The North American auto industry is taking on a distinct drawl.
Throughout the past decade, auto manufacturers have gone south of the Mason-Dixon Line to house their new production plants, a shift that also is forcing suppliers to reconsider their locations and alliances.
There are new opportunities for established companies looking to move beyond the traditional manufacturing base of the northern United States and southern Ontario, and contracts for firms new to the auto business.
``The North American automotive core is not just in Detroit anymore,'' said Bruce Belzowski, senior research associate with the University of Michigan's Office for the Study of Automotive Transportation. ``Well, it is in Detroit - that hasn't gone away - but now it's a north and south corridor.''
Adding to the incentive to head south is the simple fact that those automakers building new assembly plants are the ones with the biggest potential for future growth. While individually the companies moving into the South - such as Honda, Nissan, and Hyundai - cannot overwhelm traditional Big Three automakers at home, together they are a force.
Last year, the North American assembly plants operated by Asian and European-based carmakers - com- monly called either ``transplants'' or ``new domestics'' - turned out a combined 3.5 million vehicles. By comparison, DaimlerChrysler AG produced 2.9 million cars and trucks in North America, Ford Motor Co. made 4 million and General Motors Corp., 5 million.
But by 2006, the new domestics are expected to turn out a combined 5.1 million vehicles, topping the individual output of the traditional North American carmakers.
That means a wider customer base for suppliers, but it also requires that they target the transplanted automakers that constitute the best business decision for them. Those contracts may force them to head into unfamiliar territory.
``This is an extremely important decision,'' Belzowski said. ``As a supplier you have to make more decisions than you ever did before about which companies you want to do business with.''
The southern flow of automaking began when Munich, Germany-based BMW AG selected Spartanburg, S.C., as its North American base, with a groundbreaking in 1993. Mercedes Benz AG - prior to its joining with Auburn Hills, Mich.-based Chrysler Corp. - moved into Vance, Ala., in 1997.
Successful outcomes there bred more development. Honda Motor Co. Ltd. launched production in Lincoln, Ala., this year, expanding from transplant operations in Ontario, Ohio and Mexico. Construction crews rapidly are transforming a cotton field into an assembly plant and supplier park for Nissan Motor Co. Ltd. in Canton, adding production beyond Smyrna, Tenn., and Mexico.
In April, South Korean carmaker Hyundai Motor Co. announced it would open its first North American plant in Montgomery, Ala.
In the past decade only one new assembly plant has headed into the traditional manufacturing stronghold of the northern states and southern Ontario - General Motors' plant in Lansing, Mich., which now is ramping up for production.
The southern step is creating a whole new climate for states and businesses alike.
Canton is a small town, about a 30-minute drive north of the state capitol of Jackson, with little industry before Nissan came to town. Its previous claim to fame was that it was used as a location for the 1996 film A Time to Kill.
Now bulldozers and cement trucks vie for space on the partially completed roads leading to the 2.5 million-square-foot assembly plant and its nearby supplier park. Nissan officials have made a temporary office out of a one-time church. Potential employees are going through testing and screening at a new training center just northwest of the plant site, its parking lot filled to capacity a full year before the launch of production.
The activity there is just the beginning. In about a year, about 4,000 employees will be working directly for Nissan in Canton, and another 2,000 reporting to suppliers.
Those suppliers stand to make their own impact. M-Tek Inc. of Manchester, Tenn., has broken ground for its interior trim plant adjacent to Nissan. The walls are going up at Plymouth, Mich.-based Johnson Controls Inc.'s seat assembly operation. CalsonicKansei North America Inc. of Shelbyville, Tenn., is investing more than $3.5 million to build front-end modules in Canton.
``Some people here still don't know how big of a change this is going to mean to this region,'' said C.R. Canup Jr., project director for the Mississippi Development Authority's Nissan implementation team. ``Its impact to Mississippi is going to be enormous.''
The migration already has made a difference to Lextron Corp., a 200-employee electronics assembly specialist that will become an automotive supplier through a joint venture with Visteon Corp. to make Nissan cockpits.
Lextron/Visteon Automotive Systems actually will work inside Nissan's walls, with 150 employees assembling cockpits sequenced specifically to the automakers' production schedule. It is a major shift for Lextron and its owner, Charles Doty, an African-American entrepreneur whose previous exposure to the industry has been centered around assembling wiring harnesses for GM and Delphi Corp.
``We take these opportunities very seriously,'' Doty said. ``Nissan came to Mississippi with the intention of finding qualified companies they could do business with, partner with.''
Lextron has a spotless record for its automotive customers, he said, as well as a growing business in fiber optics for the telecommunications and aerospace industries. Nissan's move into the South - combined with the molding capabilities within Visteon - gave it a boost that otherwise might have taken decades.
``It gives us a considerable amount of exposure, and we're certainly appreciative of the opportunities we have with Visteon and Nissan,'' he said.
Suppliers do not necessarily need to locate in each state that gains an auto plant; it sometimes makes no economic sense to do that, Belzowski said.
Instead, companies must weigh exactly who they want to do business with, then whether they can fill contracts from existing facilities. Extensive planning can permit just-in-time delivery even from factories in the more traditional manufacturing hubs, if there is ready access to freeways.
``As a supplier, people are finding that if you can get to [Interstate 75], you can supply everybody,'' he said.
For that matter, a plant in Georgia or central Tennessee could allow Tier 2 suppliers access to customers throughout the Sun Belt production sites. More anxious employees also could be available away from the assembly plant, Belzowski said.
Last year, Neaton Auto Products Manufacturing Inc. expanded into Rome, Ga., to mold interior trim, steering wheels, instrument panels and other components. The Eaton, Ohio-based company had seen more of its customers headed south, and when Honda announced its plans for Alabama, it decided to make the move.
From Rome, the company has easy freeway access to all of the new domestics in the South, and is delivering now to the new Honda operation, as well as Nissan's facility in Tennessee.
``As southern plants open down there, we hope to be able to get to more of them,'' said Vice President Kim Willetts. ``We think we're centrally located for access. There's a lot of business you can do there.''
Mississippi also is counting on picking up some of that overflow.
``We're not going to be sitting around licking our wounds if we don't get every plant,'' said Robert Rohrlack Jr., executive director of the Mississippi Development Authority. ``There are plenty of other companies who are going to be looking to locate here.''
Adapting to needs
The state is researching the specific needs the auto industry will have in Mississippi to encourage future growth, viewing Nissan's move as only a ``stepping-off point,'' Rohrlack said.
Canton schools are looking at implementing a multiyear polymer study program - similar to the one already in place in Petal, Miss. - to help it gear up for the new wave of polymer-based employment in the region.
Lextron/Visteon has hired its first employees, a small group that will oversee the launch. The reality of the auto industry's impact will hit the region full force within the next few months, as employment ranks swell for Nissan and its suppliers, Doty predicted.
``Maybe we're still stunned right now, but the fact is that we do have this now,'' he said. ``It's interesting to see what's happening.
``We've transformed cotton fields and soybean fields into a place that now will be an automotive assembly operation. That's quite a transformation from what used to make up our total industry in Mississippi.
``Now that we're moving into those technologies, it's going to be a tremendous thing to see. There are going to be opportunities we haven't even started to see yet.''