Southern Auto Corridor - Summer 2019

Foreign direct investment is waning in the U.S.

The recreational vehicle industry is seeing slower sales, a warning sign that a recession is ahead.Nowhere else in the world do foreign companies invest more than in the U.S. And most years, the South captures about half of that investment. Since the end of the recession in 2009, foreign companies have created two-thirds of the manufacturing jobs in the United States.

Foreign companies have transformed state economies in the South, and foreign companies, particularly manufacturers, can be found by the hundreds if not thousands in every Southern state. But the last two years have seen a waning total of foreign direct investment (FDI).

With $440 billion invested by foreign companies in the U.S. in 2015, the nation set a record for FDI. That total fell to $380 billion in 2016 and $273 billion in 2017. It did rise to $296 billion in 2018; however, that is still down 38 percent from its high in 2015. The biggest drop has come from the Chinese. They set a record of $44 billion in 2016, yet there is currently hardly any Chinese investment in the U.S. this year.

It’s not just the U.S. that is seeing a slowing manufacturing sector

The U.S. joined four other major economies that saw their manufacturing contract this summer — the U.K., Germany, Japan and South Korea.

A leading economic indicator? Sales of RVs are sliding.

The recreational vehicle industry is seeing slower sales, a warning sign that a recession is ahead. In every recession since 1980, RV sales tumbled just before the recessions were official. Shipments of RVs have fallen 20 percent so far this year according to the RV Industry Association. In an article in The Wall Street Journal this summer, an economist at Ball State University, Michael Hicks, said, “The RV industry is better at calling recessions than economists are.”

ALABAMA

Last year was Alabama’s biggest year ever for FDI
Alabama has been incredibly successful at recruiting foreign companies. Four foreign automakers operate OEMs in the state with another — Mazda Toyota — currently building an OEM manufacturing facility. Last year, Alabama saw a record set in foreign direct investment with companies from 16 different countries launching projects with more than 7,500 new jobs. Those announcements set an investment record of $4.2 billion in 2018.

Auto supplier DaikyoNishikawa breaks ground in Huntsville
Japan-based auto parts supplier DaikyoNishikawa has broken ground on a $110 million plant on the site of the Mazda Toyota assembly plant in Huntsville, Ala. The company will produce plastic automotive parts for Mazda Toyota. The project will create 380 full-time positions.

New Mercedes-Benz battery plant and parts warehouse taking shape in Bibb County,
Investments by Mercedes-Benz U.S. International operations are taking shape in Woodstock, Ala. The German automaker’s Global Logistics Center warehouse is nearing completion. It will consolidate several warehouses in the U.S. to one location. Mercedes will stock every part needed by a dealership or service center in the United States. The battery plant, which is part of a $1 billion expansion in Alabama, is nearing construction. The new battery facility near Tuscaloosa is part of a global production network of eight battery factories worldwide. The network of battery plants means Mercedes-Benz will offer at least one electrified vehicle in each model series by 2022, including the SUVs built at the Tuscaloosa assembly plant. 

Brose completes expansion in Tuscaloosa County
Auto parts supplier Brose Tuscaloosa is celebratingthe completion of an 80,000-square-foot expansion. The company supplies seat components to nearby Mercedes and other automakers. Brose now employs 700 at its Tuscaloosa County plant.

Tuscaloosa-made Mercedes vehicles pile up at German airport
Mercedes-Benz is storing thousands of undelivered Alabama-made GLE SUV models at a former military airport in Northern Germany. Issues with a supplier have created the delays in deliveries. The vehicles were made in Alabama for European customers.

Honda Manufacturing of Alabama contributed more than $12 billion in 2018 to the state’s economy.Honda plant in Alabama has huge economic ripple
Honda Manufacturing of Alabama contributed more than $12 billion in 2018 to the state’s economy. Along with its suppliers, Honda was responsible for more than 45,647 jobs in the state, according to an economic impact study released in August by the Economic Development Partnership of Alabama and the Center for Business and Economic Research at The University of Alabama.

Toyota shifts production plans for Alabama plant under construction
The Mazda Toyota Manufacturing U.S.A. joint venture assembly plant in North Alabama, which is under construction, will now assemble a new SUV model instead of the Toyota Corolla. The new SUV doesn’t have a name yet. Construction of the $1.6 billion, 4,000-employee plant is still on schedule with plans to ramp up production in 2021, however that production will be delayed by the new model. Mazda is also going to build a new SUV at the plant and both automakers will now share components.

