The Truth About Cars » Alabama The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 15 Jul 2014 12:30:48 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Alabama Mercedes Will Expand Alabama Factory With ML-Coupe Production Fri, 20 Jun 2014 10:00:12 +0000 450x298xmercedes-concept-coupe-suv_web-450x298.jpg.pagespeed.ic.MiR3pxGn9V

Good news for the people of Alabama: Mercedes-Benz is hiring. Bad news for car enthusiast. This abomination is going into production.

Mercedes will expand capacity at their Alabama plant, from about 185,000 cars, to an undisclosed level. Automotive News Europe reports that BMW is expanding American production to 450,000 units, though there’s no indication if Mercedes-Benz will follow suit, though the expansion will apparently be a “significant number” above current levels. With the addition of the C-Class and the new ML Coupe (shown in concept form above), Mercedes will likely expand in a big way, since these models offer the potential for big volume and big profit. Mercedes once built the R-Class in Alabama, but the new models should have no trouble absorbing that capacity.

]]> 46
Mercedes-Benz Employees Tell The UAW To Get Packing Mon, 02 Jun 2014 13:46:17 +0000 28_Millionth_Vehicle_at_Plant_Tuscaloosa

Frustrated by the lack of results brought by the UAW, a group of Mercedes-Benz employees located at their Alabama factory is seeking to replace the UAW as their partner in organizing the plant. is reporting that two Mercedes employees who are leading the push for unionization have come out publicly against the UAW, after a long organization drive failed to produce any results. According to, as many as 30 percent of hourly workers had signed union cards, but the number was insufficient for the UAW.

Mercedes employee Jim Spitzley was critical of the union, stating

“It’s all about the image with the UAW, and it’s not about the workers,”

Spitzley and colleague Kirk Garner are courting other unions, including the International Association of Machinists and Aerospace Workers, but the AFL-CIO has granted the UAW with exclusive jurisdiction over the Alabama facility, which means that other unions can’t take over the UAW’s organization drive. Both Spitzley and Garner have asked for a change, but have received no response.

According to the two men, the UAW’s efforts have been mismanaged, but they remain committed to organizing the plant – without the UAW. After failing to organize Volkswagen’s Chattanooga plant as well as other Japanese-owned plants in the South, this development is hardly a vote of confidence for the UAW, even though the desire to organize may be alive and well.

]]> 35
Lawsuit Settlement Highlights Incentive Pitfalls Thu, 08 May 2014 11:00:36 +0000 Hyundai_Motor_Manufacturing_Alabama_Highsmith_01

A long-running lawsuit over the value of the land on which Hyundai’s Montgomery, Alabama plant is located has been settled. The Montgomery Industrial Development Board will pay former landowners $3.45 million to settle their claims. The particulars of the case illustrate the potential hazards faced by advocacy groups when they attempt to incentivize industrial development.

According to the story in the Montgomery Advertiser, the nearly decade-long lawsuit came to a head last November, when a jury awarded the plaintiffs $4.87 million in damages. The plaintiffs are a group of landowners whose acres were purchased by the Industrial Development Board (IDB) for the development of the Hyundai plant. The IDB is a quasi-public body whose members are appointed by the Montgomery City Council. In Alabama, these development boards are the bodies through which industrial incentive money is typically disbursed.

The landowners initially agreed to accept a price of $4,500 an acre for their land after negotiations with the IDB. This price was structured as part of an “option” deal: the land would only be purchased if it was found to be absolutely necessary to construct the plant. A conflict arose when a lone holdout, realizing the value of their position, negotiated a price of $12,000 an acre. This triggered a lawsuit by the other landowners, who had a clause in their contracts forbidding any one owner to receive more compensation than another. After a lengthy procession through the courts, the IDB has agreed to a settlement rather than prolonging the case. It’s still unclear where the money to pay for the settlement will come from. The Board’s website lists land sales, member fees, and certificates of deposit as some of the ways that it raises revenue; it’s also empowered to issue bonds, under the terms of state law.

There’s no question that Hyundai’s arrival has been a major boon to Montgomery, and to Alabama in general. The state and local government incentives offered to the company were instrumental in getting the new plant built. Even so, this lawsuit attests to the fact that incentive packages often carry hidden costs, especially in the legal arena. Caught between the promises made to Hyundai and the need to fairly compensate landowners, the Board got stuck in a bad negotiating position. Now it will have to cough up much more money than originally planned.

