Record Sales, Great Workers — But Maybe Not Forever

While leaders of Alabama’s big four automotive companies bragged to suppliers about record years, third shifts and even brighter plans for 2013 — a cold chill shot through the meeting room as Mercedes-Benz U.S. International CEO Markus Schaefer noted competition from south of the U.S. border and cautioned, “Our business is not guaranteed forever here.”

The annual meeting of the Alabama Automotive Manufacturers Association in Mobile is a chance for suppliers and automakers to make connections and it’s generally a pep talk for the industry.

Each of the automakers had great news to report.

Mercedes-Benz. The company has just concluded a “remarkable” year, its best ever, with the United States taking over as the automaker’s best market. The Vance operation made more than 180, 000 vehicles last year, Schaefer said, exporting more than half to some 135 markets. That’s not as many as Honda and Hyundai, he acknowledged, but noted that the price for a Mercedes starts at about $80, 000. Sales in 2012 hit $8 billion with $5 billion in exports, he said, ranking his company as the state’s leading exporter. While the state has won international headlines for attracting Airbus, Schaefer noted that the aircraft plant represents a $600 million investment while Mercedes is now nearing $2.4 billion.

Honda Manufacturing of Alabama. Already the light truck center for Honda and planning to add Acura to the Odyssey, Pilot and Ridgeline products produced at the Lincoln plan, Vice President Mike Oatridge said his company was looking for creative solutions to get more production without overtaxing equipment or workers. The newest solution, he said, is a four-day, 10-hour-a-day work week that makes it easy to schedule overtime on Fridays and to keep workers happy with flexibility to reschedule around big events like the national championship football game.

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Hyundai Motor Manufacturing Alabama. Robert Burns, senior manager for human resources and public relations, said the company’s Elantra model, made at the Montgomery plant, won honors as the North American car of the year, the plant produced its 2 millionth car in December, that it had 22, 000 applicants for fewer than 1, 000 slots in its new third shift, and that its 3, 100 workers are producing 1, 500 cars a day. Next year he anticipates that the Montgomery plant will produce 200, 000 Sonatas and 188, 000 Elantras.

Toyota Motor Manufacturing Alabama Inc. Noting that his brand is number one in the world, President Jim Bolte said the Huntsville engine plant is the only one in the U.S. making four-, six- and eight-cylinder engines, that it’s expanding its V-6 production, that it makes engines for eight of the 12 models produced in the U.S., that it made 500, 000 engines in 2012 and expects that to increase in 2013 and that the company is working toward a vehicle that is powered by a hydrogen fuel cell.

But world markets are complex, the auto execs said. They urged changes in tariff policies — “tariffs could impact our business in a heartbeat, ” said Schaefer — and changes to the school system so it provides a more trade-oriented program to supply workers for the state’s burgeoning manufacturing industry, and Hyundai’s Burns issued a reminder to be wary of unions moving into the industry.

Volkswagen’s choice of Mexico for a new plant “should be a wake up call, ” Schaefer said. Good work force and favorable trade agreements have made Mexico a strong competitor to the American South, and “our business is not guaranteed forever here.”

Schaefer himself has been promoted, the company announced, and he is headed back to Germany where he will be responsible for product planning, while Jason Holt will take his place as head of U.S. operations.

Nedra Bloom

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