Automotive Opportunities in a Green Economy
The automotive sector continues to be one of the most successful industries in North America. But, global competition, emerging eco-trends, and innovations are changing the playing field.
The automotive industry is one of the most successful industries in North America. In 2007, over 15 million vehicles were produced in North America, including three million produced in Canada and a little over two million in Mexico, according to Wardâ€™s AutoInfoBank 2008.
While vehicle sales and economic growth in the North American automotive industry remain strong, the automotive sector landscape is also fundamentally changing. Escalating gasoline prices and growing environmental concerns are facilitating a shift in vehicle needs among consumers, creating demand for more fuel-efficient vehicles such as gasoline-electric hybrids. According to the Electric Drive Transportation Association, sales of hybrids increased to over 330,000 in 2007, up from over 9,000 in 2000.
Toyota has been the most successful company to tap into this eco-trend. In 2006, a decade after the first Prius went on sale, Toyotaâ€™s global sales of hybrid vehicles hit one million. Targeting another market, Toyota is releasing its A-BAT, a hybrid truck with an oversized grill and rugged body, this year.
This type of innovative thinking is part of the reason Toyota surpassed Ford in U.S. auto sales to become the second largest car producer in the world, not far behind GM, the current global automotive leader. It has also driven U.S. automakers to launch aggressive plans, focusing on innovation, to help boost sales. Ford and GMC launched their first hybrids, and other carmakers, including Dodge, have revealed plans to produce their own lines of hybrids. Saturn is releasing a 2009 Vue Green Line â€śtwo-modeâ€ť hybrid, which combines towing capacity with fuel savings.
Many experts believe that the automotive industry will see continued growth and sales in other types of fuel-efficient vehicles. This is due in part to stiff emission standards proposed by several U.S. states and continued investment in other types of advanced technology. This includes one of the most exciting new developments in U.S. car manufacturing: Tesla Motorsâ€™ new, revolutionary all-electric sports car. Innovations like this point to a changing, yet continuously growing and competitive industry, with doors opening for new opportunities.
Locations across North America are trying to seize these opportunities, and are often willing to dole out generous incentives to get a piece of this attractive industry. After all, investments by automotive companies mean prodigious economic growth for an area. Hereâ€™s a look at some locations that are helping to shape the future of the automotive industry.
San Antonio Offers A Global, Cost-Competitive Edge
Throughout 2007, hundreds of thousands of Toyota Tundra trucks rolled off the assembly line in San Antonio, TX, headed to showrooms and dealers across the United States. Since the first such Tundra was delivered in November 2006, the Toyota Motor Manufacturing, Texas (TMMTX) plant has ramped up its operation to 2,000 employees. TMMTX and its on-site suppliers employ 4,100 people and have invested a combined total of more than $1.5 billion. Plant employees and Toyota officials recently celebrated the 2008 Tundra being named Motor Trendâ€™s Truck of the Year.
In addition to this success, San Antonio successfully lured several automotive and manufacturing companies over the past few years. In 2007, San Antonio landed five manufacturing-related companies, and over the past three years, more than 30 manufacturing facilities.
JMP Engineering was one such company, creating a satellite office in the area to support established clients such as Toyota. JMP, headquartered in London, Ontario, Canada is an industrial system integration company that provides automation, control, and information solutions to enhance manufacturing performance for a wide variety of industries.
â€śSan Antonio represents a strategic investment for JMP in the Texas region,â€ť says Scott Shawyer, JMP president and CEO. â€śWe anticipate strong growth that will create new opportunities for local technical expertise.â€ť
San Antonio, the nationâ€™s seventh largest city, has seen an impressive amount of job creation over the years. In all, San Antonio gained approximately 16,600 jobs in 2007. The area ranked fourth among the top 10 cities in the Southwest for new manufacturing employment, according to a Manufacturersâ€™ News, Inc. report.
â€śCompanies in manufacturing and elsewhere are finding San Antonio to be a very profitable location for expanding operations,â€ť says Mario Hernandez, president of the San Antonio Economic Development Foundation. â€śA skilled workforce of more than 900,000, a cost of living 6% below the national average, ample low-cost energy, and an exceptional quality of life make the city very attractive to businesses.â€ť
From workforce training initiatives and a reliable infrastructure to cost-effective electricity and competitive real estate costs, San Antonio works collectively to provide productive opportunities for businesses. Workforce training incentives, such as the Skills Development Fund and the Customized Workforce Training program, offer opportunities to hire and retain employees prepared to meet the specific needs of a company.
