Automotive Manufacturing in Georgia Community & Economic Development Georgia Power January, 2002 Table of Contents Overview................................................................................................................1 Automotive Assembly In The Southeast..............................................................2 Production .............................................................................................................3 Auto-Related Manufacturers With Over 100 Workers..........................................5 Work Force ............................................................................................................5 EMPLOYMENT......................................................................................................................6 WAGES..................................................................................................................................9 UNIONIZATION .................................................................................................................10 TRAINING...........................................................................................................................11 Market Potential..................................................................................................12 International Links..............................................................................................16 Appendix: Southeastern Auto Assembly and Component Manufacturers Employing 50 or More ………………………………………………………..…19 Overview Since the 1909 opening of Ford Motor Company’s Hapeville plant, the automotive industry has been an important part of Georgia’s economy. Family-owned Blue Bird began operations in 1927 with facilities in LaFayette and Fort Valley and in 1947, General Motors opened its Doraville plant. Today, the automotive and related industries employ over 41,000 Georgians. The motor vehicle and motor vehicle equipment industries alone contribute over $2.6 billion to the state’s gross product. Moreover, the industry is having a profound impact on the economy of the Southeast overall. Since 1990, four major assembly plants have opened across the region. The Honda plant in Lincoln, Alabama saw its first vehicle roll off the assembly line in December of 2001. An additional facility, Nissan in Jackson, Mississippi is slated to open in the summer of 2003. In Hinesville, Georgia, eMotion Mobility is making plans for the 2004 opening of its electric vehicle production line. Over 231,000 workers in 1,323 facilities across the region produce motor vehicles and motor vehicle components. Several foreign-owned automobile manufacturers have chosen to take advantage of Georgia’s many business-friendly attributes and transport capabilities by selecting the state for U.S. headquarters operations. Porche, Saab, Lotus and Daewoo are among those locating in Georgia. An abundant, trainable workforce, a vast supply of affordable land for expansion, and proximity to major transportation hubs originally brought the world’s premier automotive manufacturers south. These same assets draw producers today. In June of 2001, Business Facilities Magazine ranked Georgia as the second best location in the United States for the growing automotive industry based on related employment growth. The slow deterioration of the region’s textile industry has freed up an eager, production-oriented work force. While never a huge presence in the South, organized labor influence has steadily declined over the past 20 years, resulting in a largely independent work force. The region’s robust population growth, mainly due to in- migration, constantly replenishes the supply of potential workers. Competitively priced land, construction costs and operating costs continue to make the South one of the country’s most fiscally attractive places to locate. Atlanta’s world-class airport, extensive rail and highway systems and bustling international ports of Brunswick and Savannah connect the region to consumers all over North America and the world. Being closely connected to world economies is paramount in the automobile industry’s increasingly competitive and global market. Now, as the South’s population and economic growth outpace that of other areas, producers find themselves favorably located in the U.S. market place as well. Georgia is centrally positioned in the middle of the country’s largest motor vehicle market with year 2000 sales of over 6.5 million cars and trucks. 