AUTOMOTIVE INDUSTRY
From the Kentucky Economic Development Guide 2020
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Muscling Its Way to the Top

How Kentucky lapped the field to become an automotive champion.

AUTOMOTIVE INDUSTRY
The new 2020 Chevrolet Corvette Stingray is produced at General Motors’ plant in Bowling Green, Kentucky.
Photo courtesy of GM

by RON STARNER

Detroit’s been getting a lot of competition lately in the car and truck game, and that roar you’re hearing from the engine is the sound of Kentucky stepping on the gas pedal.

While it may come as a surprise to some Kentucky ranks first nationally in passenger vehicle production per capita, there’s perhaps no better indicator of the Bluegrass State upping its competitiveness in automotive manufacturing than the radically redesigned 2020 Chevrolet Corvette.

The first mid-engine Corvette ever produced by General Motors, the all-new Stingray emerged from the Bowling Green plant in Warren County in February, but it was turning heads long before that.

In January, a jury of 50 U.S. and Canadian automotive journalists named the Corvette the 2020 North American Car of the Year. The eighth-generation Corvette beat out the Toyota Supra and the Hyundai Sonata to capture the coveted trophy as the GM sports car entered its 68th year of production, but its first with the engine placed behind the driver.

GM had been preparing its Bowling Green plant for years for this leap — a move that AutoWeek said “upended the supercar landscape.” More than 400 new employees were hired to handle the workload of building a ground rocket capable of producing 490 to 495 horsepower and accelerating from zero to 60 mph in 2.85 seconds with the Z51 package.

“In 2015, GM invested $439 million for facility upgrades, including a new 450,000-square-foot paint shop,” said Rachel Bagshaw, communications manager at the Bowling Green Corvette Assembly plant. “In 2016, another $290 million was invested for vehicle assembly operation upgrades. For the first time in decades, GM added a second shift to support the production of the 2020 Corvette. More than 400 hourly jobs were added to support this product, increasing the plant’s workforce to more than 1,300.”

Left two photos courtesy of Toyota, the two right photos courtesy of Ford
Left two photos courtesy of Toyota, the two right photos courtesy of Ford

When the workforce expansion was first announced about a year ago, GM executives were quick to credit the ingenuity and work ethic of Kentuckians. “The Corvette’s iconic status owes so much to the men and women of Bowling Green, where it has been built exclusively for 40 years,” said Mary Barra, chair and CEO of GM. “This is the workforce that can deliver a next-generation Corvette worthy of both its historic past and an equally exciting future.”

Since 2011, GM has invested more than $900 million into Bowling Green plant upgrades. Recent projects include a new body shop, increased engine-building capacity, new paint shop and the addition of a Performance Build Center.

OEMs Set the Pace in Kentucky

GM is far from alone in betting big on Kentucky’s automotive manufacturing workforce. Two other large OEMs — Ford and Toyota — are keeping pace with major investments of their own. In late August 2019, Ford Motor Co. announced it would invest $550 million to upgrade its two Louisville factories ahead of the relaunch of the popular Ford Escape SUV. Most of that spending is going toward upgrading and modernizing the Louisville Assembly Plant on Fern Valley Road ahead of Ford’s release of the new Escape and Lincoln Corsair models.

Kentucky is the No. 1 producer of cars, light trucks and SUVs per capita in America.
Source: Kentucky Cabinet for Economic Development

The August deal follows a series of investments by Ford into its facilities in Jefferson County. In 2014, Ford announced two investments totaling $209 million in Louisville. In 2015, Ford launched a $1.3 billion investment adding 2,000 jobs in Louisville; and in 2017, the company pledged to spend another $900 million and add 500 jobs in Kentucky’s largest city.

Toyota Motor Manufacturing Kentucky (TMMK) has been on a similar path the last few years. In 2017, the Japanese automaker, the world’s largest, announced a $1.33 billion investment at its plant in Georgetown. Two years later, Toyota committed another $238 million toward upgrading those same facilities. The latest deal, announced last March, enables Toyota to add production of two models at the Georgetown plant: the Lexus ES Hybrid and the RAV4 Hybrid. Production of those vehicles began in mid-2019 and January 2020 respectively.

The March 2019 announcement “shows Toyota’s recognition and continued trust in the high-level skills and expertise of our fantastic team here in Kentucky,” said Susan Elkington, president of Toyota’s Kentucky plant. “This is also a further testament to Toyota’s long-term commitment to Kentucky, and our team is excited about what these changes mean for the future of our facility.”

Over 500 companies in Kentucky employ more than 100,000 people in automotive manufacturing.
Source: Kentucky Cabinet for Economic Development

Opened in 1988, TMMK is Toyota’s largest production plant in the world and employs about 8,000 workers. Products assembled in Georgetown include the Camry, Camry Hybrid, Avalon, Avalon Hybrid and Lexus ES models. The plant has a current capacity to produce 550,000 vehicles annually, along with 600,000 engines per year.

“We expect to maintain high volumes in 2020,” said Rick Hesterberg, corporate communications manager for Toyota Motor North America in Kentucky. “We will continue to add to our workforce as attrition dictates so we can maintain” a peak workforce of around 8,000 employees. “By 2025, Toyota’s global goal is to offer an electrified option (hybrid, plug-in, fuel cell, battery) on all Toyota and Lexus models.”

Suppliers Keep the Engines Revving

Since 2015, a total of 325 plant expansion announcements in the automotive manufacturing sector have occurred in Kentucky. Altogether, these new and expanded facilities have generated $9.75 billion in planned capital investment and the ongoing creation of 16,898 new jobs.

Large investments are not limited to OEMs alone. In 2019, Android Industries announced a $1.4 million investment into its tire and wheel assembly operation in Bowling Green; Bendix Spicer Foundation Brake committed $65 million to its plant in Bowling Green; Hyster-Yale Group pledged $25.7 million to manufacture lift trucks in Berea; and Richmond Auto Parts announced it would spend $21.8 million to make chassis and transmission components in Richmond.


“The Corvette’s iconic status owes so much to the men and women of Bowling Green, where it has been built exclusively for 40 years.”
— Mary Barra, Chair and CEO, General Motors

Other significant automotive investments last year in Kentucky included CMWA’s $112 million deal in Paris; Tower International’s $21 million expansion in Shepherdsville; Superior Battery Manufacturing’s $5.5 million project in Russell Springs; and LORD Corp.’s $4 million investment in Bowling Green.

Today, 523 facilities in Kentucky employ more than 100,000 people in automotive manufacturing, producing $4.6 billion in Kentucky automotive-related exports last year. Because of this productivity, Kentucky ranks today as the No. 1 producer of cars, light trucks and SUVs per capita in America.

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Inc. He has been with Conway for 20 years and serves as editor of the TrustBelt Report and lead organizer of the annual TrustBelt Conference. He also writes extensively for Site Selection and Conway's Custom Content Publishing Division. His Twitter handle is @RonStarner.

  





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