]]> 1
UAW VW Road Map Guiding March To Mercedes-Benz Fri, 14 Feb 2014 13:00:38 +0000 MBUSI

Following the same road map that led to the ongoing organization efforts at Volkswagen’s plant in Chattanooga, Tenn., the United Auto Workers have allied with German union IG Metall and Daimler’s works council on their march toward Mercedes-Benz’s MBUSI plant in Vance, Ala.

Reuters reports the UAW are doing card checks and distributing propaganda at MBUSI with help from the two German organizing bodies in the former’s ongoing march to unionize the South; other efforts include those at two Nissan plants in Tennessee and Mississippi.

Furthermore, the UAW has gone after Daimler via the National Labor Relations Board over allegations of interference and intimidation of MBUSI workers in exercising their right to organize; the hearing is scheduled for April 7.

Leading the Southern march, UAW regional director Gary Casteel explained how the union was paying attention to globalization and its effect on workers’ rights:

“The companies globalized a long time ago, and workers’ rights didn’t follow suit. It’s time that the workers’ rights caught up, and that’s the reason you see all the interaction between international unions and a global strategy.”

Said interaction comes as the result of the UAW gaining representation with Daimler’s World Employee Committee, whose role is to “strengthen and deepen the dialogue and information transfer between the various employee representatives and unions” according to Daimler in a statement.

While union leaders on both sides of the Atlantic want to see representation at MBUSI, not all of the plant’s 3,000 workers are on board. Elizabeth Kelly, who works as a team leader in quality control during the plant’s overnight shift and is opposed to the UAW, sees no link being what the union is doing with VW and Mercedes:

“The UAW supporters believe that if a union is voted in in Chattanooga, it will help their cause here. I tend to believe that it doesn’t really affect us one way or the other. It’s two totally different companies.”

]]> 35
NLRB To Conduct Hearing on Alleged Worker Intimidation at Mercedes-Benz Plant in Alabama Wed, 29 Jan 2014 16:19:57 +0000 28_Millionth_Vehicle_at_Plant_Tuscaloosa

The National Labor Relations Board will conduct a hearing to discuss allegations regarding management conduct at Mercedes-Benz’s Vance, Alabama plant. The reports filed with the Board allege that Mercedes violated worker’s rights by forbidding discussion of unions during working hours, as well as threatening termination of employees that solicited for the union.

The UAW accuses Mercedes of suppressing efforts by employees to organize, in violation of the National Labor Relations Act. Mercedes claims it has pursued a policy of neutrality regarding the unionization of its workforce. The NLRB dismissed one complaint filed against the company in August of last year. But two other complaints filed in the fall were accepted by the NLRB as possible violations of labor law. The hearing, to be conducted on April 7, will allow both sides to present their case before a judge. The recommendation of that judge will influence the final ruling by the NLRB. A ruling against the complaint would strengthen the position of Mercedes and the union’s political opponents, but if the NLRB finds a violation of the law, it could be a major coup for the UAW.

This is the latest development in an ongoing campaign to unionize the plant, which builds the M, R, and GL Class near Tuscaloosa. Pro-union employees cite stagnating wages and reduced benefits as part of their reason for considering unionization. This leaflet issued by the UAW organizing committee alleges that since 2007, Mercedes has slashed healthcare plans for retirees. Supposedly, employees hired after 2009 will not be eligible for any retiree health benefits whatsoever. Employees have also voiced concern over the increased use of temporary workers at the plant. Still others point to a general decline in the relationship between labor and management, with complaints about inconsistent application of company policy. Others dismiss the need for a union, pointing out that high-paying jobs were scarce in the area before Mercedes arrived. They fear that the UAW may damage Mercedes’ recent run of success in the US. This includes an expansion of the plant to build the new C-Class later this year.

Although it has not yet succeeded in organizing the main Mercedes plant, the UAW has had a measure of success with Mercedes’ suppliers. The parts makers Faurecia, Inteva, ZF, and Johnson Controls in nearby areas have been organized for several years. It’s possible that the UAW may be able to leverage this success with plant workers in Vance. Even so, the unionization of a major transplant automaker in a right-to-work state remains a daunting task.