San Antonioâ€™s location near Mexico, amid the intersection of major north-south and east-west interstate highways and rail lines, provides ample accessibility for the distribution of goods internationally. Union Pacific celebrated the groundbreaking of its new $90 million intermodal terminal in 2007. The new 300-acre rail port is expected to begin shipping and receiving goods for retailers and distribution centers in the fall of 2008. In addition, the Port Authority of San Antonio is a 2,000-acre master-planned hub of integrated air, rail, and highway logistics with an 11,500-foot, heavy-duty runway. The San Antonio International Airport is a two-terminal, 2,600-acre U.S. port of entry serving 16 major airlines.
CPS Energy, the local electric and gas utility company, consistently offers reliable, diverse energy sources and maintains excess generating capacity of more than 18%. The annual average electric utility rates for industrial users are the lowest of the major Texas cities and among the lowest in the nation.
With this in mind, new companies will find San Antonio to be a location that combines high productivity with an extremely competitive cost of doing business in order to achieve long-term profitability.
Austinâ€™s Automotive Advantage
While the Greater Austin area doesnâ€™t feature any Great Lakes and isnâ€™t noted for its snowfall, it has quietly positioned itself as a new center for innovation in the automotive industry, just as Detroit has traditionally been the North American hub for manufacturing.
In general, Texas offers costs for real estate, energy, wages, and taxes below those of most other states. Austinâ€™s deep reservoir of technology expertise and engineering talent coupled with a business friendly environment and a central location have attracted the attention of business leaders and decision makers in diverse industries.
The automotive industry is changing rapidly in response to new global demands. The next phase in the evolution of the industry calls for research and development, and innovative new approaches to manufacturing and assembly. This need for innovation requires more than just hard workâ€”it calls for brain power. The Greater Austin area has an ample supply of both. The labor pool may be the most energetic, innovative, and educated in the world, with almost 40% of workers having attained a college degree or higher, well in excess of the national average of 27%. The productivity of the workforce is among the greatest in the U.S.â€”in fact, Austin ranks 10th in value added per production worker hour among the top 363 metropolitan areas in the United States.
A workforce this educated and productive doesnâ€™t happen by chance. Central Texas is distinguished by close collaboration between business, government, and educational institutions. Within the 100-miles surrounding Austin are 38 colleges and universities, working closely with local employers to produce world-class research and an educated, motivated workforce. Key among these is the University of Texas (UT) at Austin, a leading research university noted for its top-ranked electrical and computer engineering department. Every year, UT Austin graduates a new crop of talented engineers who are supplying the talent to fuel the kind of innovation needed by the automobile industry.
The advantages of the Central Texas region have already attracted automotive suppliers to the area that benefit from Toyota and GM manufacturing facilities there. TASUS Corporation, which makes value-added components and supplies the Toyota manufacturing plant in San Antonio, recently located a new facility in Georgetown, TX just 25 miles north of downtown Austin. But traditional manufacturing is only one part of the automotive industry in Austin.
Greater Austin is a leader in providing the digital technologies that are increasingly vital to manufacturing modern automobiles. Freescale, an Austin-based semiconductor manufacturer, is the worldâ€™s leading semiconductor provider for the automotive industry. CEO Michel Mayer explains that â€śAustin has an appealing environment for the innovators we need at Freescale.â€ť
Todayâ€™s cars are increasingly complex computer-controlled machines, with several microprocessors in each new vehicle. The cost of electronics and software in a vehicle is already 20% to 40% of the cost of the vehicle, and it continues to increase. The need for a steady domestic supply of these high-tech components is accelerating, and the Austin metropolitan area is home to many companies that are producing these sophisticated components, including Freescale, which produces the widely used PowerPC Chip; IBM, which produces voice recognition software for GMâ€™s OnStar; and Venkel, a leading supplier of surface mount passive components used in automotive electronics.
