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 Southern Auto Corridor News

December 9, 2009

Mercedes Bringing C-Class Sedan to Alabama, Adding 1,000 Jobs

Daimler announced plans in early December to move production of its C-Class sedan to its Mercedes-Benz assembly plant in Vance, Ala. in 2014. The Alabama plant currently assembles the M-class, R-class and GL crossover and SUV models. With the sales collapse of SUV models the plant has seen reduced volumes over the last two years. The addition of C-Class production will add 1,000 to 1,200 new jobs at the Alabama plant. 

Volkswagen Expects Nine Companies in Supplier Park

Over 100 executives of potential parts suppliers to the VW plant being built near Chattanooga recently visited sites located adjacent to the assembly plant. Volkswagen is developing a parts supplier park next to its auto plant in the Enterprise South Industrial Park. Frank Fischer, Chattanooga VW president, reported that he expects nine companies to locate in the supplier park. Fischer also confirmed that VW is considering building a large distribution center within a 20-mile radius of the new plant.

Kia Hiring 1,200 More Workers in Georgia

Kia Motors, which opened its plant in West Point, Ga. in November, announced it will hire another 1,200 assembly line workers for a second production line that will be operational in early 2010. Currently, the Korean automaker employs about 2,500 workers at its new Georgia plant that rolled out its first Sorento cross-over vehicle in the fall quarter.

VW's First Year Sales Goal for Tennessee-Made Car

In the fall quarter, German automaker Volkswagen said that it expects to sell 130,000 of its new sedan model that it is preparing to assemble in Chattanooga, Tenn. when the plant opens in 2011. The new mid-sized sedan, which will be larger than VW's Passat model, will be priced at about $20,000. VW officials said they expect to sell about 30,000 of the vehicles in Canada and Mexico. The company is also considering assembling Audi models in Chattanooga. The Tennessee plant is part of VW's goal of selling one million cars and SUVs in the U.S. by 2018. Currently, that figure is just over 200,000 vehicles sold in the U.S.

Kia Generating Over 3,600 Jobs in Neighboring Alabama

According to a report from the Alabama Development Office, Kia's new plant in west Georgia has created more than 3,600 jobs in neighboring Alabama, where dozens of Korean parts suppliers operate existing plants supporting Hyundai's assembly plant in Montgomery. The report stated that when the Kia plant opened for business in November, 12 new parts suppliers, 22 existing supplier expansions and $704 million in capital investments had been made in Alabama as a result of the Kia plant. The 3,600 new jobs do not include Alabamians that are working at the Kia plant or at its parts suppliers in Georgia. Kia is a sister company to Hyundai and many of the supplier expansions have been at plants that now serve both assembly facilities.

Finally, Business is picking up in the Southern Automotive Corridor

In the fall 2009 quarter good news bestowed the South's automotive industry. We saw more suppliers add jobs last quarter than we’ve seen in quite a while. There were also several important OEM announcements as automakers gear up for a recovery that could result in 11 to 13 million vehicles sold in the U.S. in 2010.

In the fall quarter, Mercedes-Benz announced it is bringing C-Class production to its Alabama plant, Kia opened its first U.S. assembly plant in west Georgia; GM added a third shift in Kansas; Toyota said it is moving its California production to Texas; Nissan broke ground on its $1 billion lithium-ion battery plant in Tennessee; VW continued building its new factory in Tennessee unabated; Toyota announced more work at its engine plants in West Virginia, Tennessee and Alabama; the Chinese company that bought Hummer said it will continue to assemble the brand in Louisiana; and two Chinese-linked start-up automakers revealed their hopes in Mississippi and Alabama. Add to that the V-Vehicle start-up in Louisiana that was announced in mid-summer and what you get is the most active OEM period in the Southern Automotive Corridor in at least three years, maybe longer.

The Japanese (Honda, Toyota and Nissan), the Koreans (Kia and Hyundai), the Germans (BMW, Mercedes-Benz and Volkswagen) and possibly the Chinese, are all preparing for not only next generation vehicles in the South, but to grab their own shares of the what will be the lost sales of GM and Chrysler in the near future. In 2008, GM owned almost a quarter of the U.S. sales market, or about 3 million vehicles sold. Chrysler sold about half of GM's total in 2008.

