one of Korea's largest parts suppliers, announced in mid-summer it is investing $25 million to expand its facilities in Opelika, Ala. The company produces brake and steering systems for Hyundai and KIA. Both plants are located nearby in Montgomery and West Point, Ga. In the summer of 2004, Mando relocated its North American headquarters from Detroit to Opelika. The expansion to the company's manufacturing facilities in Opelika will result in 200 new jobs to be added the the 400 already working for the company in Opelika.

South Korean Company Picks Kentucky

INFAC Corporation, a worldwide supplier of mechanical cables and electronics components for the automotive industry, announced in mid-summer it will locate a distribution and sales center in Taylor Co., Ky. The project, which will employ approximately 75 workers, will support North American original equipment manufacturers (OEMs). The South Korean-based company expects to begin manufacturing emergency brake cables in the Cambellsville Industrial Park in the fourth quarter of this year.

WKW Erbsloeh N/A Opens First U.S. Plant in St. Clair County, Ala.

WKW Erbsloeh North America officially opened its new plant in Pell City, Ala., which is located in St. Clair County, east of Birmingham. The new plant will produce aluminum parts for the Mercedes-Benz assembly factory in Vance, Ala., the Volkswagen facility in Mexico and in 2009, parts for BMW in South Carolina. Obviously WKW has set its sites on serving other automakers in the Southern Auto Corridor, including Volkswagen once that plant is operational in 2011. WKW is expected to hire up to 300 new employees and will invest at least $30 million in the project.

Incentives for Supplier in Birmingham

The Birmingham, Ala., City Council approved a $4 million package of incentives for Kamtek, a division of Canadian parts supplier Magna International. Kamtek recently purchased the Birmingham operations of Ogihara America and announced shortly after the acquisition that it will infuse $300 million into the facility and hire another 400 workers to the current employee base of 280.

SafeAuto Insurance to Locate New Contact Center in Somerset, Ky.

SateAuto Insurance Co., will create about 263 new jobs at a new sales and customer service center in Somerset, Ky. The new deal will also include a backup data center. An annnual payroll of $7.3 million is expected from the project. 

Auburn University Launches Automotive Engineering Program

Auburn University has launched a new program to train engineers and management personnel for Alabama's automotive industry, the lastest effort by state educators to prepare students for critical, high-value jobs in vehicle assembly plants. Auburn is implementing an automotive industry manufacturing engineering minor, a study that teaches skills needed for upper-level and mid-level management posts in factories such as those that continue to be lured to the Southern Automotive Corridor. Auburn is already known for supporting the automotive industry. Its Center for Advanced Vehicle Electronics, or CAVE, provides research for a number of automakers. According to the Bureau of Labor Statistics, engineers employed at motor vehicle assembly plants earn in the range of $70,000 a year, while those on the management level take home yearly pay that tops six figures.

Huyundai Slowing U.S. Production

After reporting in the spring quarter it did not expect to slow production this year at its plant in Montgomery, Ala., Korean automaker Hyundai said it will reduce its U.S. output by 40,000 units, or about eight percent this year. Hyundai officials said in mid-summer they will cut production of the Sante Fe SUV model and raise production of the Sonata small sedan model, which it also produces in Alabama. Hyundai's plant in Alabama is the only facility where the company assembles vehicles in the U.S. Hyundai also reported in late July that it earned a net profit of $541.9 million in worldwide sales in the second quarter.

Mercedes-Benz to Decrease Output in Alabama

German automaker Mercedes-Benz announced in the summer quarter it is scaling back production at its Alabama plant by increasing the number of days it typically shuts down for the Thanksgiving and Christmas holidays. The company will also eliminate six Friday night shifts by the end of the year. Sales of the M-Class SUV, Mercedes' most popular model made at the plant, are well ahead of last year's totals. However, the other two vehicles assembled at the Alabama facility -- the G-Class and the R-Class -- are behind last year's sales totals. The company expects no layoffs at the plant this year.