The next stage for the automotive industry will see even greater electrification, particularly as electric vehicles (EVs) grow in popularity. EVs are a perfect marriage of Austinâ€™s leadership in high-tech manufacturing and clean energy technology. The semiconductor industry will drive EV technology, and Austin has long been a hub for semiconductors.
Automotive Newsâ€™ Lindsay Chappell observes that â€śas cars become smarter and require more software and hardware, Austin and Silicon Valley are the two regions in the U.S. that will emerge as the leaders.â€ť
Austin has all the pieces to become a key center for the automotive industry. Time will tell if the road to success in this sector indeed goes through Austin.
Kentucky: In the Fast Lane
Kentuckyâ€™s automotive plants produce some of the nationâ€™s top-selling vehicles in three important segmentsâ€”passenger car (the Toyota Camry, built in Georgetown, KY), SUV (the Ford Explorer, Louisville, KY), and premium sports car (the Chevrolet Corvette, Bowling Green, KY). Fordâ€™s popular heavy-duty F-series pickup trucks also are made there.
Kentucky ranks third in total light vehicle production, placing it at â€śthe hub of Auto Alley,â€ť the strip of middle America that stretches from Michigan into the Deep South. In fact, 9.8% of all cars and trucks produced in the U.S. are manufactured in Kentucky.
Over one million cars and light trucks were assembled in Kentucky in 2006. Nearly 87,000 people work in Kentuckyâ€™s 471 auto-industry facilities. According to a University of Michigan study, Kentucky has the nationâ€™s third-highest level of auto industry-related employment as a percentage of total state employment.
Kentucky can now put another feather in its cap. Boosted by a new state law that provides tax credits to environmentally friendly companies, Toyota began producing its hybrid Camry at its 20-year-old Georgetown plant in the fall of 2006. The plant is also set to begin manufacturing the companyâ€™s first crossover vehicle, called the Venza, in the fall of 2008.
With two large assembly plants in Louisville, Ford also has a long and satisfying history with Kentucky. The Kentucky Jobs Retention Act, a new incentive program passed by the 2007 General Assembly, will help ensure that Fordâ€™s legacy in Kentucky continues to grow. This includes up to $60 million in incentives to Ford over a 10-year period to secure a $200 million investment at the automakerâ€™s Kentucky Truck Plant. It will help pay for equipment and facility upgrades, new technology, and the purchase of new machinery and equipment, as well as the engineering costs necessary to implement the modernization upgrades.
These developments are only the latest reflection of the automobileâ€™s importance to Kentucky. It was in 1913 that Henry Ford started a small factory at the Summers-Herman dealership in Louisville, and two years later Model Ts were rolling out of what was then a cutting-edge industrial facility at Third Street and Eastern Parkway.
In 1955, Ford began operations at the modern Louisville Assembly Plant, and in 1969, production began at a separate facility, the Kentucky Truck Plant, on the east side of town. More than 6,700 people work for the two Ford plants. The expanded plant, now 4.6 million square feet, is the second-largest Ford assembly plant in North America.
GM also has a major plant in Kentucky. In 1981, GM moved production of the Chevrolet Corvette from St. Louis, MO to Bowling Green, which still stands as the exclusive home of the iconic sports car. The plantâ€™s 1,100 employees also build the Cadillac XLR luxury roadster.
Toyota started production in Kentucky in 1988, and its $5 billion Georgetown complex is the companyâ€™s largest production facility outside Japan. With two vehicle production lines and a powertrain engine and axle facility, approximately 7,000 team members build more than 500,000 vehicles and over 500,000 engines each year. Toyotaâ€™s success in the state led it to choose Kentucky as its North American manufacturing headquarters in Erlanger and North American Parts Center in Hebron. Together these facilities employ nearly 1,800 additional people.
Steve St. Angelo, president of Toyota Motor Manufacturing Kentucky and Senior VP of Toyota Engineering and Manufacturing North America, says Kentuckyâ€™s success can be attributed in part to its can-do spirit and dedication. â€śWhen Toyota came here 20 years ago, other people might have seen farmers, coal miners, or people working in grocery stores, but Toyota saw craftsmen, with skill, dedication, and hard work,â€ť he says. â€śAnd it has been very evident that Toyota was right, by the results weâ€™ve accomplished in Georgetown. This plant has won more JD Power quality awards than any other plant in the world, and theyâ€™re always raising the benchmark in quality. Our members have grown to be some of the most skillful auto makers in the world.â€ť
Discover Kentuckyâ€™s high-octane workforce for yourself, along with its innovative training programs, central location, great transportation system, financial incentives, and some of the nationâ€™s lowest electric power costs by calling 800-626-2930 or online at www.thinkkentucky.com.
