October 2017

For real-time news on business, politics and economic development in the South, go to www.RandleReport.com. For all projects announced in the South, go to www.SB-D.com. For more information on the automotive industry in the South, go to www.SouthernAutoCorridor.com.

Kamtek opens expanded Birmingham plant
Kamtek, a division of Magna, opened the $60 million, 150,000-square-foot expansion of its automotive parts facility in Birmingham, Ala., in the summer quarter. The project will add 100 workers to the plant, which currently houses 850. The company makes aluminum castings for vehicles made by Mercedes-Benz, Volkswagen and Nissan.

BMW celebrates 4 millionth vehicle made in South Carolina
In the summer quarter, BMW celebrated the 4 millionth vehicle made at its plant in Greer, S.C. The plant began making vehicles at the plant in 1994.

Brazilian manufacturer to open first U.S. facility in rural Virginia
Koinonia, a manufacturer of foam and tape solutions for the automotive, marine and heavy equipment industries, is investing almost $5 million in a new plant in Pulaski County, Va. The plant will house 40 workers.

Vehicle glass manufacturer expands in Virginia
Oran Safety Glass, a maker of specialty glass used in the manufacture of buses, military vehicles and trains, is expanding its Greensville, Va., operation. The $4.4 million project will create 55 jobs and retain 75.

German auto supplier launching new operations in South Carolina
Isringhausen, a seating systems manufacturer, is launching new operations in Charleston County in Ladson, S.C. The company, which has 50 plants in 20 countries, will make seats and assemblies for the Mercedez-Benz Vans Sprinter model.

Another megasite planned for the American South
The South is certainly not in short supply of large industrial sites of 1,000 acres or more. Add another one to the mix, this one in Chesterfield County, Va. Right before the recession a master-planned community in Chesterfield that would have contained 2,449 single-family homes, 1,331 condos, 908 apartments and 470,000 square feet of commercial space was announced. Called Branner Station, the plan was nixed by the Great Recession. Now Chesterfield wants to develop the wooded property as a 1,700-acre megasite for a large user such an an automotive or aerospace plant. The site is near Interstate 95 and the Port of Richmond.

Auto supplier expanding in West Georgia
Hyundai Dymos is adding 150 jobs to its workforce of 350 in West Point, Ga., near the Kia assembly plant. The $9.5 million expansion will add car seat capacity. The company makes seats for both the Kia plant and Hyundai’s plant in nearby Montgomery, Ala.

Has Alabama’s ROI in the automotive sector paid off?
By Michael Randle
In September 1993, the state of Alabama was highly criticized for the $253 million incentive package it gave Mercedes-Benz to locate its first plant in the U.S. in Tuscaloosa County. Alabama offered a package that was double that of what South Carolina had given to locate BMW just a year earlier.

Then in 1999, Honda announced it, too, would build a plant in Alabama. . .this one in East Alabama. That initial package totaled $158 million. In 2002, Hyundai followed Honda with its own plant announcement in Montgomery. Alabama’s initial package to Hyundai was $234 million.

Counting second and third incentive packages for expansions, the total Alabama has given out in site prep, training, tax breaks and other incentives is less than $1 billion for the three automakers.

So, to more easily understand the return on investment, let’s eliminate anything Alabama could have received from the three automakers, including the attraction of more than 250 suppliers to the state, tax generation, multipliers, spin-off jobs and anything else that’s difficult to calculate. Let’s just add up the payroll of the three automakers just at their facilities since they began operating. Why payroll? It’s something everyone understands because most of us are on a payroll.

SB&D’s estimated payroll since Mercedes, Honda and Hyundai have been operating their plants in Alabama is right at $12 billion. That’s a 12-fold ROI and that just counts payroll at the three assembly plants. What’s more, those plants will be operating 50 years from today.

Bus manufacturer expands Alabama plant
Canada-based New Flyer, North America’s largest transit bus manufacturer, is expanding its plant in Anniston, Ala. The company is investing $25 million and adding 40 new jobs.

Aluminum manufacturer investing $110 million in Tennessee
Sweden-based Granges, a manufacturer of aluminum products, is investing $110 million in its plant in Huntingdon, Tenn. to expand capacity from 160 to 200 metric kilotons per year. The company makes light gauge foil and automotive heat exchanger products. The deal will create 100 new jobs.

Japanese auto parts supplier to build new plant in Tennessee
Miyake Forging announced in the summer it will build a 45,000-square-foot facility in Hawkins County, Tenn. The bearings manufacturer will invest $13.7 million in the plant that will house 60 workers.

Alabama lands truck manufacturer
Autocar, a manufacturer of a wide variety of trucks, announced in the summer plans to build a $120 million facility near Birmingham, Ala. The plant will assemble heavy-duty, cab-over-engine trucks. The deal will create 746 jobs.

