Best States For Autos
“It’s morning again―for auto manufacturing in America,” begins the narrator as music plays from President Ronald Reagan’s famous 1984 re-election campaign advertisement. Morning in America 2.0 started showing up this past June, and like the original it aimed to make a political point. Produced by the Association of Global Automakers, a trade group that represents foreign car companies, the ad showed footage of Kias, Hondas, Nissans, Hyundais, Toyotas, Subarus and Volkswagens being assembled in the United States—to drive home the point that President Donald Trump’s promised trade tariffs would hurt American workers. America’s Big Three automakers (Ford, Fiat Chrysler and General Motors, all based in Michigan) also fret about Trump’s tough trade talk, as the president has threatened to impose a 35 percent tax on imports to the U.S. from Mexico, where each has plants and suppliers. Having seen their sales trend upward annually since 2011, the Big Three are loath to return to the American auto industry’s gloomy days. Neither would other domestic and foreign car makers and suppliers, nor the ports, plants, rail lines, truckers and logistics companies around the country they rely on. As our Best States for Autos roundup shows, it really is morning again for auto manufacturing in America.
“The auto industry is doing great in Michigan,” said Governor Rick Snyder in June. The U.S. auto industry sold more cars and trucks in 2015 than during any prior year. Against analyst expectations, the industry broke that record in 2016 while logging a seventh straight year of rising sales. Now the world’s third biggest automaker behind Volkswagen and Toyota, Detroit-based GM led the American pack, followed by Ford and Fiat Chrysler. There are a whopping 975 auto manufacturing establishments in Michigan, where in 2014 the auto industry supported 532,000 jobs, according to a report by the Center for Automotive Research (CAR) in Ann Arbor.
Recently, for the first time in the era of the modern automobile, the most valuable U.S. car maker was not based in Detroit. Silicon Valley electric vehicle giant Tesla got the honors when it overtook General Motors. What makes that more poignant is that Tesla moved into a Fremont plant that GM abandoned. At its peak in 1979, the factory employed 6,800 workers through a GM-Toyota partnership. Tesla currently has 6,200 workers there, but the company recently submitted plans to the city of Fremont to nearly double the facility’s size to 10 million square feet and to ultimately expand the workforce to about 9,300. This is due to the EV maker’s plans to ramp up production of its more moderately priced Model 3. Meanwhile, Ford’s auto design headquarters is in Irvine, as is Kia and Mazda’s North American headquarters. Down the road in Fountain Valley is Hyundai’s and, in Cypress, Mitsubishi’s. State ports have been busy entry points for vehicles, particularly from the Pacific Rim, for decades.
With 371 auto manufacturing establishments, according to CAR, Illinois has long been a strong part of the Midwest “Auto Alley.” Production records are being set at Fiat Chrysler’s plant outside Rockford and Ford’s Far South Side Chicago assembly plant and Chicago Heights stamping plant. Jacksonville Jaguars billionaire owner Shahid Khan’s auto parts manufacturing company Flex-N-Gate is opening a new facility on Chicago’s South Side, and China’s Yanfeng Automotive Interiors—the world’s leading supplier of instrument panels and cockpit systems, door panels, floor consoles and overhead consoles—has a plant coming to Belvidere. Some Auto Alley luster did dull for Illinois in 2015, when Mitsubishi pulled out of a factory in Normal that was the state’s second-largest at 2.3 million square feet. As was the case with Tesla in the former GM/Toyota plant in Northern California, electric vehicle startup Rivian Automotive saved the Normal factory from demolition and now plans to churn out EVs there starting in 2019. Sealing the deal for the San Francisco/Detroit company was Normal having retained a highly skilled and educated population that already fully embraced EVs, with more plug-ins per capita than any other community in the country. Kyle Ham, CEO of the Bloomington Normal Economic Development Council, told Selection Site magazine, “That was a deliberate approach by our community to become an EV town.”