Mississippi Charms Major Automotive Companies
When Toyota decided to build its eighth North American automotive manufacturing facility, it chose Blue Spring, MS. The company broke ground on a 335-acre site in April 2007. The $1.3 billion facility will have the capacity to produce 150,000 Highlander SUVs annually.
Toyota chose the state for its strong workforce. Toyota Manufacturing Executive Vice President Ray Tanguay said during the companyâ€™s February 2007 announcement: â€śOn my visits to Northern Mississippi, I have talked with area companies and observed their workforces. What I observed were people who are educated, ethical, and friendly with a strong work ethicâ€”a perfect match for the Toyota way.â€ť High praise from companies already located in the state also spoke volumes for the Mississippi workforce. â€śThey were definitely the best sales people,â€ť added Tanguay.
Many corporate decision makers tout the workforce as a major factor in their decisions to locate in Mississippi. For example, PACCAR broke ground in July 2007 for its $400 million diesel engine plant in Columbus, MSâ€”the first in the United States. An international company, PACCAR produces Kenworth, Peterbilt, and DAF trucks.
Jeff Forsythe, senior consultant at McCallum Sweeney Consulting and project manager for the PACCAR project notes, â€śThe outstanding site and strong labor force in the region were important factors in this location decision. It was a highly competitive project and in the end the Mississippi team prevailed over locations in 12 states.â€ť
Further solidifying Mississippiâ€™s position as a notable competitor in the automotive manufacturing world, both Toyota Auto Body Co., Ltd. and Toyota Boshoku-America announced their companies would build plants in north Mississippi, totaling $260 million in investments. These suppliers join the roughly 90 other automotive manufacturing, distribution, and supplier companies located in Mississippi. This is the first U.S. investment for both companies and it represents the first announced Tier 1 suppliers to Toyotaâ€™s new facility, just a few short months after the Toyota announcement.
In addition to Mississippiâ€™s solid automotive workforce, innovation in the technology sector there is helping the state make its mark. Mississippi is leading the way in nanotechnology innovation at the University of Southern Mississippiâ€™s Mississippi Polymer Institute in Hattiesburg. Mississippi is also staying ahead of the competition through the research and development happening at Mississippi State Universityâ€™s Center for Advanced Vehicular Systems in Starkville and in Canton near the Nissan plant. The University of Mississippi is making preparations for its newest addition, the Center for Manufacturing Excellence. That facility is a result of the universityâ€™s partnership with Toyota and the Blue Springs plant currently under construction.
Working with the stateâ€™s network of two-year and four-year colleges and universities, businesses have a wealth of resources to assist with training efforts and developing more efficient manufacturing processes. The Lean Enterprise Center at the University of Southern Mississippi focuses on training and project management through the â€śtrain-and-doâ€ť approach. The center works with most segments of industry, including automotive, shipbuilding, and furniture.
The Center for Manufacturing Technology Excellence, a 27,000-square-foot facility located at East Mississippi Community College near Columbus, is another ideal venue for specialized training with state-of-the-art equipment and ample facilities for a variety of programs.
Wilson Countyâ€™s Unique Automotive Advantage
Wilson County, TN is located just 25 miles from downtown Nashville and 20 miles from the Nashville International Airport. It is also conveniently located near two major automotive manufacturing companies, Nissan and Saturn. With its transportation infrastructure and diverse mix of both manufacturing and service industries, Wilson County is strategically located for automotive suppliers for the Southern Automotive Corridor.
One such automotive supplier is TACLE Seating USA, which is a joint venture between TACHI-S and Lear Corporation. Located approximately nine miles from the Nissan plant in Smyrna, TN, TACLE supplies seats for Nissanâ€™s new Altima sports coupe and the Nissan Maxima. TACLEâ€™s Wilson County facility is located in the Nashville East Logistic Center and is the companyâ€™s first U.S. plant and its third location globally.