Some are predicting that 2010 will match 2008 in total vehicle sales here in the U.S. If that is the case, how could a collapsed GM and Chrysler even come close to 4.5 million sales of its models in 2010? They won't. We predict that GM, with just three brands and Chrysler will sell about 2 million cars and light trucks in the U.S. in 2010. That means, if we get back up to 13 million vehicles sold annually in 2010 or 2011, other automakers will have to replace GM's and Chrysler's future lost sales. That figure is going to be significant. It could total 2.5 million vehicles annually by 2011 or 2012. For more information on the South’s automotive industry, go to www.SouthernAutoCorridor.com.  

mike@sb-d.com

Hitachi Automotive Expanding in Kentucky

In the fall quarter, Hitachi Automotive Products USA announced it will expand its Harrodsburg, Ky. operation, adding a new fuel system production line to the plant. The expansion could also result in an additional product line for hybrid electric vehicles. Hitachi Automotive opened its Harrodsburg plant in 1986 and manufactures electromechanical automotive parts. The company's plant has grown from 40,000 to 400,000 square feet and this latest expansion will add 100 new workers to the payroll of 600.

Timken Announces New Distribution Center in South Carolina

Friction management and power transmission manufacturer Timken announced in the fall quarter it is investing $3 million and bringing 100 new jobs to Spartanburg County, S.C. The company is moving into a larger space in Duncan, S.C. and adding to the 50 employees it currently has in Spartanburg.

Web Site Reports Bridgestone will Supply Tires for VW

In November, TicosLand.com, a Costa Rica-based Web site, reported that Bridgestone Costa Rica will produce 200,000 spare tires for the VW plant in Chattanooga and the company will produce the other tires for the car at its plant in Wilson, N.C.

Canadian Company Adding Workers in Rural Tennessee

Active Burgess, headquartered in Ontario, is expanding its precision moulds facility in Tullahoma, Tenn. The company produces plastic injection tooling projects for various uses in the automotive industry. The deal will result in 15 new jobs.

Coatings Manufacturer Announces New S.C. Facility

Mankiewicz Coatings LLC, a subsidiary of Germany-based Mankiewicz Gebr & Co., which manufactures high-quality coating systems for the automotive industry and other sectors, announced in December it will locate a new plant in Berkeley County, S.C. The $2 million investment is expected to generate 25 new jobs.

Toyota to Produce RAV4 Engines in W.Va.

In the fall quarter, Toyota Motor Corp. announced it will produce about 2,000 RAV4 six-cylinder engines a month at its plant in Buffalo, W.Va. The West Virginia plant also produces four-cylinder engines for the Toyota Corolla and Matrix and six-cylinder engines for the Highlander, Sienna and Lexus RX-350 models.

Kamtek Lands Volkswagen Parts Contract

Kamtek, an Alabama parts supplier to Mercedes-Benz, Nissan and Freightliner, landed a contract in late November to produce parts for the new Volkswagen plant being built in Chattanooga. The value of the contract and the work is not known as of this writing. Kamtek, which stamps parts such as fenders at its Birmingham, Ala. plant, is undergoing a $310 expansion. The plant has about 300 workers, but plans are to add as many as 300 more during the expansion.

New Automotive Supplier Bringing 195 Jobs to Alabama

Faurecia North America, a subsidiary of France-based Faurecia and one of the world's largest automotive parts suppliers, announced in late November it plans to build a $15 million plant in Tuscaloosa County, Ala. The deal represents 195 new jobs. The company will be a just-in-time supplier of parts to the Mercedes-Benz plant in Vance, Ala. Faurecia's major automotive products are exhaust systems, front ends, seats and interiors.

New Parts Supplier Picks Anniston, Ala.

Ohio-based Industry Products, Co. is setting up shop in Anniston, Ala. to supply the Honda plant in nearby Lincoln. The company's key product lines include water shields, trunk and cargo area systems and noise and vibration components. About 25 jobs will be created initially with the project.

Michelin Development Opens Alabama Office

Michelin Development recently opened an office in Opelika, Ala. to begin taking applications for $2 million in low-interest loans to qualified start-up and small businesses in East Alabama. The program, the second of its kind in North America, aims at stimulating economic growth and creating jobs in the area to offset over 1,000 jobs eliminated by the company when it announced it was closing the BF Goodrich tire plant in Opelika. BF Goodrich is owned by Michelin. The first Michelin Development office opened in Canada and over 800 jobs have been created by the program there.
 

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