]]> 60
Mercedes-Benz Expands Alabama Facilities, Deals With Labor Issues Ahead of C-Class Introduction Mon, 23 Dec 2013 12:00:29 +0000 Mercedes-Benz C250, AMG Line, Avantgarde, Diamantsilber metallic

Mercedes-Benz has been making improvements to its manufacturing facility near Tuscaloosa, Alabama in anticipation of the introduction of the all-new 2015 C-Class.  On December 18, Mercedes held a grand opening ceremony for a new 900,000 square foot parts logistics center at the plant.  Mercedes claims the $70 million dollar facility will employ 600 people.


Most of those new hires will be contract employees working for outside suppliers, but some will be directly employed by Mercedes as transfers from existing facilities. The facility will handle daily parts deliveries as part of the just-in-time production method. Governor Robert Bentley was in attendance, remarking that “Mercedes has been a great partner for Alabama” since the plant opened. Mercedes began production at the facility in 1997.

Mercedes says that the addition of C-Class production will add about 1,000 employees at the facility in total. That number may increase in 2015, when the company plans to add another SUV to the production line. Auto Evolution claims that new SUV will probably be the next-generation GLK. This is yet to be confirmed by Mercedes, but it seems likely given that the C-Class is built on the same platform. It would also make a logical replacement for the aged and slow-selling R-Class. Mercedes discontinued R-Class sales in the United States last year, but still produces the vehicle in Tuscaloosa for the world market.

The expansion of the Tuscaloosa facility, like the founding of VW’s Chattanooga plant, has created waves in labor relations around the globe. Building cars in Alabama is part of a global production strategy that has seen Mercedes parent company Daimler shift more capacity to America.  When Daimler announced plans to transfer C-Class production out of its Sindelfingen, Germany facility back in 2009, it led to mass protests by workers affiliated with the union IG Metall. IG Metall has since backed unionization efforts at both Daimler and VW’s American facilities by the United Auto Workers, out of fear of being undercut by cheaper American labor. The UAW has lobbied Tuscaloosa workers extensively with IG Metall’s assistance, but has had no success thus far. The continued expansion of the facility will undoubtedly focus ever-greater attention on labor relations and compensation at the plant.

]]> 7
How Did That Get There? An Anglia In East Alabama Thu, 15 Aug 2013 06:15:16 +0000 DSC_0319

As much of America redevelops in the direction of increased urbanization and strip-mall suburbia, small downtowns have either dried up or re-purposed themselves as purveyors of quaint fashion and entertainment. Such is the case with Opelika, the sister town to Auburn. Boutiques, restaurants, and antiques places have mostly replaced the hardware stores and other obsolete staples of small-town commerce. I come from a family of enthusiastic collectors of rare junk, but even I can see the occasionally sad irony of a town selling pieces of itself just to get by. A few weeks ago, however, I spotted a prominently displayed chunk of the past that defied my expectations. Instead of distressed Americana on sale, one shop had a very English relic I didn’t expect to see in this part of the country. I returned later to take a closer look.


    This Ford Anglia was pulled from a field somewhere in East Alabama. The proprietress of the shop knew of the car’s British origins, but didn’t know how it came to rest in a Southeastern cow patch. She received it “from a friend” and converted it into a display piece for her downtown antiques emporium. Lodged in the front window of the shop with a couple of artfully-positioned suitcases, it’s not for sale. Its value as a conversation piece and an attention-getter clearly outweighs whatever sum someone might be tempted to pay for it. Rest assured, Anglia diehards: this isn’t one that you’d want to save. It’s pretty rotten in the floors and the sills, there’s plenty of bullet holes, and a number of hard-to-find bits are missing. Still, I’m glad that it wound up here rather than in a China-bound scrap steel container. It took me a while, but I managed to get some decent shots of the car despite it being surrounded with stuff.


    Who in Alabama would have bought this car new? I’m guessing it was sold here as a new or nearly-new car because of the chrome trunk tag. Brewbaker Motors is a large multi-franchise family dealership in Montgomery that still operates today. They aren’t a Ford store, though, so they must have acquired it secondhand. I like to think that some expat British professor brought the car with him when he came to teach at Auburn in the 1950’s. He might have traded it in after discovering that English Fords didn’t have much repair or parts support in the Deep South. Or maybe some hardworking Dixie resident snapped the Anglia up as an alternative to the big Fords of the era. In any case, it went the way of all discarded cars in Alabama and became somebody else’s target. Now it serves as a reminder that not everyone wanted a Detroit land yacht in the 50’s.