Other automotive companies include Kenwal Steel; SouthTec, LLC; Genesee A&B; TRW Automotive U.S., LLC; Parker Seals; and Orchid International.
Kenwal Steel is now located in its new state-of-the-art steel service center in Lebanon, TN. The facility consists of 110,000 square feet and contains two new coil slitting systems for both light and heavy gauge material up to 72 inches wide with an automated banding line to accommodate specific customersâ€™ packaging needs.
SouthTec, LLC, a division of L&W Engineering Company is also located in Lebanon. This metal stamping and weld assembly company is a Tier 1 automotive supplier.
Wilson County is perfect for companies looking for a lower cost of doing business, a growing location, and an available workforce. Wilson County and its municipalities maintain low tax rates: Wilson County has a property tax rate of $2.48; Lebanon has a property tax rate of $0.37; Mt. Juliet City has no property tax; and Watertown has a property tax rate of $0.75. Wilson Countyâ€™s population grew by 17.1% to over 105,000 people from 2000 to 2006.
This region also provides unique training and educational systems. Wilson Countyâ€™s educational system consists of over 14,000 county students and 2,500 in its Special School District, producing over 900 annual high school graduates. Two private education facilities in the county have been rated among Tennesseeâ€™s best. Regional colleges and universities which serve the community include Cumberland University, Middle Tennessee State University, Tennessee Technology University, and Volunteer State Community College. Training facilities such as The Hartsville Technology Center, The Nashville Technology Center, and The Murfreesboro Technology Center provide post-secondary education and training.
Wilson Countyâ€™s growing population, diverse mix of automotive manufacturing and service industries, and close proximity to Nashville give it a unique advantage for automotive companies. With available facilities ranging from 300,000 square feet to one million square feet, Wilson County is ready to help your automotive company thrive.
South Carolinaâ€™s Dynamic Automotive Environment
South Carolinaâ€™s automotive industry offers a diverse mix of manufacturers and suppliers and a strategic location. Mid-way between Miami and New York, South Carolina provides easy access to materials and markets. Five interstate highways, nine commercial airports, and two national rail carriers complete an intermodal transportation network.
In 1992, BMW established its only North American facility near Spartanburg in upstate South Carolina, where it produces the popular Z4 and X5 models, and will soon be rolling out the new X6 and X3 models. To date, the company has invested over $2 billion and employs more than 4,500 people there.
More than 125 auto-related companies are located within a 10-county region of South Carolina in order to supply BMW and other southern manufacturers. Michelinâ€™s North American headquarters is located off Interstate 85 in Greenville County, SC to support its four tire production facilities in the state. Also in Greenville, Clemson University is collaborating with BMW, Michelin, Microsoft, and others to develop the International Center for Automotive Research. The 400-acre campus will be anchored by a Graduate Automotive Engineering Program and will include state-of-the-art research and testing facilities as well as private-industry R&D operations that will support the stateâ€™s growing automotive industry cluster.
The Port of Charleston, located in coastal South Carolina, is a key location for export and import to Latin America and Europe. The Port of Charleston is the number one container port in the Southeast. The Sprinter van is manufactured at the port, and American Lafrance produces fire engines there.
Florence, SC is a rural location that offers companies a low cost of doing business. It is home to Hondaâ€™s all-terrain vehicle and personal watercraft assembly plant that employs 1,600 people. Japanese and American suppliers have located in Florence to support Hondaâ€™s manufacturing efforts.
At the center of the state, the Greater Columbia, SC area is intersected by Interstate 77, Interstate 20, and Interstate 26, forming a transportation hub to support automotive suppliers. Columbia is the site of the University of South Carolinaâ€™s College of Engineering, as well as a major facility for Siemens Diesel Systems.
Western South Carolina offers yet another opportunity for auto-related companies. Aiken, situated on Interstate 20 between Columbia and Atlanta, GA, is home to the Bridgestone-Firestone light truck and automobile tire plant. Known as a region with a skilled workforce, Aiken is home to the Center for Hydrogen Research and the Savannah River National Laboratory.