Ford Announces Retooling of Kentucky Plant at the Same Time it Announces Loses of $8 Billion in Second Quarter

Michigan-based Ford Motor Co. announced in the summer quarter it lost $8.67 billion in the second quarter of 2008. The total was the worst quarterly loss in the company's history. The company also reported it will retool three of its North American plants, including its Louisville, Ky., assembly plant, to produce six new small vehicles that are currently available in Europe, but not yet in the U.S. The Louisville plant has produced the Ford Explorer since 1990. According to Bill Russo, manufacturing manager for Ford's North American car, SUV and crossover vehicle lines, the company will have the Louisville facility retooled for small car production by mid-2010. Explorer model production is expected to be moved to an existing plant in Chicago. Ford also announced it is moving production of its Ford Expedition and Lincoln Navigator SUV models to its other plant in Louisville from a plant in Michigan. Combined, the two Kentucky plants employ about 6,000 workers.

Toyota to Build Prius Model at Mississippi Facility

When Kia announced in the late spring 2008 quarter that it would build a different model at its assembly plant being built in West Point, Ga., we described the announcement as "unprecedented." We had never heard of an automaker switching models before an assembly plant had even been completed. Now Toyota has done the same thing with its new plant going up near Tupelo, Miss. The Japanese carmaker announced in the spring that it was delaying the production date of its new SUV facility. In July, Toyota officials dropped a bomb by announcing that it will not produce the Highlander SUV model in Mississippi, but rather the hybrid Prius model. Production of the small Prius is expected to begin in late 2010. Toyota already assembles the Camry hybrid at its facility in Georgetown, Ky. The Prius will join the Camry as the only two hybrid vehicles built in the U.S. by Toyota. Toyota also announced it is moving production originally planned in Mississippi for the Highlander SUV to an existing plant in Indiana.

Toyota Suspends Truck Production in Texas

Toyota announced in the early summer it is suspending production of its Tundra pickup truck model in San Antonio for three months beginning August 8. The Tundra is the only model produced in San Antonio plant. By spring of 2009, Toyota will move all Tundra production to San Antonio. The Tundra is also made at the Japanese automaker's Princeton, Ind., plant. The Highlander SUV model, originally slated for assembly at it plant now under construction in Tupelo, Miss., will be moved to Princeton.

No Layoffs at Hino in Arkansas

Toyota subsidiary Hino Motors Manufacturing USA announced in late July that there will be no layoffs at its components plant in Marion, Ark., despite the fact that Toyota is suspending production of Tundra trucks in San Antonio the Sequoia SUV at plants outside the Southern Auto Corridor. Hino officials did say that its Marion facility will reduce parts production indefinitely and employees at the facility will work a reduced schedule. Hino manufactures, among other products, axle and suspension parts for Toyota's San Antonio facility.

Nissan Moves into New Nashville Headquarters

In early July, Nissan began moving into its new North American headquarters located in Cool Springs, Tenn., just south of Nashville. The opening of the $100 million facility marks the end of the Japanese automaker's relocation of its North American headquarters from the Los Angeles area to central Tennessee. About 1,500 employees will work at the new 10-story, 450,000-square-foot headquarters building.

U.S. Vehicle Sales Hit 10-Year Low in June

In June, 1,189,108 cars and light trucks were sold in the U.S., the lowest total in more than 10 years and 18.3 percent below June of 2007 totals. Larger vehicles such as SUVs, pickup trucks and minivans saw a significant drop in sales, with the Dodge Ram (--48%) and Ford F-Series pickup truck (--40.5%) at the top of the nuked list. Meanwhile, the Honda Accord (up 37.3 percent in sales from June 20070, Toyota Corolla, Honda Civic, Chevrolet Cobalt, Ford Fusion and Hyundai Sonata brands saw healthy increases in sales in June compared to last year.

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