Southern Auto Corridor News Fall 2004

Courtesy of www.SouthernAutoCorridor.com

QUIZ

How many major automotive suppliers (100 announced jobs or more or $10 million investment or more) have located in the Southern Automotive Corridor since January 1, 2003? (a) 158 (b) 292 (c) 71 (d) 49

(Scroll down for answer)

Honda Announces Transmission Plant in West Georgia

Honda Motor Co. announced in mid-November it is building a new 250,000-square-foot transmission plant in Tallapoosa, Ga. Tallapoosa is located on Interstate 20 just across the Alabama/Georgia state line, approximately 50 miles from Honda's large assembly plant in Lincoln, Ala. The Japanese automaker is spending about $100 million on the new transmission facility, part of a $270 million U.S. expansion plan. Over 400 jobs are expected to be created.

Honda Adding More Jobs to Alabama Plant

Japanese automaker Honda Motor Co. is hiring 100 additional workers for its assembly plant in Lincoln, Ala. The new employees will work at the company's engine plant, which is located on the site of the assembly operation. In five years, Honda has added more than 4,500 employees and invested approximately $1.3 billion at the Lincoln facility. The company is spending $70 million in this latest expansion.

Toyota Doubling North Alabama Engine Plant

Toyota officials announced plans to double the size of its engine plant in North Alabama. The deal represents an investment of $250 million and will increase employment at the facility from 365 employees to about 800. The plant produces engines for the Toyota Tundra pickup truck and the Sequoia SUV. Both V8 and V6 engines will be made at the expanded facility. The new $250 million investment raised the total the Japanese automaker has invested in the Huntsville site at $490 million. The facility opened in the summer of 2003. Engines produced at the plant will be delivered to Toyota assembly plants in Indiana and Texas.

Editorial

Toyota to Build Seventh N.A. Plant

In November, Toyota officials announced they are going to build a new North American assembly plant, the Japanese automaker's seventh. Problem is, they didn't tell anybody where they would build it or when.

In the Fall 2002 edition of Southern Business & Development, we reported on the then yet to be announced Toyota assembly plant, which happened to be the sixth to locate in North America. Experts had already published their predictions and each and every one picked San Antonio for the Tundra pickup truck plant that Toyota was searching a site for in 2002. We gave our pick in the Fall 2002 edition of SB&D. We proudly claimed, prior to revealing our choice of where Toyota would locate their latest plant, that this magazine had accurately picked the site for all of the previous automaker plants announced in the South except for one. But at least the one we got wrong, we got the state right.

Yes, we nailed where BMW (1992), Mercedes-Benz (1993) and Hyundai (2002) would build their plants in the Southern Auto Corridor ( www.SouthernAutoCorridor.com ). And with Honda (1999), we picked Opelika, Ala. That plant went up the road to Lincoln, Ala.

Now, back to Toyota's seventh assembly plant in North America, which they officially acknowledged in November. In the Fall 2002 edition of SB&D, we did make our prediction on the Toyota plant that was the biggest deal swirling about at the time. We wrote, "So where is Toyota going to build their plant? Is it going to be built in San Antonio or Marion, Ark? It's going to be built in San Antonio ... and Marion, Ark. That's right, two plants with the Marion plant announced about two years after Toyota announces in San Antonio."

Well, here we are, at the time of this writing, one year and nine months from Toyota's February 2003 announcement of their sixth assembly plant in San Antonio. Will Toyota announce its seventh North American plant in Marion, Ark. in February of 2005? No. But all indications say they might announce Marion as the site once Hino Motors, an affiliated company, gets up and running in northeastern Arkansas in the third quarter of 2005. In other words, we still stand by our call that Toyota will announce its seventh North American plant in Marion, Ark., even if it's a little later than we predicted in 2002.

Mike Randle (mike@sb-d.com)

GM Closing Baltimore Assembly Plant

The closure of GM's Baltimore assembly plant has been rumored for years now. Officials with GM made it official in November when they announced the facility will close in 2005 at the end of a four-year contract with the United Auto Workers. The plant produces two van models that are being dropped by the automaker. About 1,100 workers currently are employed at the facility. GM built the Baltimore plant in 1935.

ALABAMA

French Part Supplier Picks North Alabama

Electricfil Automotive is investing over $5 million on a new facility in rural Elkmont, Ala. The 37,500-square-foot facility is the first in the U.S. for the Lyon, France-based parts supplier. The deal is expected to create 75 jobs.

Delphi Closing South Alabama Plant

Officials with Delphi Corp. announced in late November the company is closing its Mechatronic Systems plant in Foley, Ala. About 170 workers will lose their jobs, however some will be offered jobs at other Delphi facilities.