South Carolina is also home to 300 plastics companies; produces 20% of the nationâ€™s capacitors; has over 100 companies that cast, forge, and extrude aluminum; and has 50 metal stamping and forging companies and 35 steel production facilities and foundries. The South Carolina Power Team, comprised of Santee Cooper and the stateâ€™s 20 electric cooperatives, provides a number of incentives, special electric rates, and grants that reduce the cost of locating or expanding manufacturing and distribution facilities throughout the state. South Carolinaâ€™s industrial electric power costs 24% less than the national average. The Power Team has a full listing of certified sites, industrial parks, and buildings on its Web site, www.scpowerteam.com, including the following:
â€˘ Black River shell building 4 in Sumter, SC, 104,600 square feet;
â€˘ Marlboro shell building near Bennettsville in Northeast South Carolina, 56,000 square feet;
â€˘ North American Container building on Interstate 95 next to Honda in Florence, 73,000 square feet;
â€˘ Plastic Omnium building in Spartanburg County near BMW, 80,000 square feet;
â€˘ UAV Warehouse in York County on Interstate 77 near Charlotte, 313,800 square feet; and
â€˘ Woodfield shell building near Interstate 85 in Greenville County, 31,620 square feet.
For more information on these buildings or how to locate your company in South Carolina, call Rusty Reed, vice president of Business Development for the South Carolina Power Team at 803-254-9211 or e-mail at email@example.com.
Laurens County Has What Auto Companies Need
Laurens County, SC is located midway between the metropolitan areas of Greenville-Spartanburg and the state capital of Columbia. It is bisected by two Interstate highway systems (Interstate 385 and Interstate 26), which make the county easily accessible to Interstate 85 and the Port of Charleston. BMW is located in Spartanburg County, which adjoins Laurens County. Clemson Universityâ€™s new International Center for Automotive Research is located in Greenville County, which also adjoins Laurens County. Both of these facilities are easily accessible by interstate highways.
Laurens County offers a readily available and highly skilled workforce for automotive companies. Automotive suppliers currently provide employment for 30% of the workforce in the county. The current unemployment rate is 7.3%, slightly above the state average of 5.9%. In addition, the availability of labor improved for prospective auto companies when Timken, which produces bearings for the auto industry, phased out its Clinton, SC plant in 2007. This resulted in an additional 1,000 available workers.
With four major industrial parks, Laurens County also offers quality infrastructure with room to expand. Woodfield Industrial Park and Owings Industrial Park are located along Interstate 385 near the Greenville/Laurens County line. Woodfield Industrial Park has about 130 acres remaining, and Owings Industrial Park has 316 acres. Owings Park has rail service provided by RailAmerica, which has 41 short line and regional railroads.
Hunter Industrial Park is located on Interstate 385 and U.S. Highway 221 and has almost 400 acres available, much of it rail-served by CSX, an international transportation company offering a variety of rail, container-shipping, intermodal, trucking, and contract logistics. Clinton Park Corporate Center is just over one mile from Interstate 26 and has 200 acres available. This site is rail-served by CSX. Hunter Industrial Park and Owings Industrial Park are certified by the South Carolina Department of Commerce. Clinton Park Corporate Center is currently in the certification process. All utilities are either within or border the parks.
The county has several buildings ready for immediate occupancy. One of them is a 31,600-square-foot spec building with 28- to 33-foot ceiling heights in Woodfield Industrial Park in Fountain Inn, SC. The building was completed during the first quarter of 2007. Also available is an 85,000-square-foot building in Gray Court, SC previously occupied by BBA Non Woven. The building is located on 20 acres and has six silos and a rail spur.
In addition to the industrial parks, the county has numerous stand alone sites, many of which are also rail served. One such site is the almost 1,500-acre Fleming Smith site. It is located at the intersection of Interstate 385 and U.S. Highway 221 in Laurens County. The site is rail served by CSX.
Laurens County also offers a very attractive cost of operation. The Laurens County Council is pro-business and offers aggressive tax reductions. For example, on a $5 million investment, the county can reduce the assessment ratio, thus reducing taxes by over 40% for a period of 20 years. In addition, the county also has the ability to offer a Special Source Revenue Credit that further reduces taxes for a period of 10 years. Laurens County is classified as a â€ślevel twoâ€ť county by the state, meaning state incentives are also readily available to prospective companies. In addition to these incentives, the countyâ€™s average wage is below the state average, resulting in an even lower cost of operation. The state of South Carolina also offers one of the nationâ€™s best training programs with the ReadySC program.