4. South Carolina
According to the state Commerce Department, South Carolina is now home to nearly 400 companies in the automotive industry, employing 66,000 people. Since 2011, five international tire companies announced new plants or expansions in the state, which ranks first nationwide in tire exports. Mercedes-Benz broke ground last year on a $500 million assembly plant to build Sprinter vans in Ladson and just committed another $600 million to expand a Greer facility that makes sedans. Volvo is building its first North American plant in Berkeley County. Credited with bringing all of this about was South Carolina politicians and economic development officials traveling to Germany for years with promises of free land, tax breaks and employee training until finally landing BMW. Since the BMW auto plant opened in Spartanburg in 1994, the company has invested $8 billion in the South Carolina economy. BMW CEO Harald Krueger announced in June that his company will spend another $600 million to expand its Greer plant and $200 million more on workforce training, with plans to surpass 10,000 BMW employees in South Carolina. Small wonder the Port of Charleston is one of the country’s busiest vehicle ports.
Before Toyota officially opened its North American headquarters in Plano on July 5 (see the “Should I Stay or Should I Go?” main story in this Most Business Friendly States for Manufacturers’ package), the world’s second-biggest car maker was already long established in the Lone Star State. A Tundra truck first rolled off a San Antonio assembly line nearly 10 years ago. Before that, major auto industry operations in Texas were mostly limited to a General Motors plant in Arlington, where GM is now in the midst of a $1.4 billion expansion. Some experts believe Texas may soon land another automaker. As Brian Kelsey, founder and principal at economic research firm Civic Analytics, put it to Austin American-Statesman, “The industry’s future here appears to be bright.”
Tennessee has been Business Facilities magazine’s top state in automotive manufacturing strength for five of the past seven years. The Volunteer State’s
automotive manufacturing cluster includes three major assembly plants and automotive operations in 86 of 95 counties. Nissan’s North American headquarters is in Franklin, and its plant in Smyrna is the most productive in North America. General Motors has a factory in Spring Hill as does Volkswagen in Chattanooga. Transportation equipment is Tennessee’s top export.
In terms of states with a larger share of auto industry jobs, Alabama has seen the fastest growth. Honda, Hyundai, Toyota and Mercedes-Benz build vehicles in the Yellowhammer State. The carmakers have been followed by a network of automotive suppliers, and combined they have made the industry among the most important of any in Alabama.
Canadian auto engineering and manufacturing company Multimatic Inc. announced in June that by the end of next year, it will add 180 jobs in the Fort Wayne area and will have spent $40 million for a 125,000-square-foot factory to produce steel components for vehicle body structures. Multimatic already has a facility in Butler with more than 250 workers. Chinese auto suspension system maker BeijingWestIndustries announced in April its first U.S. production facility will be in Greenfield, and Japanese auto parts maker NTN has been announcing, breaking ground on and opening plants around the state all year.
The Buckeye State can count 599 auto manufacturing establishments to the Hoosier State’s 519 in the CAR compilation. The auto industry is “thriving” in Ohio, according to JobsOhio, something Director of Automotive Jonathan Bridges attributes his state’s central location, educated workforce, competitive business climate and “an innovation ecosystem offering next generation resources and collaborative partners investing in ongoing connected and autonomous vehicle research, development and testing.”
It may surprise you that Alfa Romeo’s new line of premium, Italian made mid-size sedans–the 280-horsepower Giulia and Giulia Ti as well as the 505-horsepower Giulia Quadrifoglio—began arriving earlier this year via Grimaldi Lines to JAXPORT. After all, Jacksonville does not exactly scream, “Arrivederci, bambino!” The delivery does not surprise JAXPORT officials given their “longstanding partnership” with Alfa Romeo parent company FCA US. Florida is no U.S. carmaking giant, but JAXPORT is one of the nation’s busiest ports for total vehicle handling, having moved more than 636,000 in 2016. “What really sets us apart is our skilled labor force,” says Frank Camp, JAXPORT’s director of Non-Containerized Sales. “Our vehicle handlers are highly trained in the proper ways to protect vehicles in transit.” He also cites the top ro/ro carriers calling on Jacksonville, and three leading auto processors (AMPORTS, Wallenius Wilhelmsen Logistics and Southeast Toyota) occupying facilities on port terminals, in some cases as close as 100 yards from ship berths.