Thanks to the owner of Resurrect Antiques for her permission to photograph the vehicle.

DSC_0317 DSC_0321 DSC_0328 DSC_0310 DSC_0314 DSC_0313 DSC_0326


]]> 26
Mercedes To Expand C-Class Lineup Mon, 15 Apr 2013 13:00:29 +0000

The next-generation Mercedes-Benz C-Class, due in 2015, will be getting a full lineup of variants to help it better compete against the BMW 3-Series.

The next-generation C-Class will be built in Alabama, a first for a Mercedes-Benz passenger car. In addition to the sedan and coupe, convertible and hybrid variants will be offered, marking the car’s transition from M-B’s entry-level product in the United States to a more prestigious position in the lineup. While BMW outsold Mercedes by 5,000 units when only the sedan models were compared, the delta was closer to 20,000 units when all variants were included. But while BMW will offer a 3-Series wagon, Mercedes-Benz won’t be doing the same with the C-Class.

]]> 13
Ford Reportedly Looking For $400 Million From Canadian Government As Belts Tighten Across Canada Thu, 07 Jun 2012 13:00:07 +0000

The Globe and Mail’s Greg Keenan explored an interesting conundrum that Canadian governmental officials are facing; is it worth subsidizing auto industry manufacturing facilities, even with austerity programs in place?

The closure of the Oshawa consolidated line last week brought into focus the issues facing Ontario’s once bouyant auto manufacturing sector. On the one hand, there’s the instinct to preserve the auto plants, and the stable, well-paying jobs that come with them, even if it means “investment” from both the provincial and federal government (at a rate of 15 percent of the total cost from each level of government). But with governments imposing wage freezes and layoffs on public employees, subsidizing profitable private businesses goes beyond just poor optics.

Keenan cites upgrades to Ford’s Oakville plant, which builds vehicles like the Edge and Flex, as having the potential to require a total of $400 million in government money. While the sum is steep, the upgrades would preserve the 2,800 jobs currently at the plant, and allow for a global platform vehicle to be built, increasing the potential for exports beyond the U.S. market.

States like Tennessee and Alabama are courting car companies with what Keenen describes as “… incentives worth hundreds of millions of dollars at auto makers to finance training, infrastructure and real estate purchases and provide tax holidays to land the thousands of jobs created by assembly plants.” Of course, those states tend to have plants that aren’t unionized. Foreign automakers tend to build in the South more than the Big Three, but GM recently moved some production of the Chevrolet Equinox from Oshawa to Tennessee in part because they could pay new hires $14 an hour rather than the $32 an hour paid to Oshawa employees.

High CAW wages and a strong Canadian dollar give the automakers the potential for an easy way out when it comes to packing up and moving their plants elsewhere. Bringing production back to America, at $14 an hour would not only cut costs but provide good optics for American manufacturers. Moving production to Mexico, already a trend among a number of automakers, would provide further costs savings, and if the last generation Ford Fusion is anything to go by, no major drop in quality.

]]> 23
Mahindra Denies Alabama Production Plans Fri, 23 Dec 2011 17:47:25 +0000

Another day, another disappointment for American fans of the Indian automaker Mahindra’s rugged, diesel-powered trucks. Earlier rumors that Mahindra might build its trucks with Navistar in Alabama turn out to be false, as a press release published at MahindraPlanet notes

MUMBAI, India, December 17, 2011 /PRNewswire via COMTEX/ — “There have been reports in certain quarters of media and online space stating that Navistar USA will produce Mahindra’s T20 and T40 pick ups in Alabama, USA in 2012, which are completely baseless & incorrect. If & when there are any material developments, Mahindra & Mahindra Limited will communicate them directly and transparently.”

If you haven’t given up on the Mahindra dream, now might be a good time to consider it…

]]> 9
The Final Countdown for an Alabama-Mahindra Truck? Thu, 15 Dec 2011 15:45:34 +0000  

Click here to view the embedded video.


This is one of my favorite music knock offs, the Hindi version of Europe’s “The Final Countdown”. My point? If the folks at Mahindra Planet are right, it’s only a matter of time before the Bollywood Music types rip off Skynyrd’s classic, “Sweet Home Alabama.” Which will be pretty awesome, I assure you!