Why locate in Laurens County? It offers an excellent location with easy accessibility to many Tier 1, 2 and 3 automobile suppliers. The county also offers a skilled, available workforce, low cost of operation, and a vibrant rural community close to metropolitan areas. For more information, visit the county at www.laurenscounty.org.
Transportation Sector Going Strong in Roanoke Valley
When it comes to transportation and automotive manufacturing, the Roanoke Valley in Virginia is running smoothly. Since the mid-1990s, the nine-government region in southwest Virginia has seen a number of expansions and relocations in that sector. In fact, between 2000 and 2006, employment in transportation manufacturing nearly doubledâ€”a 95% increase.
In the past decade, five transportation-related companies have located in the Roanoke Valley, joining the many others that make parts for the automotive, truck, and rail industries. The five companies are Dynax America, Metalsa Roanoke, Virginia Forge, JTEKT Automotive Virginia, and Altec Industries. All have since expanded.
It shouldnâ€™t be surprising that the Roanoke region is attractive to transportation companies. After all, Norfolk & Western Railway, a predecessor company to Norfolk Southern grew up with the area in the 19th century. Today, the railroad remains an important part of the economy, but Roanoke Valley companies now make components, including electric power steering systems, wheel hubs, automatic transmission clutch disc plates, hoses and belting, heavy truck parts, and tires.
The companies cameâ€”and stayedâ€”for a number of reasons. The Roanoke Valley is centrally located in the middle of the East Coast, making it easy for Tier 1 and Tier 2 suppliers to reach automakers to the south, west, and north within one day.
â€śThrow in a skilled workforce, innovative training programs, and the Virginia Tech Transportation Institute, just 45 minutes from the central business district, and it is easy to see why the Roanoke Valley has become an important stop along the Southern Automotive Corridor,â€ť says Phillip F. Sparks, executive director of the Roanoke Valley Economic Development Partnership.
The Virginia Tech Transportation Institute (VTTI), Virginia Techâ€™s largest university-level research center, was designated in 1996 as one of three Federal Highway Administration/Federal Transit Administration Intelligent Transportation Systems Research Centers of Excellence. Research at VTTI involves topics ranging from real-world driving research to pavement and lighting to how the driver interacts with the vehicle. The most visible facet of the Institute is the 2.2-mile Virginia Smart Road. The state-of-the-art, full-scale, closed test-bed research facility eventually will connect Blacksburg, VA to Interstate 81. It features weather-making capabilities (rain, snow, and fog), variable lighting, pavement markings, and on-site data acquisition.
Market access and workforce were two of the factors cited when Altec Industries announced an expansion of its manufacturing and final assembly facility in the Botetourt Center at Greenfield in late 2006. Altec manufactures and sells truck-mounted mobile equipment for the electric utility, telecommunications, tree care, and contractor industries.
â€śThe team at Altec values our relationship with Botetourt County, VA and the surrounding community,â€ť says Jeff Emry, director of operations for Altec. â€śOur facility is in a centralized location along the East Coast with an excellent transportation system and a dedicated workforce possessing a solid work ethic. Altecâ€™s Botetourt plant was the logical choice for expansion to help meet the increased manufacturing capacity requirements of the company.â€ť
Altec is based in Birmingham, AL and it is the worldâ€™s leading manufacturer of aerial devices, digger derricks, and specialized truck-mounted mobile equipment. The company has manufacturing, sales, and service facilities throughout North America and sells equipment in more than 100 countries around the world. Altec opened its Botetourt County plant in 2001 where it currently employs approximately 250 associates.
Location and workforce were also important to Dynax America, which expanded its Botetourt County plant earlier that year. Dynax America first located in the Roanoke Valley in 1996. The companyâ€™s Japanese parent, Dynax Corporation of Hokkaido, Japan, is a subsidiary of Exedy Corporation, which is based in Osaka, Japan. Exedy, a publicly traded company listed on the first sections of the Tokyo and Osaka Stock Exchanges, has facilities in a dozen countries and employs more than 7,000 people. Dynax America employs some 300 people at its Botetourt County plant, where it manufactures clutch discs, driven plates, clutch packs, and torque converter pistons for automatic transmissions.
