Thousands of cars and trucks are sitting unsold on auto dealers' lots.
North America's biggest carmakers are cutting production to keep pace with slower consumer demand, and stock analysts are lowering their expectations for financial performance.
But even as the auto industry slows down, some suppliers are gearing up with millions of dollars committed in expansions for future business.
``If you look at the short term, things are not really looking up,'' said Jim Gillette, director of supplier analysis for Northville, Mich.-based consulting group CSM Worldwide. ``Yet these new jobs are coming up in the long run.''
Three different molders announced expansions the week of Sept. 14, with Meridian Automotive Systems Inc. planning a $28 million plant in Fowlerville, Mich.; Nicholas Plastics Inc. preparing for an $18 million expansion in Allendale, Mich.; and Atlantic Automotive Components LLC set to spend $21.8 million in Benton Harbor, Mich.
``We are very proud to have secured a new contract with General Motors [Corp.] that will allow us to significantly expand our presence,'' said Terry Nicholas, president and chief executive officer of Allendale-based Nicholas Plastics.
There is no single cause for the rush in new manufacturing projects, Gillette said. Nicholas, for instance, has worked aggressively for years to seek new contracts, improving its status even as competitors fell by the wayside.
``They're a fairly small player in the marketplace, but they're a very solid player,'' he said. ``[Terry] Nicholas has done an awful lot of hard work to get this.''
Nicholas Plastics received a single business tax credit of $3.7 million from the Michigan Economic Development Corp. to help offset construction and other expansion costs. The company will break ground in October on a 112,000-square-foot addition to its 155,000-square-foot facility in Allendale.
Nicholas Plastics 11 years ago developed a proprietary molding system combining aspects of extrusion and blow molding, which is key to its five-year contract to produce molded-in-color body side moldings for GM, Nicholas said.
``We've been staying extremely focused on the niches we're in, and not trying to jump all over the board,'' he said.
The company's investment will include $13.6 million in new equipment and technology.
Nicholas expects to launch production by January 2006 with 100 new employees added to the existing base of 250 in Allendale. With that business secured, Nicholas hopes to leverage the additional capacity into even more contracts, with the potential to add at least another 100 to the workforce.
Dearborn, Mich.-based Meridian will build a 250,000-square-foot plant in Fowlerville to mold and paint bumper fascia. Meridian will receive a single business tax credit worth $2.2 million toward the project, which will add 250 jobs to the company payroll.
In Benton Harbor, Atlantic expects to add 71 jobs as part of its expansion. Dearborn-based Visteon Corp. owns 70 percent of the joint venture, which makes instrument panel components, subwoofers, consoles and door trim.
Atlantic will buy presses and assembly equipment for substrate production, Visteon officials said. Atlantic will receive a $707,000 state tax credit.