The big box of a building in Muscle Shoals is rumored to be the future home of the Mahindra TR20 and TR40 compact pickups. The truck gurus at Navistar supposedly signed a 10 year lease on the facility this October: could the company that fought Ford tooth and nail take Ford’s compact truck market share once the Ranger officially dies next week?



But let’s not get too excited about our prospects for a pure compact pickup, a stickshift, gutsy Miata with a bed if you will. Nothing’s ever perfect.



If the EPA figures are right, the TR40 is a bit of a buffet slurping Yankee. Considering the price volatility of diesel and the fuel economy of gas trucks, that’s a big problem. And who knows if these rigs have enough engineering prowess to overcome the road/dirt driving dynamics of a Tacoma. It’s same (potential) Achilles’s heel that put the Model T out of production and Chevrolet on the map.  Then again, this interior shot suggests the TR isn’t a bad place to do business.



Rear HVAC vents?  Not too shabby! Who knows what the future will provide?

Off to you, Best and Brightest.




]]> 27
After The Monster Tsunami, The Super Tornado Sat, 30 Apr 2011 17:34:07 +0000

Mother Nature appears to have issues with the auto industry. First, a once in a millennium tsunami crippled Japanese automakers and suppliers for most of the year. Now, the most powerful long-track tornado in US history hit automakers in Alabama.

  • Mercedes closed its plant  after a mile-wide tornado destroyed parts of Tuscaloosa, Ala., and caused minor damage to the Mercedez-Benz plant north of the city. The plant was shut down to aid employees “who needed to support their families, friends and communities that were severely impacted,” as Mercedes-Benz spokeswoman Felyicia Jerald told Automotive News [sub]. Mercedes will resume work on Monday.
  • Toyota‘s engine plant in Huntsville, Ala., is still without power after the twister toppled power lines Wednesday night. Toyota spokeswoman Tania Saldana Blersch told Automotive News that it is unclear when the plant will be reopened. Production at Toyota’s North American factories has already been suspended for Mondays and Fridays through June 3 as a result of parts shortages due to the March 11 earthquake and tsunami in Japan. Plants are operating at half production on Tuesdays, Wednesdays and Thursdays.
  • Other manufacturers, such as Hyundai  and Honda were not damaged but are evaluating the impact on suppliers.
]]> 6
Hyundai and Kia. Have You Met Each Other Before? Mon, 06 Sep 2010 12:16:42 +0000

When Renault and Nissan signed an agreement to form an alliance, few expected it to work. In fact, according to the book “Shift” (or was it “Turn Around”?), Bob Lutz was quoted as saying that Renault would be better off taking the money they spent on the Nissan stake, putting it on a ship, sailing it into the middle of the ocean and sinking it. Another accurate prediction from the One of Maximum Bullsh*t. The reason that the Renault-Nissan has worked so well so far is, according to Carlos Ghosn, communication. Without communication, how can you expect your partner to understand you? Sounds simple, right? Not to Hyundai and Kia.

While checking on the local Alabama news, I came across this article by the Montgomery Advertiser. Alabama is home to a Hyundai plant. The article details the handover of Santa Fe production from Hyundai’s plant in Alabama to Kia’s one in Georgia. The plants are less than 100 miles apart and they already supply each other with engines and (soon) transmissions, so you’d expect this transfer of production to be a piece of Alabama Mud Cake? Not really.

When Kia announced it would be making the Kia Sorento, a CUV which shared the same platform as the Santa Fe and looked very similar to each other, it pretty much put it beyond reasonable doubt that production of the Santa Fe would move to Georgia. Kia drafted up a four-paragraph press release about the plans. A copy went to Robert Burns, a spokesperson for Hyundai Motor Manufacturing. Then the communications problems started.

The press release was embargoed until 8am on a Tuesday. Corrine Hodges, a spokesperson for the Kia plant in Georgia, refused to talk about the press release and wouldn’t even acknowledge the press release’s existence. This sounds like normal behavior for a PR person, until you realize that Ms Hodges was acting like this AFTER the embargo had expired. Why was she denying a press release after it was OK to publish?

On the same day, Mr Burns confirmed the press release and the contents, but still wouldn’t release it until there was no confusion over the matter. Then the Montgomery Advertiser got involved.

The Montgomery Advertiser got ready to publish the information on the press release and it not being issued, just yet, on the internet. Mr Burns had agreed to be a named source in the story…right up until the story was about to be published. Before the story went live, the Montgomery Advertiser received a phone call from Mr Burns stating that he didn’t want to be considered the named source of the story. Two hours later, Mr Burns phoned back allowing the story to be published as he got permission from “higher-ups” to release the story. But he still didn’t make public the press release from Kia.

