Vehicle Sales Soar to Record Levels in 2015
In 2009, the American auto industry was enfeebled and on the verge of collapse.* Not only had auto production and sales cratered at a dizzying rate, tens of thousands of Americans were being laid off from jobs in various aspects of the industry. Presidents Bush and Obama’s efforts to revive the industry by injecting emergency bailout assistance also faced intense opposition, with widespread calls for the federal government to refrain from intervening and infusing critical funds to resuscitate the industry. However, the emergency federal funding proved to be tremendously important in turning around the fortunes of General Motors and Chrysler, and their revival generated a panoply of positive effects for the nation’s other major industry producer (Ford). The dozen or so foreign automakers operating largely in the SLC states also benefitted from the improving national and regional economic picture on the automotive front and demonstrated strong progress in terms of production, sales and expansion.
Tire Manufacturing in the SLC States: Continuing to Roll Forward
In a move that further reinforced the role of the SLC states as the tire manufacturing focal point of the country, the Japanese company, Toyo Tire, announced in December 2013 that it was expanding its manufacturing facility in White, Georgia (in Bartow County, a location north of Atlanta) by adding 700,000-square-feet to the company’s current 2 million-square-foot facility by 2017. The expansion would involve an injection of $371 million to the facility and create 650 new jobs. The plant manufactures tires for premium light trucks and passenger cars. Back in 2004, Toyo established its first North American facility at its present Georgia location. Since the initial contingent of 81 employees who manufactured the plant’s first tires in 2006, the location currently has more than 1,000 employees. Tire manufacturers like Toyo in Georgia, Hankook in Tennessee and Bridgestone/Continental/Michelin in South Carolina continue to expand and re-assert the role played by the SLC region as a magnet for automobile manufacturers and automotive parts suppliers.
Source: Atlanta Business Chronicle, December 6, 2013
For a recent publication on tire manufacturing in the SLC, see SLC's most recent Regional Resource, Tire Manufacturing: Southern States Roll to the Top.
Auto: The Resilient South
A great deal has been written about the complex and overwhelming challenges confronting the American automotive industry – mostly domiciled in the Midwest – in the last few decades.1 Researchers have demonstrated the rapidly shrinking portion of American-made new car and noncommercial light truck sales as a percentage of total U.S. sales: in 1997, the Big Three (General Motors, Ford, and Chrysler) accounted for 71 percent of new car and noncommercial light truck sales, while Asian automakers' sales totaled under 25 percent; by 2007, the Big Three's share had plunged to 51 percent while the Asian automakers' share had propelled to 42 percent. Toyota outsold GM in the first quarter of 2008 (2.41 million compared to 2.25 million) and there is speculation that 2008 will be the year when Toyota unseats GM in global sales.
Researchers have also noted the dire financial fortunes of the Big Three as they hemorrhage vast amounts of cash and battle a range of structural problems, including sizable pension and health care obligations. Concurrently, researchers have highlighted the thriving automobile sector in a number of Southern states, given the increasing number of foreign automakers establishing assembly plants in this part of the country. In stark contrast to the difficult fiscal positions of such states as Michigan and Ohio –primarily as a result of the contracting automobile sector – the industry continues to flourish in the South, generate billions of dollars in economic impact and create thousands of direct and indirect jobs.
In light of the negative effects of a slowing national economy, how is the industry currently faring in the South? Does it still continue to be a major player in the region's economic calculations? Learn how the automotive industry in the South is coping with the deteriorating national economy, one that is either already enmeshed or lurching very close to a recession.
Prior to delving into the industry's recent performance in the South, it is appropriate to quickly review why the region has attracted such an impressive roster of foreign automakers in the last 25 years or so. Researchers highlight the following factors:
The Drive to Move South: The Growing Role of the Automobile Industry in the South (remarks)
It is a great honor to be here this morning and I thank Commissioner Kisber for extending this invitation to me and to The Council of State Governments. Established in 1933, The Council works primarily with state legislatures in tracking trends, carrying out research and analysis and promoting state interests. While I work for The Council's Southern Office, the Southern Legislative Conference (SLC) in Atlanta, The Council is headquartered in Lexington, Kentucky and also has regional offices in New York, California, Illinois and Washington, D.C.
My remarks this morning are based on a detailed report I completed in 2004 entitled The Drive to Move South: The Growing Role of the Automobile Industry in the SLC States and my ongoing research on this topic. My presentation comprises three broad areas. Part I contrasts the recent record of domestic and foreign automakers in the U.S.; Part II provides a sampling of the latest news regarding foreign automaker operations in the South; and Part III, identifies why the South has become such an attraction to foreign automobile assembly plants.
The current state of America's automobile industry is a study in stark contrasts. On the one hand, you have the Big Three (General Motors, Chrysler and Ford), the major domestic automakers – domiciled mostly in the Midwest – hemorrhaging vast amounts of cash and battling a range of structural problems. On the other, you have an increasing roster of foreign automakers – located mostly in the South – thriving financially and generating a panoply of positive economic benefits, locally and regionally. The fundamental transformation of the American automobile industry, a process that has been in play for several decades now, continues primarily at two levels: one, the shrinking percentage of vehicles manufactured and sold by the Big Three as a proportion of total vehicles and two, the emergence of the South as the locus of automotive activity in the United States with a host of foreign automakers establishing manufacturing plants in several Southern states.