Mercedes Building Warehouse

A parts warehouse larger than 11 football fields is being built in Vance, Ala., to supply parts to Mercedes-Benz dealerships throughout the U.S. The 518,000-square-foot warehouse will replace a warehouse that Mercedes now uses in Bessemer, Ala. The parts center will house about 100 workers.

Teksid Hiring 100 More in Sylacauga

Teksid Aluminum Components, a auto parts supplier to several OEMs, is expanding its Alabama plant for the third time in four years. Teksid is investing $26.7 million to expand its operations in Sylacauga in order to fulfill a new contract the company signed with Ford Motor Co. About 100 jobs will be created, bringing total employment to 625.

Oxford Hiring 225 More Workers

Oxford Automotive's new plant near Birmingham is gearing up to supply the next generation Mercedes M-Class with welded underbody assemblies. As it does, the Tier one supplier is hiring 225 more workers to increase employment to 400 at the facility. The expansion comes at a time when the Michigan-based automotive supplier has announced that as many as 30 of its parts plants around the world are up for sale. Oxford's Birmingham area plant apparently will not be affected. The supplier has a seven-year contract with Mercedes-Benz. The plant also makes parts for Nissan's assembly plant in Canton, Miss.

Borgers USA Opens

Tier 1 supplier Borgers USA has opened its parts plant in Tuscaloosa. Borgers invested over $6 million in the deal and is creating over 50 jobs. The Mercedes-Benz vendor is making rear compartment interior trim for SUV models made at Mercedes' Vance, Ala. plant.

ARKANSAS

Parts Maker Adding Over 100 Jobs

Mid-South Manufacturing, a producer of water pumps for the automotive industry, is adding 110 jobs in Marked Tree, Ark. The company has been a major employer in the Northeast Arkansas Delta region since 1971. The $3 million expansion will raise Mid-South's work force to almost 500 in Marked Tree.

Utility Trailer Expands

Utility Trailer Manufacturing is hiring 100 workers as it expands its dry van trailer facility in Paragould, Ark. The company is investing $4 million in the transaction and adding a new 80,000-square-foot assembly line.

Quanex Expanding in Fort Smith

Houston-based Quanex Corp., a metals manufacturer for automotive suppliers, is increasing its Fort Smith, Ark. Macsteel's plant capacity by 40,000 tons. That will bring total shipping capacity at the factory to more than 1.3 million tons annually.

FLORIDA

ACS Hiring 150 in Boynton Beach

ACS Industries, a Rhode Island-based automotive products supplier has purchased a 40,000-square-foot industrial building in Boynton Beach, located in Palm Beach County. The company is expected to hire 150 workers at the site. ACS operates its other plants in Rhode Island, Michigan and Texas.

JAXPort's Vehicle Handling Supports 2,000 Jobs

A study done by a Pennsylvania consulting firm shows that the handling of vehicle imports and exports at the Jacksonville port generates $152 million in annual wages and investment and is responsible for over 2,000 jobs. The port handled 544,062 vehicles last year.

GEORGIA

There's Talk on the Street DC May Come Back to Savannah

Don't put a lot of confidence in this, however, we've heard from more than one source that DaimlerChrysler may be taking a second look at building an assembly plant at the site that it nixed in 2003 for a Sprinter Van plant. If you recall, then Georgia Gov. Roy Barnes announced that DaimlerChrysler would build a large truck assembly plant on a site located on the northwest corner of I-95 and I-16 in Pooler, Ga., located just west of Savannah. But when Barnes made his announcement public, officials from DC were no where to be seen. Later, DC officials did admit they would build the plant in Pooler if market conditions were ripe for the product. After a $1 billion quarterly loss at the time, the company decided to cancel the proposed plant. The sources we've heard from that say DC is looking again at Savannah are located in Savannah, however are not affiliated with any economic development organization in Georgia. The sources come from the commercial real estate industry in Savannah. Apparently they have received some calls from potential vendors to DC. Interestingly enough, our sources told us the new plant, if built, would assemble cars not trucks.

KENTUCKY

Tire Plant Halting Production

North Carolina-based Continental Tire North America is halting tire production at its Mayfield, Ky. plant at the end of this year. Officials with the company said negotiations with the United Steelworkers of America, which represents the workers at the plant, broke down during the fall quarter. The shut down of tire production will eliminate almost 1,000 jobs at the facility.

LOUISIANA

New Hummer H3 Line to be Built in Shreveport

General Motors announced in late October it would build the new generation Hummer H3 at its plant in Shreveport, La. GM will invest about $250 million in the facility it has operated in Northwest Louisiana since 1981. The Hummer expansion brings GM's investment in Shreveport to over $1 billion.. The new H3 is a smaller version of the Hummer model and is expected to arrive in showrooms in late 2005. The expansion will add about 300,000 square feet of manufacturing space and about 300 new jobs to the existing work force of 3,200. The Shreveport facility also produces Chevrolet and GMC trucks.