The article then states that “Hodges sent the release, clearly marked with an embargo date and time, to Burns, but didn’t call him back to recall the whole thing. She, or someone at Kia, shared the release with others in Montgomery and likely elsewhere, but didn’t let them know to hold it.” Sounds like a bit of a clusterNSFW ? Well, there may be a reason behind this.

It seems that in the US operations of Hyundai and Kia, neither plant share any bosses. They’re two independent entities. Kia doesn’t report to Hyundai and vice versa. You have to go all the way to South Korea, before a merging in management happens. Now, I don’t wish to illogically extrapolate from this one incident, but could this lack of communication have ramifications further down the line? I mean Old GM’s brands didn’t really communicate with each other and an aloof management at Toyota brought about its current problems. Whereas at Ford, Alan Mulally got departments talking and communicating with each other. Which allows them to work together better. I’m sure Hyundai and Kia will address this problem. Unless they speak some Korean dialects that are mutually unintelligible.

]]> 13
Hyundai: Get Them While They’re Hot! Mon, 09 Aug 2010 13:53:06 +0000

When Apple releases a new product, people wait in line for it. Steve Jobs talks, everyone buys. Apple often runs out of stuff that is in high demand. Usually, people will wait. Hyundai has a similar problem. But maybe not a similar solution.

The Montgomery Advertiser’s Cosby Woodruff just found out that, to his great horror, Hyundai’s operates their plant down in Alabama by what’s called the Just In Time production technique. Ever since Ignacio Lopez and his gang of ninja warriors left GM with boxes of documents in 1993, big manufacturers around the globe have switched to just in time. Someone should tell Woodruff that JIT is a great thing for real estate: One by one, suppliers will first build warehouses around the factory, then factories …

Having just found out about just in time, Woodruff thinks it leaves frighteningly little margin for errors. And when he says “little” he means it.

One example is the plant operating on “less than an hour’s supply of many key components.” Mindboggling, isn’t it? Another example is where the plant “rarely has more than 10,000 cars parked in its massive lot behind the plant”. (Actually, for hardcore just in timers, that’s a bad sign.)

Mr Woodruff then states that the problem is so great that to maintain a sustainable supply chain, managers are now monitoring the transit time from plant to dealership. After all, if a dealership has plenty of stock, then they won’t quibble about a 2 week transit time, unless maybe their stock is on the low side?

The scenario that Mr Woodruff paints is a very real one and while having many customers for your product is a great thing, it’s only great provided you have the stock to supply them. What’s the point in having customers at dealerships clamoring for the latest Sonata, only to find there are none available?

Which also brings up another scenario which Hyundai may want to pay attention to. Remember my comparison to Apple? The reason people wait for Apple products is because those customers rarely cross shop. It’s either Apple or nothing. Hyundai, as good as they may be, aren’t in that class. If customers can’t get hold of their Sonata in a reasonable amount of time, maybe the Toyota or Honda dealership across the street will be able to provide them with a suitable alternative at a much shorter delivery time?

To be fair, Hyundai has acknowledged that deep down in Alabama, this isn’t sustainable and needs to be fixed. “Consumer demand continues to significantly outstrip product availability at Hyundai dealerships, ” said Dave Zuchowski, Hyundai America’s vice president of sales.  Then John Krafcik, CEO of Hyundai America, announced that expansion of their Alabama plant’s production capacity will go ahead. But in the mean time, if the scenario I laid out above happens, Hyundai may have trouble winning those customers back. Toyota is in ultra sensitive mode and will do all they can to be the golden boy again. Honda’s sales of the Accord are flagging and could do with a boost. Will Hyundai rectify the situation just in time? I don’t know, but with TTAC constantly monitoring US sales, we’ll find out soon enough.

