The Automotive Sector: Adding Some Torque To Growth

Upheaval in supply chains is likely to increase in the short term, a trend that may be exacerbated by changing patterns of supply and demand, consumer-driven connectivity and alternative powertrain systems.


https://businessfacilities.com/2020/04/the-automotive-sector-adding-some-torque-to-growth/
Upheaval in supply chains is likely to increase in the short term, a trend that may be exacerbated by changing patterns of supply and demand, consumer-driven connectivity and alternative powertrain systems.
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The Automotive Sector: Adding Some Torque To Growth

Upheaval in supply chains is likely to increase in the short term, a trend that may be exacerbated by changing patterns of supply and demand, consumer-driven connectivity and alternative powertrain systems.

The Automotive Sector: Adding Some Torque To Growth

Globally, the automotive industry is in a much stronger position than it was in 2015. Revenues and profits have robustly rebounded in the United States.

For the first five years of this new decade, automakers must respond to several transformative challenges. How they respond will determine the long-term viability of sustainable growth in the automotive sector.

  • Cost pressures are expected to result in more platform sharing and the proliferation of modular systems. At the same time, there will be few if any price increases in established markets.
  • The landscape for supply and demand is shifting from a global supply chain into more regional platforms, which ultimately will have an impact on the models that are offered to regional markets.
  • The pace of the transformation to electric vehicles (EV) will pick up significantly in 2020, as will the introduction of active, semi-autonomous safety features that rapidly will become standard equipment for new models.
  • U.S. automakers are hoping 2020 could reverse the dip in last year’s EV sales. In 2019, sales of electric vehicles fell from about 360,000 to 330,000, despite the steep rise of Tesla Model 3 sales. Last year’s relatively paltry number of EV introductions should be easily surpassed in 2020.

ALABAMA: TOP-TIER AUTO SECTOR

The rapid acceleration in the automotive sector has been a driving force in Alabama’s economic growth since Mercedes-Benz’ (MBUSI) arrival in 1997.

Alabama ranks as one of the nation’s top automotive production states with nearly 1 million vehicles and 1.5 million engines produced in 2019. Exportation of Alabama-made vehicles and parts surged to an all-time high of $7.5 billion in 2018.

Automotive Sector
This state-of-the-art factory not only assembles high-quality Hyundai vehicles, it provides thousands of jobs in Montgomery, AL. (Photo: hyundaimotorgroup.com)

Currently, Alabama is home to six major automotive manufacturers, including the new joint venture of Mazda Toyota Manufacturing, and over 150 Tier 1 and Tier 2 automotive suppliers. Alabama’s robust automotive sector employs over 40,000 people and it is expected to continue to grow.

Hyundai Motor Manufacturing of Alabama (HMMA) recently announced plans to add the new Santa Cruz compact utility vehicle to their production line in Montgomery, Alabama. That expansion is projected to create nearly 1,000 jobs through local suppliers, logistics companies and within HMMA.

Mazda Toyota Manufacturing has hiring needs of 4,000+ team members to support their operations in Huntsville, Alabama. Annual production capacity will gear up to 300,000 vehicles starting in 2021.

MBUSI is in the midst of a $1 billion investment in electric vehicle production, global logistics and battery production which is creating over 600 jobs in the process. The 2 million square foot battery plant supports the EQ brand of Mercedes vehicles as well as batteries for the hybrid plug-ins.

Job growth in the automotive sector has grown exponentially in the last twenty years, and workforce development services provided by AIDT are among the strongest incentives for automotive manufacturers who choose to locate or expand in Alabama. AIDT has assisted new and expanding companies with recruiting, assessing and training more than 750,000 job seekers across all sectors.

Recognized among the nation’s top workforce training programs by industry observers, AIDT training produces a workforce that employers recognize for high performance achievement. This is a result of both the technical assessment and training that AIDT trainees receive, and the process by which they are selected.

Alabama’s educational initiatives have designed a road-map for future success within the automotive industry. SuccessPlus is Alabama’s initiative for improving the statewide level of education and helping 500,000 workers obtain credentials, certificates or degrees beyond a high school diploma by 2025. This is done in part through partnerships, apprenticeships, and cooperatives with business and industry leaders, providing citizens with a wide variety of avenues to succeed.

