Automotive Industry | Growing In Michigan, Tennessee

From driverless cars to all-electric vehicles, the U.S. automotive sector is going into overdrive to meet the surging demand for new cars and prepare for our green energy future.


https://businessfacilities.com/2015/04/automotive-industry-hitting-on-all-cylinders/
From driverless cars to all-electric vehicles, the U.S. automotive sector is going into overdrive to meet the surging demand for new cars and prepare for our green energy future.
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Industry Focus: Automotive – Hitting On All Cylinders

Automotive Industry | Growing In Michigan, Tennessee

NSK_Dyersburg-TN
NSK Steering Systems in Dyersburg, TN (grand opening shown above) recently expanded and now employs more than 650 workers. (Photo: Henderson/Chester County Chamber of Commerce.)

By Business Facilities Editorial Staff
From the January/February 2015 issue

When Google was looking for a location to engineer and build its driverless cars, it chose to do so in one of the world’s largest single centers of automotive innovation: Michigan.

“Google’s decision sent a powerful message,” said Michigan Economic Development Corporation CEO Steve Arwood. “Michigan is the best place on the planet to innovate and make things.”

Michigan is home to 63 of the top 100 auto suppliers to North America, and its 375 R&D centers represent more than 75 percent of United States automotive R&D spending. The state also ranks first nationally in the concentration of industrial engineers, R&D professionals and skilled-trade workers.

The increasingly high-tech automobiles on display in Detroit during the 2015 North American International Auto Show provided the perfect backdrop to reinforce this powerful message.

The automobiles epitomize what Detroit and Michigan offer. Many are researched, designed and manufactured by the state’s world-class workforce. The R&D, first-rate universities and engineers that go into making these vehicles offer opportunity and innovation that transcend industries and markets.

Michigan ranks first in U.S. motor vehicle production—producing 18 percent of U.S. vehicles in 12 OEM assembly plants and 35 OEM parts and components facilities.

MICHIGAN: $12 BILLION IN NEW INVESTMENTS

The $12 billion automakers have invested in Michigan since 2010 is greater than all of the new auto assembly plant investments announced in the U.S. since 2000. And, over the past 15 years, 20 percent of new U.S. auto assembly plants have been built in Michigan.

Michigan’s three native automakers drove the resurgent U.S. market last year. GM sold the most vehicles in the domestic market in 2014. Ford was the best-selling brand. And Chrysler made the greatest market share gain of all automakers.

Foreign automakers with a large Michigan footprint are also doing well. Toyota, Nissan and Hyundai all delivered strong sales results in 2014.

Michigan automotive employment has increased 32 percent since December 2010. Today, the state is home to nearly 600,000 auto-related jobs which make up 22 percent of the U.S. automotive industry workforce. Michigan is #1 for motor vehicle and parts manufacturing jobs, from Dec. 2010 to present, and has 356,000 industrial engineers, R&D professionals, and skilled-trade workers.

“Michigan-based automakers are restructured, financially healthy, and leaders in the global marketplace,” Arwood said. “While we have come a long way in a short period, we must prepare for rapid changes in market trends and technology ahead.”

To help assure continued global leadership, Gov. Rick Snyder created the state Automotive Office within the MEDC. Its charge is to better align state policies with industry needs and to serve as its center of connectedness, creativity and collaboration.

Strong dividends are already evident. Most recently, the U.S. Energy Department awarded $70 million to the Institute for Advanced Composites Manufacturing Innovation (IACMI). IACMI will develop new technologies to manufacture new composites.

It will have a strong Michigan presence with another new industry innovation center, the American Lightweight Materials Manufacturing Innovation Institute (ALMMII). Awarded $70 million by the Defense Department through a competitive process, ALMMII, headquartered in Detroit, will serve U.S. manufacturers by supporting innovative technologies that enable cost effective components for autos and a range of critically important sectors—aerospace, defense, rail and over-the-road trucking industries.

