Auto suppliers are continuing to make new plant investments, despite months of uncertainty and economic stress brought on by the coronavirus pandemic.
The ongoing projects constitute what Bernard Swiecki, director of the automotive communities partnership at the Center for Automotive Research in Ann Arbor, Mich., calls “future-proofing.”
“Everyone is expecting a full recovery and that recovery seems to be happening faster than many people anticipated,” Swiecki said. “You need to be spending now to be ready for an industry that’ll be here in a few years.”
Plant investment is necessary to remain competitive, regardless of the current crisis, he said — and location is a big factor.
“If you can put it somewhere where it’ll actually give you a competitive advantage, then there’s a chance of coming out in a better position than your competitors,” he said.
Investments this year have been particularly busy in Ohio, Indiana, Alabama and Tennessee:
- Hayashi Telempu North America, the Michigan-based supplier of automotive carpet and interior trim components, announced in March a $7 million expansion in Jasper, Ala., to supply the Mazda Toyota Manufacturing USA joint venture assembly plant in nearby Huntsville. The expansion will add 19 jobs to its operations in Walker County.
- Troy, Mich.-based supplier Inteva Products announced in March a $42 million investment to open a 260,000- square-foot manufacturing plant for interior systems in Bluffton, Ind. The plant is expected to be operational by next summer and create more than 400 jobs by the end of 2023.
- Marelli’s $10.9 million investment in a plant in Bowling Green, Ohio, will support 75 new jobs. The plant is expected to be completed early next year, anticipating new business for the company’s interior unit, particularly for customers in the Midwest and Canada, the company said in May.
- German supplier Adler Pelzer Group said in June it is investing $10 million to expand its North American operations and move into a 100,000-square-foot plant in Oregon, Ohio. The plant, creating 80 jobs, will produce parts for acoustic performance and increasing thermal efficiency.
- Without revealing the dollar value of its investment, German supplier Mahle said in July it will add 140,000 square feet to its operations in Murfreesboro, Tenn., adding 300 jobs for new injection molding production lines for auto customers in the Southeast.
- Spanish auto supplier Alcorta Forging Group announced in June plans for its first North American production operation and regional headquarters in Marysville, Ohio, near Columbus. The $15 million investment will create 50 jobs in a new 150,000-square-foot facility, at which it will manufacture car body, engine, powertrain and exhaust system components. The company said the investment has potential to double in five years.
Jonathan Bridges, managing director of automotive, steel and white goods at JobsOhio, said he saw only a temporary pause in investment commitments during the industry’s pandemic emergency.
“We had a period where the entire industry was shut down. That definitely had an impact on automotive activity from an Ohio standpoint because the conversations that we were engaged in, and on the cusp of closing, may have been paused,” Bridges said. “Now we’re seeing that activity pick back up.”