A wave of automotive suppliers is moving South, setting up shop in towns in Mississippi and Alabama to supply new auto assembly plants preparing to open for business.
Nissan Motor Co. Ltd. will launch production of cars and trucks in Canton, Miss., by the summer of 2003. Honda Motor Co. Ltd. is set to open an assembly plant in Lincoln, Ala., by November to build its popular Odyssey minivan.
Those new operations are spurring a series of new plants in the Southern states including plastics processors supplying everything from bumpers to interior components.
Nissan officials estimate its suppliers will spend $140 million on new plants, creating about 1,000 jobs, in addition to its own $930 million investment at Canton.
CalsonicKansei North America Inc. announced July 17 that it will invest about $3.5 million for a 25,000-square-foot plant on the Nissan campus at Canton to assemble front-end modules for the automaker, including injection molded bumper fascias.
CalsonicKansei - which recently shifted its corporate offices to Shelbyville, Tenn., from Farmington Hills, Mich. - also is building a $17.3 million plant in Vicksburg, Miss., to provide exhaust systems, radiators and condensers for Canton.
Dearborn, Mich.-based Visteon Corp., meanwhile, has formed a new joint venture with Lextron Corp. to assemble cockpit modules and front-end systems for Nissan. Lextron/Visteon Automotive Systems will go into a 97,000-square-foot facility located within 100 yards of Nissan's assembly plant.
There is no processing planned for the site at this time, but employees will assemble a variety of plastic components produced elsewhere, Visteon officials said. Those include headlights and reservoir bottles for the front-end systems and instrument panels, consoles and air bags for the cockpits.
``We are committed to a diverse supply base, and these supplier companies reflect that approach,'' Emil Hassan, senior vice president of North American manufacturing, purchasing, quality and logistics for Nissan, said during a special event for the first suppliers named for the plant. He highlighted that Lextron is a local firm and minority owned.
Lextron is a Jackson, Miss.-based supplier that specializes in wiring systems for the auto, telecommunications and defense industries. Owner Charles Doty, who is black, launched the company with 10 employees in 1991. It now has more than 200.
Johnson Controls Inc. of Plymouth, Mich., will build a 120,000-square-foot plant in Canton to supply seating for Nissan but will not have any plastic processing on site.
Across the state line in Alabama, Hunjan Moulded Products Ltd. of Markham, Ontario, has signed a letter of intent to renovate a building on a former U.S. Army base to injection mold interior and exterior components.
The plant is the first industrial development at the former Fort McClellan in Anniston, Ala., and eventually will employ about 200.
``We've had a lot of good response from suppliers,'' said Billy Joe Camp, executive vice president for the Economic Development Partnership of Alabama. ``Alabama's just opening to the auto sector tremendously.''
Suppliers already with operations near northern assembly plants in both the U.S. and Canada are looking to sites that can serve customers throughout the South, he said, while existing processors across the South are looking to add auto contracts to their work load.
``It's been a good multiplier for our industrial base,'' he said. ``They're evaluating more and more what they can do.''
The auto base is not completely secure, though. Tennessee's Del-Met Corp., which molds wheel trim products and hubcaps for use in Nissan and General Motors Corp. vehicles, has closed a 120-employee plant in Portland, Tenn., as part of its restructuring. At the same time, though, the company is investing up to $1 million in improvements at its Winchester, Tenn., plant so it can better serve automakers.
It also has shifted its corporate office to Cool Springs, Tenn., from Nashville, reflecting its overall plan to reshape the company, said Vice President Keith Truelove.
``We're trying to get into more Tier 1 businesses rather than Tier 2,'' he said. ``A lot of it has to do with the low margins and high expectations on the Tier 2 suppliers.
``In this business, you constantly have to reinvent yourself.''