“Weight reduction in vehicles goes hand-in-hand with the development of new materials for use in transportation vehicles of all types,” said Kevin Kerrigan, senior vice president of MEDC’s automotive office and senior adviser for automotive initiatives for the state. “Michigan is at the center of a regional manufacturing ecosystem to move cutting-edge lightweight metals and composites out of the research lab and into tomorrow’s cars, trucks, airplanes and ships for both the commercial and military sectors.”

These new centers only add to Michigan’s prominence as home to automotive’s future. Last fall, more than 10,000 delegates from 65 countries gathered in Detroit for the Intelligent Transport Systems World Congress (ITSWC). ITSWC brings together technology, transportation policy and business leaders to focus on high-tech mobility solutions. Its Detroit meeting followed prior annual assemblies in Vienna and Paris.

Detroit made good sense for ITSWC given its proximity to the University of Michigan Mobility Transformation Center (MMTC) in Ann Arbor. With help from MEDC and in concert with the state transportation department and industrial partners, MTC is developing new vehicle-to-vehicle and vehicle-to-infrastructure in southeast Michigan that will soon deploy 20,000 connected vehicles.

It is no exaggeration to say the cars the world will drive in 2022 are under development in Michigan right now.

TENNESSEE: AUTO POWERHOUSE

More than 30 years ago, Tennessee’s economy was transformed by the arrival of Japanese automaker Nissan in Smyrna. Now, $30 billion in investment later and five years after the onset of the Great Recession, an exponentially larger and more intensely competitive Tennessee auto industry has begun to grow again under new conditions.

The Southeast has become a driving force in automotive manufacturing, and Tennessee’s success in this cluster is no accident. The growing list of suppliers that serve GM, Nissan and Volkswagen in Tennessee, and other OEMs throughout the Southeast, is significant. The automotive sector employs 111,000 workers through 900 establishments.

A major factor that will impact West Tennessee is the development of the Memphis Regional Mega Site. The Memphis Regional Megasite (MRM) in Haywood County and Fayette County, TN, located on Interstate 40, is the premier advanced manufacturing site in the southeastern U.S. The development of the 4,100-acre site is fully backed by the administration of Gov. Bill Haslam with a total infrastructure investment by the state of at least $106 million to date. Top Fortune 500 companies have visited the site and recognized its potential.

West Tennessee continues to see opportunities for new and expanding automotive suppliers throughout our region as well. NSK Steering Systems, Toyota-Bodine Aluminum, Arvin Sango and Pacific Manufacturing are just a few of the suppliers that have found success and profitability in West TN. They continue to produce high quality components and grow their workforce and its skill sets.

State leaders have put a great deal of emphasis on educating and preparing their workforce. Low taxes and utilities are obviously critical factors, but without an educated and trained labor pool which companies can use, the state wouldn’t be as successful. State-of-the-art training programs, skill certification, Tennessee’s Colleges of Applied Technology, and the state’s universities and the Community College systems provide so many resources to produce quality Tennessee workers.

Workforce truly sets Tennessee apart from so many others. This enables the state to be production leaders with a 16.6 percent increase in production in Tennessee auto plants from 2012 to 2013. Foreign Direct investment from Japan, Germany, Canada and the United Kingdom accounts for over $17.5 billion.

Another coordinated effort by the State was the implementation of the Tennessee Select Sites program. This third-party certification allows communities to minimize as much risk as possible regarding the development of their industrial properties. Communities that have earned this certification are well positioned for future success in attracting and expanding industrial clients. There are 15 Tennessee Select Certified Sites in western Tennessee. Companies that are looking to expedite their search process can rely on this program to provide them with all the information they need to know about a particular site.

West Tennessee has implemented a “Dynamic Building” concept that in conjunction with the Select Site program adds the availability to provide a streamlined process for new construction.

The Dynamic Building Plan concept is a design driven, visually presented planning process. The concept revolves around three main incentives: lower capital investment, expedited launch for construction, and higher visibility in marketing efforts. All pre-permitting requirements for the site, along with approved engineered drawings and cost estimates for finished construction, gives companies a very flexible building option. A customized building can be built to company needs and specifications in about the same timeframe as choosing, retrofitting, and renovating an existing facility.

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