New Plant Plans Highlight Strengths In The US Auto Industry

Cammy Corrigan
by Cammy Corrigan

One of the most overlooked arguments during last year’s bailout debates was the fact that America’s automotive industry was not under threat. Sure, a few companies based in Detroit were panhandling at death’s door, but so-called “import brands” have been closing the gap in terms of Americans employed for years. And America’s transplant auto industry is continuing to grow. Even as the Detroit firms have slimmed down their North American manufacturing footprints, foreign firms are moving ahead with American and NAFTA-area plants despite the economic downturn. Not only do these moves signify possible new jobs, they also represent a long-term bet on the fundamental strength of the US economy.

The Chattanooga Times Free Press reports that over 65000 people applied for the 2000 jobs which the Volkswagen are creating in their new factory. One of the residents, Pamela Glant, applied for a production job in order to improve her standard of living. “I think I could do the work and I’d like to be tested” she said. Perhaps Ms. Glant should talk to DCX-era Chrysler employees to find out how “testing” German bosses can be. But national reputations aside, 35000 people applied for the VW plant’s 1200 production jobs and 30000 people applied for one of the 800 maintenance positions. “We are overwhelmed by the response and we are very satisfied with the result,” said Hans-Herbert Jagla, executive vice president of human resources for VW’s Chattanooga operations. “It gives us the confidence that we will be able to hire all the capable and flexible people we need to build our cars safely and with the highest quality.”. Feel free to add your own snarky comment about the use of “VW” and “quality” in the same sentence here.

Not to be outdone, Norwegian electric car maker “Think Global” looking in Indiana for a location for a manufacturing plant, Reuters reports. Charles Gassenheimer, chairman and CEO of Ener1 Inc., a lithium Ion battery manufacturer, said that the exact location and other details will be announced in a few weeks. Ener1 Inc. has a 31% stake in the Think Global. Mr Gassenheimer also disclosed that Think Global have applied for a US Government loan under the Department of Energy’s Advanced Technology Vehicle Manufacturing Loan programme, along with nearly every other dedicated EV firm.

Meanwhile, in addition to opening a new Kia plant in Alabama, Hyundai are taking firm advantage of NAFTA by scouting the site for another new plant in Mexico. Insideline reports that Promexico, a government agency that promotes exports and foreign investment, have disclosed that negotiations with Hyundai are already in progress. The main contender for Hyundai’s new plants is the Mexican state of Veracruz, possibly because of marketing opportunities for the Hyundai Veracruz. The report finishes with the author, Loriana Marietta, saying “Hyundai moves ever closer to matching Japan’s strength in the North American market.” Since Hyundai are determined to follow in Toyota’s footsteps, lets hope they don’t move into the next stage of Toyota’s method, over-expansion.

Cammy Corrigan
Cammy Corrigan

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  • Lorenzo Lorenzo on Nov 19, 2009

    It's a pipe dream to expect anybody to move into the vacant factories of Michigan/Detroit until the people correct the governance issues that are the cause of the exodus. Detroit City Hall is totally dysfunctional and in need of an overhaul, and the Michigan legislature is in no way equipped to manage the state, let alone step in to overhaul the government of Detroit. Like other states, Michigan spends too much money and has too high a level of taxation. The legislature is so addicted to taxes that when they enacted a tax cut on business, they created a tax on services to cover the cost. That tax was such a mess that it had to be rescinded as unenforceable. How did they cover the shortfall caused by the tax break on business? They raised the tax on business! Until the voters of Detroit AND Michigan throw everybody out and elect people with fiscal sanity, no corporate leaders will ever decide to relocate there, even with a right to work law.

  • Freddie Freddie on Nov 19, 2009

    Chevy Camaro. American icon. Designed in Austrailia, built in Canada. I feel very patriotic in my Alabama Hyundai.

  • Pau65792686 I think there is a need for more sedans. Some people would rather drive a car over SUV’s or CUV’s. If Honda and Toyota can do it why not American brands. We need more affordable sedans.
  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.
  • Joe65688619 I agree there should be more sedans, but recognize the trend. There's still a market for performance oriented-drivers. IMHO a low budget sedan will always be outsold by a low budget SUV. But a sports sedan, or a well executed mid-level sedan (the Accord and Camry) work. Smaller market for large sedans except I think for an older population. What I'm hoping to see is some consolidation across brands - the TLX for example is not selling well, but if it was offered only in the up-level configurations it would not be competing with it's Honda sibling. I know that makes the market smaller and niche, but that was the original purpose of the "luxury" brands - badge-engineering an existing platform at a relatively lower cost than a different car and sell it with a higher margin for buyers willing and able to pay for them. Also creates some "brand cachet." But smart buyers know that simple badging and slightly better interiors are usually not worth the cost. Put the innovative tech in the higher-end brands first, differentiate they drivetrain so it's "better" (the RDX sells well for Acura, same motor and tranmission, added turbo which makes a notable difference compared to the CRV). The sedan in many Western European countries is the "family car" as opposed to micro and compact crossovers (which still sell big, but can usually seat no more than a compact sedan).