]]> 34
Hybrid Kinetic Motors Inks $500m Deal With Italdesign Giugiaro Tue, 19 Jan 2010 16:45:40 +0000

There’s a lot happening in the world of cars these days, but few stories are as compelling as the emergence of two rival US-based firms created by two former bosses of the Chinese automaker Brilliance. At face value, both Hybrid Kinetic Motors and Greentech Auto are little more than visa scams: neither attempts to hide the fact that their fundraising plans involve a US Visa program (EB-5) which allows citizenship to foreign nationals who invest a half-million bucks in an American business. For additional scam warning points, both firms purport to use mythical hybrid engines and plan factories with annual capacities of a million units. But as easy as it is to simply write these firms as Chinese visa hucksters grifting the good folks of such towns as Tunica, Mississippi and Bay Minette, Alabama, they keep showing up in the news with stories that predecessors like ZAP would have given their stock-price-boosting-press releases for. To wit: the latest news that Alabama hopeful Hybrid Kinetic Motors has signed a half-billion dollar deal with Italdesign-Giugiaro, the largest order in the famed design house’s 42-year history.

Automotive News [sub] reports that the deal involves the design and engineering of no fewer than eight Hybrid Kinetic models for the American market. HK CEO Benjamin Yeung reportedly chose Italdesign because he’d already worked with the firm; as CEO of Brilliance Leung had hired Ital to design the Zhonghua sedan, then the most modern Chinese-made car on the market. FEV Motorentechnick GmbH of Aachen, Germany may or may not be developing the hybrid kinetic drivetrain.

Further confusing the situation, Yeung (formerly known as Yang Rong) HK Motors and its parent company Far East Golden Resources Group have announced a $1.5b investment in magnesium-aluminum alloy drivetrain production capacity in Shenyang, China. Ironically, this marks Yeung’s return to Liaoning province, which he has sued for allegedly ousting him and taking over Brilliance (lawsuit in PDF format here). Weirder still, Alabama Live reports that an HK spokesman claims

HK Motors will allow the [Shenyang] development zone to manufacture 200,000 or more vehicles and keep the profits, according to the document… “This is critical for us to bring down unit cost given that we expect to spend over $1 billion to develop our engine, powertrain and hybrid system, and vehicle series,” [the spokesman] said.

The Chinese operation will supply engine castings and component modules for the Bay Minette plant, which would do “engine machining and powertrain and hybrid system assembly as well as vehicle assembly,” he said.

Yeung is reportedly working on raising $1.5b, as HK moves towards a reported 2013 production start at the $4.3b Bay Minette plant (which HK says will produce a million units per year by 2018). Baldwin County has provided $70,000 for site surveying for the new plant, and Alabama will likely donate a considerable sum to the project. Without proven demand for the kind of capacity HK is talking about, let alone proof of the technology the firm is talking about should give Alabama officials pause, to put it lightly. Paying half a billion bucks to a reputable European design house is a tempting signal, but not enough to overcome our fundamental suspicion of the whole convoluted, ambitious endeavor. We’ll be watching this story with considerable interest.

]]> 4
Mercedes C-Class Production Shifted To Alabama Thu, 03 Dec 2009 15:20:52 +0000 (

After writing about Spyker transferring production from the Netherlands to the United Kingdom, I thought I’d seen it all. Well, now I have. Production going OUT of Germany and into the United States. After much debating, Daimler have finally decided to switch some production from Germany to the United States. According to Reuters, roughly a fifth of Mercedes-Benz C-Class models will be built in Alabama by 2014, in hopes of protecting against currency fluctuations and maintaining profit margin. Naturally, the unions weren’t happy, in fact they downed tools in protest, claiming it was a “blatantly wrong decision.” Dr Z saw it differently, especially considering the move is said to be worth $100m in incentives from the state of Alabama.

“From a strategic and economic point of view, this step is absolutely necessary for Mercedes-Benz to remain competitive in the future and utilise its chances for growth,” Daimler Chief Executive Dieter Zetsche said in a statement on Wednesday. Not to mention a great chance to snag $55 million in training, as well as $20 million in state and local cash grants in addition to other Alabama tax abatements.

The union further claimed that 3000 jobs are at risk, which directly contradicted what Daimler’s personnel head, Wilfried Porth, said. He claimed that there would be no job cuts in Sindelfingen, where the C-Class is made, and that when the production comes online in the United States in 2014, it will create 1000 to 1200 jobs there.
So, Daimler’s management are happy because this move will maintain their profit margins, the United States will have extra jobs & more manufacturing, and the stock market reacted favourably with Daimler’s stock price rising 0.3% to €35.19 per share. It seems the only people not happy are the unions, even though Herr Porth said there would be no job cuts. Honestly, there’s no pleasing some people!
]]> 18