Japan-based auto supplier to build plant to serve Mazda-Toyota plant in Alabama
In the summer, Japan-based global automotive supplier Vuteq announced it is investing $60 million to open a new plant that will service Mazda Toyota Manufacturing U.S.A., in Huntsville, Ala. The company will produce interior and exterior plastic-injected parts. Mazda and Toyota are currently building their joint venture plant in the Southern Automotive Corridor. The Vuteq project is a $60 million investment that will create 200 jobs.

Auto supplier expands in Alabama
Italy-based 2A S.p.A. is expanding its facility in Auburn, Ala. The $15 million project will create 50 jobs. The die-casting company has many customers, including Porsche, Volvo Trucks and Alfa Romeo.

Improvements at South Alabama Megasite
The 3,000-acre South Alabama Megasite in Baldwin County is getting $5 million in improvements thanks to Alabama Power and CSX Transportation and a new state program. The improvements include a CSX rail spur off the main rail line that runs along the southern part of the site. Also, 200 acres of the site will be graded creating a 1 million-square-foot pad.

Motus Integrated Technologies breaks ground on $15 million Alabama plant
Motus Integrated Technologies recently broke ground on its $15 million, state-of-the-art manufacturing facility in Gadsden, Ala. The 96,000-square-foot facility will create nearly 100 jobs producing headliners, armrests and trim components for the auto industry. The new Gadsden facility will span more than two acres of land and is anticipated to be complete next year.

Gerhardi opens first U.S. plant in Alabama
German auto supplier Gerhardi has opened its first U.S. manufacturing facility in Montgomery. The $41.6 million plant will employ up to 235 people to produce interior and exterior plastic automotive parts at the state-of-the-art injection molding, electroplating and assembly plant.

GEORGIA

Blue Bird opens paint facility in Fort Valley, Ga.
School bus manufacturer Blue Bird has made a significant investment to build a 60,000-square-foot bus painting facility which uses the latest in robotic technology at its assembly plant in Fort Valley. In keeping with the company’s mission of going green, the facility features a zero-to-landfill design. All paint overspray will be captured, dried and sent to a power generation plant to be used as fuel.

KENTUCKY

Detroit-based Ford Motor Co. will invest $550 million to install new equipment and modernize its Louisville Assembly plant where it makes the Ford Escape and Lincoln Corsair models.Ford to invest $550 million to upgrade the Louisville Assembly Plant
Detroit-based Ford Motor Co. will invest $550 million to install new equipment and modernize its Louisville Assembly plant where it makes the Ford Escape and Lincoln Corsair models. The investment coincides with a new generation of its high-selling Escape SUV. The new model will incorporate a variety of new technologies.

MISSOURI

Auto parts supplier Faurecia opens plant in Missouri
Faurecia’s new 281,000-square-foot manufacturing plant in Blue Springs, Mo., is now operational, making doors and dashboards for the Kansas City-made Ford F-150 pickup. The plant currently employs about 200 people, however at full build out, employment there is expected to top 400.

NORTH CAROLINA

North Carolina on short list to land Mahindra Automotive
Flint, Mich., and Greensboro, N.C., are among the cities in contention to land Mahindra Automotive North America’s second U.S. assembly plant and the 2,000 jobs it would bring. The India-based automaker’s current assembly plant in Auburn Hills, Mich., is at capacity, and a significant expansion is needed to produce new products for the U.S. market.

Goodyear upgrades North Carolina plant
The Goodyear Tire & Rubber Company plans to upgrade and add equipment at its 50-year-old tire production plant in Fayetteville, N.C. In order to receive a grant from the state, Goodyear must make at least $180 million in capital improvements at the site and retain the 2,000 jobs currently in place.

SOUTH CAROLINA

The ongoing $600 million expansion at BMW’s plant in Greer, S.C., means that the German automaker has invested $10 billion in the plant since 1994.BMW’s latest expansion marks $10 billion invested in Upstate South Carolina plant
The ongoing $600 million expansion at BMW’s plant in Greer, S.C., means that the German automaker has invested $10 billion in the plant since 1994. The plant houses about 9,000 workers and makes BMW’s X models. A University of South Carolina study found that the sprawling Spartanburg County plant has had $16.6 billion in economic impact.