1 Growing industry globalization and consolidation force automotive industry participants to seek a competitive edge. Often location makes all the difference. Proximity to customers, end-use markets, skilled labor, and international transportation capabilities have become more important than ever. The following discussion of current production, the region’s work force, market potential and transportation alternatives illustrates why Georgia continues to be one of the top locations for automotive industry expansion. Automotive Assembly in the Southeast Georgetown, KY Louisville, KY Dublin, VA Norfolk, VA Bowling Green, KY Madison, TN Spartanburg, SC Cleveland, NC Smyrna, TN LaFayette, GA Spring Hill, TN Blue Bird Mount Holly, NC Doraville, GA Hapeville, GA Lincoln, AL Vance, AL Shreveport, LA Blue Bird Jackson, MS Fort Valley, GA Opening in 2003 2 Production Although total motor vehicle production has Percentage Share of Motor Vehicle Industry leveled off in recent years, the southeastern Production in 2000 states of Alabama, Georgia, South Carolina, and Tennessee continue to garner a substantial Southeastern States percentage of overall U.S. production. In 2000 these 6% Georgia states combined to represent 10 percent or 1.26 4% million of the 12.6 million cars and light trucks produced. Production in the Southeast shows no signs of slowing. In the next few years, production from Honda’s Lincoln, Alabama facility, opened in 2001, Other and Nissan’s Jackson, Mississippi plant, coming on Producing line in 2003, will bolster the region’s numbers even States 90% more. Mercedes in Vance, Alabama has expanded twice since opening in 1997 and plans to further increase production to 160,000 vehicles annually by 2004. Nissan in Smyrna, Tennessee will add Source: Automotive News, Market Data Book 2001 2,000 jobs so the plant can produce the popular Maxima in addition to its current models. eMotion Mobility’s new electric vehicle assembly plant in Hinesville Georgia, near Savannah, will begin operation some time in 2004. In terms of vehicle units produced, Georgia ranked second in the region and ninth in the nation in 2000. Top Ten Auto and Light Truck Producing States, 2000 3,500,000 3,001,919 3,000,000 2,500,000 2,000,000 1,864,039 1,500,000 1,248,087 1,135,028 1,000,000 724,449 591,327 552,583 545,143 Vehicle Units Produced 500,000 364,840 344,076 - M Ohi Kentucky Misso Il Indiana T Ge Ne Calif li e ich no nn orgia w o ig u is e J o an r ssee er rn i sey ia Source: Automotive News, Market Data Book 2001 3 Anchoring these significant numbers for Georgia are four major assembly plants employing over 8,400 workers. Georgia’s Automotive Assembly Plants Company Locations Types of Vehicles General Motors North Metro Atlanta -- Chevrolet Venture Doraville Pontiac Montana Oldsmobile Silhouette Ford South Metro Atlanta -- Fort Taurus Hapeville Mercury Sable Blue Bird Corp. Fort Valley School Buses Lafayette Recreational Vehicles Together these assemblers help Georgia and the Southeast maintain a stronghold for the production of motor vehicles while creating a substantial local market for the region’s automotive component manufacturers. Large and small operations are taking advantage of the South’s growing component market. Georgia alone has over 150 larger (companies employing 50 or more) components manufacturers. Since the announced opening of the Honda plant in Lincoln, Alabama, in the northeastern part of the state, a number of component manufacturers have located in Georgia. In all, five Georgia companies supply parts to the Lincoln plant. These suppliers have invested $188 million and created 2,100 jobs according to Georgia’s Department of Industry, Trade and Tourism.1 In the Southeast, auto component manufacturers with 50 or more employees number over 600. A complete listing can be found in the Appendix. A map locating Georgia auto-related companies with 100 or more employees is found on the following page. During 2001, several automotive industry companies came to Georgia. The addition of these operations has helped increase the state’s industry presence and provide additional materials support for companies already residing in Georgia and surrounding states. Georgia’s New and Announced Automotive Companies Estimated # of Company Location Product Employees eMotion Mobility Hinesville Electric Cars 150 employees F&P Georgia Mfg. Rome Automotive suspension 400 employees systems Neaton Auto Products Rome Steering wheels 75 employees Pirelli Tire Rome Tires 305 employees Suzuki Motor Corp. Rome All terrain vehicles 150 employees Trocellen Augusta Specialty foam 50 products 1 The Atlanta Journal-Constitution, “Bremen Auto Parts Plant to Grow”, David Markiewicz, November 3, 2001 4 Auto-Related Manufacturers with Over 100 Workers Source: 2001 Georgia Manufacturing Directory © Georgia Power Community & Economic Development, 2001 Work Force 5 The South’s strong work force draws automotive manufacturers to the region. Nissan Senior Vice President of North American Manufacturing, Emil Hassan, said his company decided