â€śDynax and Exedy consider the Commonwealth of Virginia and Botetourt County important partners in the companyâ€™s decision to expand the Dynax America facility. The Roanoke Valleyâ€™s strategic location, the quality of the workforce, and the local infrastructure were also critical factors in the decision to increase our investment in Botetourt County,â€ť said Koji Akita, president of Dynax America, at the time of the announcement.
Putnam County: West Virginiaâ€™s Automotive Sector
Putnam County, WV has experienced continued growth in the automotive industry. Employment has nearly quadrupled since Toyota Motor Manufacturing first opened a plant in Putnam County in 1996. The â€śHarbour Report,â€ť an annual study put out by Harbour Consulting, Inc., a manufacturing and management consulting firm, has named the Buffalo, WV facility the nationâ€™s most productive engine plant for three years running. Maybe that explains why Toyotaâ€™s plant in Buffalo has expanded five times since it opened, and now occupies in excess of 1.2 million square feet.
In January 2007, Putnam County Development Authority awarded a contract for construction of a new industrial access road extension to begin Phase II of the Putnam Business Park in Fraziers Bottom, WV. The road is being constructed to meet the new four-lane U.S. Route 35, now under construction. Phase II construction includes utility extensions and site work. In Phase I, all roads and utilities were completed, with 25 acres remaining in the 205-acre park. The park is located about three miles from Toyota Motor Manufacturing.
Three companies have already constructed buildings in the new park, including Nippon Thermostat of America Corporationâ€™s 32,000-square-foot manufacturing facility; Tasty Blend Foods, Inc.â€™s 58,000-square-foot production facility that produces Teas Valley brand dry food mixes; and Schwan Foods, Inc.â€™s new 14,000-square-foot warehouse and distribution center. Multicoat Corporation will begin construction of a new facility in January 2008.
The year 2007 also saw the construction of a new facility for Appalachian Railcar Services in Eleanor, WV. The company purchased an existing building and over four acres at the Eleanor Industrial Park and an adjoining seven-acre lot. The company then built a new 17,000-square-foot warehouse and distribution facility at the park.
Putnam County offers a globally competitive, diverse business base that has allowed auto companies such as Toyota and Diamond Electric Manufacturing Corporation to grow. If your company is looking for low-cost electricity, skilled labor, and available industrial sites, Putnam County is the answer.
Opelika, AL: Big Things Come in Small Packages
Located in East Central Alabama along Interstate 85â€”one of the Southâ€™s hottest transportation corridorsâ€”is the small city of Opelika, AL. With five existing Interstate ex-changes, you might imagine the city to be the size of Montgomery, AL; Chattanooga, TN; or Jackson, MS. Rather, Opelika is a small city with a population of approximately 26,000 and big city amenities. Part of the reason Opelika has stayed so connected to Interstate 85 is the sustained and continued growth the city has enjoyed.
Opelika is home to four Tier 1 automotive suppliers: Benteler Automotive, which supplies Mercedes and BMW; Mando America, which supplies Hyundai Motors and GM; Maxforma Plastics, which supplies Hyundai Motors; and Daewon America, which supplies Hyundai Motors and GM. With the impending construction of the new Kia Motors Manufacturing facility just 15 minutes east in West Point, GA, opportunities abound for local Hyundai suppliers to be able to increase production to supply the new Kia plant as well.
A major contributing factor to Opelikaâ€™s success in recruiting automotive suppliers is the Northeast Opelika Industrial Park. This park is directly served by Exit 66 off of Interstate 85. It was specifically designed for truck traffic, with acceleration and deceleration lanes that enable manufacturers to get their products to market with ease and expediency. This master-planned industrial park is also home to two distribution centers for Wal-Mart and Jo-Ann Stores. Ample space is still available in this 2,200-acre park that already has utility infrastructure in place. Currently there is a site that fronts Interstate 85 with up to 130 acres available. It has been cleared, has utility infrastructure to the property boundary, and is ready for development.
With available acreage, excellent access, and business minded leadership, Northeast Opelika Industrial Park will continue to position the community for continued growth and success. For more information, visit the Opelika Web site at www.opelika.org.