New Jersey auto supplier to set up shop in South Carolina
CRP Industries will invest $2.5 million and move into a new 50,000-square-foot facility in Conway, S.C. The power steering systems manufacturer will create 115 jobs in the deal.

TENNESSEE

Mitsubishi is relocating its HQ from California to Tennessee
Mitsubishi Motors North America is relocating its headquarters to the Nashville area from California in a move that will strengthen the Japanese automaker’s financial ties to Nissan and bolster Tennessee’s stature as a major U.S. auto hub. The move this year will bring 200 jobs to Franklin, Tenn., where Nissan operates its North American headquarters. The Japanese automaker will invest over $18 million in the relocation.

Nashville-based Nissan to cut over 12,000 jobs
Nissan, which operates its North American headquarters in the Nashville MSA, is cutting 9 percent of its global workforce. The Japanese automaker has reduced shifts at its plant near Jackson, Miss., and cut about 400 workers. At this time, no cuts are expected at its headquarters, engine plant and assembly plant in Middle Tennessee. However, 12,500 jobs will be eliminated worldwide and production capacity will be reduced by 10 percent. Nissan has seen a 7 percent decline in sales from the same period of last year.

Japanese auto parts supplier plans Tennessee plant
HIROTEC Group, a Japan-based global automotive supplier specializing in the production of body-in-white closures, exhaust systems, and closure manufacturing equipment, is investing in a new plant in Fayetteville, Tenn. The new plant will specialize in exhaust production and stamped parts. The $48 million plant will house 100 workers.

Italy-Based auto supplier expands Tennessee operations
Athena-SCE, an automotive supplier, will invest more than $3 million to expand its operations in Mount Pleasant, Tenn. The company plans to create 36 additional jobs in Maury County to produce gaskets and other sealing devices for automotive and industrial
applications.

Auto supplier expanding in Chattanooga
A German auto supplier is expanding its operations in Chattanooga, Tenn., which will become its North American headquarters. The $6 million investment will create another 100 jobs in Hamilton County. ATN Hoelzel LP provides robotic gluing equipment for the auto industry.

Love’s will establish facility in Milan, Tenn.
Love’s Travel Stop will create a tire retread and distribution facility in Milan. . . the largest of its kind for Love’s, totaling 200,000 square feet. The company will invest $8.8 million and create up to 80 jobs.

TEXAS

Toyota plans mega investment
Toyota is reportedly planning to spend as much as $398 million to optimize its San Antonio truck plant. The plant, which builds the Tundra and Tacoma, will be reconfigured to boost production of the trucks. While the upgrades won’t result in any new jobs, the investment would boost the plant’s capabilities through the installation of additional robotics and other technologies. The automaker will likely add at least one vehicle model to the Tundra and Tacoma pickups already rolling off the assembly line.

Toyota supplier to hire 900 in South Texas
Aisin AW, a maker of transmissions for Toyota and other automakers, is building a new plant in Guadalupe County, near San Antonio. The $400 million project will create 900 jobs. Toyota assembles pickup trucks in San Antonio.

Hennessey Performance Engineering celebrated the groundbreaking of an expansion of its plant in Sealy, Texas, to accommodate increased demand for its tuned vehicles, as well as the upcoming Venom F5 hypercar.Hennessey expands in Texas for Venom F5 hypercar
Hennessey Performance Engineering in late July celebrated the groundbreaking of an expansion of its plant in Sealy, Texas, to accommodate increased demand for its tuned vehicles, as well as the upcoming Venom F5 hypercar.

VIRGINIA

BMW supplier to expand in Virginia
BimmerWorld, a leading BMW parts supplier, will invest $1 million to expand its operation in Pulaski County, Va. The company is increasing warehouse space to accommodate a growing demand for parts.

WEST VIRGINIA

Hino Motors Manufacturing U.S.A. opened its 1 million-square-foot plant in Mineral Wells, W.Va.Hino Motors opens its new West Virginia plant
In the summer, Hino Motors Manufacturing U.S.A. opened its 1 million-square-foot plant in Mineral Wells, W.Va. The company is now making class 6, 7 and 8 conventional trucks. The plant’s capacity is 15,000 trucks per year and at opening, Hino announced a new $40 million expansion that will bring employment at the facility to around 800 jobs.

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