Racing  and auto parts manufacturer adding ops in Franklin, Ky.
Holley Performance Products, a top name in automotive racing and performance parts manufacturing, will establish a $9.15 million facility in Franklin, creating 30 full-time jobs.

Hino Motors Manufacturing expands in West Virginia
Japan-based truck maker Hino Motors Manufacturing will invest $100 million to relocate its assembly plant from Williamstown to Mineral Wells, W.Va. The company plans to purchase the former Cold Water Creek distribution center and convert it into a 1-million-square-foot truck assembly plant in Mineral Wells, close to its current plant.  The new plant will also house cab assembly, an operation currently conducted in Japan. The company’s president, Takashi Ono, said the move was necessary for growth and the addition of 250 employees.

Billion-dollar expansion for Mercedes-Benz in Alabama
Mercedes is spending $1 billion to make electric SUVs at its Tuscaloosa plant, as well as building a 1 million-square-foot battery plant, a logistics center and after-sales North American hub. Thanks to an earlier investment of $1.3 billion announced in 2015, the Tuscaloosa plant is currently being expanded to prepare for the production of the next-generation SUV including plug-in hybrid models. The expansion will create more than 600 jobs.

Toyota investing $374 million at five U.S. plants
Toyota Motor Corp announced a $374 million investment at five U.S. plants to support production of its first American-made hybrid powertrain. The upgrades at Toyota’s factories in Alabama, Kentucky, Missouri, Tennessee and West Virginia are part of a previously announced $10 billion in U.S. spending by the Japanese automaker.

Auto supplier JTEKT opens new plant in Tennessee
JTEKT recently held a grand opening for its new plant in Vonore, Tenn. The plant means 100 new hires for the Japan-based manufacturer of driveline and steering components.

Volvo will boost U.S. investment to $1.1 billion
Even before the first vehicle rolls off the line at Volvo Cars’ new factory in South Carolina, the Swedish automaker has nearly doubled its investment to $1 billion and promised to build a second vehicle — the next-Generation XC90 — at the site. Volvo says it will spend an additional $520 million and add nearly 2,000 more jobs, bringing total employment to nearly 4,000, to its plant under construction in Berkeley County, 30 miles northwest of the port in Charleston.

Bilstein Cold Rolled Steel opens new facility in Bowling Green, Ky.
A family-owned German manufacturer is beginning operations at its facility in Bowling Green. Bilstein Cold Rolled Steel expects to employ about 110 people at its plant, which broke ground in 2015. The company creates thin pieces of steel for a variety of industries.

Nokian Tires breaks ground on $360 million facility in Tennessee
Nokian Tires recently broke ground on its $360 million manufacturing facility in Dayton, Tenn., Rhea County’s largest foreign direct investment to date.

Borgwarner expanding in South Carolina
A manufacturer of automotive powertrains is expanding its facility in the Upstate. BorgWarner is investing $71.9 million and creating more than 160 new jobs at its plant in Oconee County, the third expansion to its Seneca plant since 2013.

BorgWarner investing $20 million, adding 75 jobs in Mississippi
Automotive supplier BorgWarner is investing $20 million and adding about 75 jobs during the next two years at its Water Valley facility. BorgWarner bills itself as a leader in clean technology solutions for combustion, hybrid and electric vehicles.

Metalsa Structural Products expands in Owensboro, Ky.
Automotive frame manufacturer Metalsa Structural Products will be adding 113 jobs at its Owensboro facility as part of a $36.5 million expansion. Metalsa plans to produce a new line of stamped and welded components.

Thrace-Linq expands South Carolina plant
Thrace-LINQ, a global supplier of fabrics for the textile industry and member of the Greece-based Thrace Group, will invest $9 million to expand its operations center in Dorchester County, S.C. The company will be adding a new production line and upgrading existing equipment to produce nonwoven fabrics used in a variety of applications, including geosynthetics, automotive, construction and floor covering.

Chinese automakers plan U.S. factory
Wei Jianjun, chairman of Great Wall Motor Co, said that the carmaker intends to set up a manufacturing presence in the US, in cooperation with two other Chinese car producers. “The three Chinese auto companies may test the waters by building a factory together,” Wei was quoted as saying, without naming the two other firms. A Beijing-based media group reports that three other Chinese automakers — Geely, Guangzhou and Chery – have all previously announced plans to enter the U.S. market. Geely and Guanzhou both said they were unaware of the plans, while Chery declined to comment. Wei described the move as “brand-building to sell cars in the US.” It also comes under a Trump administration eager to announce new manufacturing jobs.

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Michael Randle

Author: Michael Randle