Another educational initiative is the Alabama Office of Apprenticeship (AOA). AOA works with Tier 1 & Tier 2 automotive suppliers throughout the state, providing them with the tools to train and educate a highly-skilled workforce. The apprenticeship program began in 2016 and has evolved in its mission to expand the use of registered apprenticeships and Alabama industry recognized apprenticeships. Apprenticeships offer excellent opportunities for citizens to learn technical skills and receive work-based learning experiences while earning a living wage.

The Alabama Federation for Advanced Manufacturing Education (F.A.M.E.) Program is a joint effort between industry and the Alabama Community College System. Currently housed within the Alabama Robotics Technology Park (RTP), F.A.M.E. enables students to connect with industry leaders to learn valuable manufacturing skills while completing an associate degree.

The Alabama RTP recently launched its next phase of training. The focus has shifted to Industry 4.0 training as well as additive manufacturing. The RTP is a leader in robotics training, enabling manufacturers to take advantage of innovative robotics training for their employees while maintaining production.

AIDT also partners with other agencies, companies and vendors to provide world-class training. In Vance, AL, AIDT has partnered with MBUSI and the Alabama Community College System to provide Mechatronics training. The Mechatronics Training Program provides hands-on training and skills with increasingly complex technology that includes mechanical, electrical, computer and control engineering.

Whether automotive, aerospace, robotics, shipbuilding or biomedical, AIDT researches and identifies the needs of each company served and uses that information to develop a full range of technical pre-employment selection programs uniquely customized for each company.

GREATER JACKSON, MS: ALL THE RIGHT PARTS

The key to accelerating in the automotive industry requires having all the right parts in place, and the Greater Jackson region has all of them. From a skilled and productive workforce to the state’s low corporate tax rate, Greater Jackson’s pro-business environment fosters growth and attracts new investment. State and local leaders work hand-in-hand with the region’s corporate partners to create new career opportunities.

The Jackson Metro and Mississippi’s first automotive original equipment manufacturer Nissan North America in Canton, MS started production in 2003 and today employs approximately 6,000 workers assembling top-selling models including Altima, Titan XD pickup truck and Murano. Nissan’s economic impact on Central Mississippi is estimated to include more than 25,000 direct and indirect jobs. The company has been a catalyst in recruiting automotive manufacturing companies to Mississippi.

Calsonic Kansei, a long-time supplier to Nissan, employs more than 500 team members at the automaker’s Canton plant. Because of Mississippi’s winning formula, the supplier expanded to meet the growing demand for the company’s products. Calsonic Kansei’s new facility in Madison County, represents an investment of $16.33 million creating 98 new jobs.

The Toyota Motor Manufacturing Mississippi plant, in Blues Springs, is the assembly facility for the Toyota’s best-selling Corolla. With a Mississippi-made workforce, the Toyota team in Blue Springs assembled 500,000 vehicles faster than any other Toyota plant in North America.

Continental Tire broke ground just 10 months after announcing the tiremaker was locating in Hinds County, MS. The plant reflects an investment of $1.45 billion and 2,500 new jobs, while significantly reinforcing Mississippi’s leadership position in the Southern Automotive Corridor.

Mississippi continues to experience success in business recruitment and expansion because of the state’s business-friendly environment. State lawmakers implemented the Corporate Franchise Tax Phase Out, which eliminates corporate franchise tax over a 10-year period. The phase out reduces the current $2.50 tax for each $1,000 of capital by $.25 annually until compete phase out occurs in 2027 and an exemption on first $100,000 of capital.

The Greater Jackson region and the state also are focused on building a robust and sustainable workforce through workforce training initiatives like the Mississippi Works Fund. This program dedicates $50 million over 10 years towards strengthening the state’s workforce. The state’s community college system can now enhance their customized training programs to more effectively meet the needs of companies and prepare more Mississippians for in-demand careers. Seventy-five percent of the funds may be used for new job creation, while 25-percent of the funds are allocated to strengthen the skills of Mississippi’s existing workforce and for workforce certification. The Mississippi Development Authority has the ability to direct funds as part of recruitment and expansion efforts.

Mississippi State University’s Center for Advance Vehicular Systems, which includes a campus in the Greater Jackson Metro in Canton, focuses on improving engineering, manufacturing and design technologies. The School of Polymers and High Performance Materials and the Mississippi Polymer Institute at University of Southern Mississippi are national leaders in composites, advanced materials, polymers and plastics. Additionally, Mississippi’s community colleges work directly with companies, providing pre-employment training and customized training programs. These efforts ensure workers are ready to contribute to a high-quality product on Day 1.

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