hat do you do in an industry that was estimated
in 2003 to have global over-capacity equivalent to 40 OEM assembly
plants? Compete, that’s what.
That’s what NAFTA’s 10-year-old partners have been doing for automotive investment, whether against each other or, increasingly, banding together against the rest of the world. Sometimes the companies do that too. Take Ford and General Motors’ six-speed transmission partnership, which will see GM invest US$350 million in Warren, Mich., and Ford invest $370 million at its plants in Sterling Heights, Mich., and Sharonville, Ohio.
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| ALL BASES COVERED: In addition to a 5,000-job,
$875-million growth plan that includes projects in Georgia, Alabama, Ohio and China, Honda Motor Co. has entered into a new lease at this import facility at the Port of Portland (Ore.), where the company will hike imports to some 120,000 annually.
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One out of 10 jobs in the U.S.
is considered auto-related, and in Canada it’s one in seven. So addressing
the North American auto sector is virtually synonymous with addressing its
core manufacturing economy.
In each of North America’s three major nations, the
supplier park is coming to be the racy new model. And the concept takes
on added luster in the face of increasingly snarled port, rail and truck
traffic.
In remarks to AIAG/AutoTech in Detroit in September
2004, ChryslerGroup President and COO Dr. Dieter Zetsche sketched out how
his company’s supplier park vision will come to be in Toledo, where the
company’s original $1.2-billion investment has come under scrutiny because
of a recent federal appeals court decision calling Ohio’s machinery and
equipment tax breaks unconstitutional.
The new project, still proceeding apace, carries a
$900-million price tag, and involves the co-location of suppliers The Kuka
Group (body shop operations), Durr Industries paint shop operations), and
Hyundai Mobis (chassis assembly). The physical footprint will include a
250,000-sq.-ft. (23,225-sq.-m.) facility to weld and assemble vehicle bodies;
a 400,000-sq.-ft. (37,160-sq.-m.) paint shop; and a 200,000-sq.-ft. (18,580-sq.-m.)
rolling chassis module building.
Tom LaSorda, Chrysler Group COO, said supplier investment
would equate to $300 million in savings, “enough to pay for one additional
derivative product.” Key to the project was an eight-year agreement signed
in December 2003 with the United Auto Workers.
“As many as twelve additional suppliers could become
involved in this single project,” said Zetsche.
That number of suppliers is already present at Ford’s
$250-million Chicago Manufacturing Campus, which officially opened in August
2004.
“When we talk about ‘bull’s-eye sourcing,’ this is
exactly what we mean,” said Tony Brown, vice president, Ford Global Purchasing.
The 1,400 employees at Brose North America Inc., Decoma
International Inc., Facil LLC, Flex-N-Gate, Lear Corp., Plastech Engineered
Products Inc., Summit Polymers Inc., S-Y Systems Technologies America LLC,
TDS Automotive, Tower Automotive Inc., Visteon Corp. and ZF Lemforder Corp.
share four multi-tenant buildings containing 1.5 million sq. ft. (139,350
sq. m.) of manufacturing and office space. Some of the supplying goes between
suppliers, as well as directly to assembly.
Sometimes the supplier park is less formal but no less
effective, even on land formerly occupied by an OEM. Such is the case in
Saginaw, Mich., where in March 2004, construction began on a $9-million
building where three companies will eventually invest up to $60 million
in processing operations on aluminum engine blocks for GM Powertrain’s Saginaw
Metal Casting Operations, which is investing $80 million and adding 112
jobs itself.