MARYLAND

Mercedes Increasing Shipment at Maryland Port

Mercedes-Benz USA has announced it will ship about 160,000 cars and trucks through the Port of Baltimore, almost doubling its annual shipments at the port. Mercedes is taking over the former 100-acre Toyota Motor Sales USA site, part of a 20-year agreement struck with the Port of Baltimore. The increase in shipments will support 330 jobs and bring in approximately $3.6 million in state and local taxes annually. The Port of Baltimore is the second-largest handler of autombiles in the nation with about 550,000 cars or trucks rolled on or rolled off.

NORTH CAROLINA

German Automotive Company Expanding in Charlotte Region

Getrag Gears announced an $81 million expansion of its manufacturing facility in Catawba County. The Germany-based maker of gears, transmissions and axles for the automotive industry opened the facility, located in the town of Maiden, in 1986. Getrag plans to add 302 new jobs.

Volvo Truck N.A. May Add 150 Jobs in Greensboro

Heavy-duty truck manufacturer Volvo Truck North America, has applied for state and local incentives as it expands its headquarter operations. The company wants to hire 150 additional workers at its North American headquarters, which is located in western Greensboro.

Freightliner Sold Out for the Next Six Months

A rising freight industry has helped Freightliner and its three heavy-duty truck assembly and parts plants located in the Charlotte area. Trucks coming off Freightliner's N.C. assembly lines already have buyers and are sold out until around March of 2005. In 2004, the truck maker added almost 1,000 workers at the three facilities, bringing employment to over 5,500.

N.C. Motorsports Industry Worth $5B Annually

A study done recently by the Sanford Holshouser Business Group indicated that North Carolina's motor racing industry is responsible for about 25,000 jobs in the state with an financial impact of over $5 billion annually. North Carolina is home to over 80 percent of Nextel Cup racing teams, 55 percent of Craftsmen Truck teams and 72 percent of Busch Racing Series teams.

SOUTH CAROLINA

BMW May Build Sports Wagon in S.C.

German automaker BMW is considering assembling its new sports wagon at its plant in Greer, S.C. BMW officials cited the low U.S. dollar as a primary factor for building the model in the U.S.

Freightliner Supplier Expands in S.C.

Truck Equipment Manufacturing Co. (TEMCO) anounced in the fall quarter a new plant in Cherokee County. The project will initially include a 30,000-square-foot building on a 25-acre site. The capital investment will total $3 million and the plant will employ around 30 workers. TEMCO is a truck parts supplier to Freightliner's plants in North Carolina. The company specializes in aluminum and steel air tanks.

Alemite Corp. Relocates to Lancaster County

Alemite Corp., a producer of lubrication and fluid handling equipment for the automotive industry and others announced plans in November to relocate its international corporate headquarters from Charlotte to Lancaster County, S.C. The company will invest $2.5 million in the move, which is expected to create 45 jobs.

TENNESSEE

Parts Supplier Expands in Northeast Tennessee

Renold Jeffrey, Inc., is expanding its cam-drive and timing chain plant in Morristown. The company is adding 110 workers and investing over $7 million in the deal. Renold Jeffrey is a subsidiary of Renold plc, a worldwide company that began in the United Kingdom in 1873.

Michigan Supplier Picks Cookeville

MP Components, headquartered in Grand Rapids, Mich., announced in the fall quarter that it is creating 50 new jobs in Cookeville, Tenn. The supplier produces checking fixtures such as automated gauges.

TEXAS

Koyo Steering Breaks Ground in Ennis

Koyo Systems, which operates several plants in the Southern Auto Corridor ( www.SouthernAutoCorridor.com ), broke ground on its new steering systems manufacturing facility in Ennis, Tex. The Japanese auto parts supplier is investing $30 million in the project, which is expected to create 200 new jobs.

GM to Idle Texas Plant for Three Weeks

As a result of growing inventories, officials with General Motors have announced that their Arlington, Tex. SUV plant will temporarily close for at least three weeks in 2005. The plant will shut down during the weeks of Jan. 3, Jan 10 and March 14. During the shutdown, new equipment will be installed at the plant, where the GMC Yukon, Chevy Suburban and Tahoe and Cadillac Escalade models are assembled.

WEST VIRGINIA

Spanish Auto Parts Supplier Locates in W.V.

CapreWest, a project of Grup Capresa, a Spain-based group of metallurgy sector companies, announced in November it is opening its first U.S. production facility in Huntington , W.Va. The new plant will output steel bars, supplying Allevard Springs USA in the production of automotive suspension parts. The $1.2 milllion deal is expected to create 20 new jobs.

QUIZ ANSWER

From Jan. 1, 2004 to the end of November 2004, 73 significant automotive parts suppliers announced expansions or new facilities in the Southern Auto Corridor. And in calendar year 2003, 85 major parts suppliers announced projects in the SAC, so the answer is (a) 158.