Auto Companies Accelerate Investment in Kentucky
As a center of automotive manufacturing, Kentucky is home to the largest Toyota production facility outside Japan. Other big names in the state include GM and Ford.
If three of the world’s largest automobile companies know a secret – there’s no better place than Kentucky to grow their business and introduce innovative new products – then it’s probably not a secret any longer.
The word is out. Ford, General Motors and Toyota have invested billions of dollars and employ thousands of workers in Kentucky. They have been joined in the Bluegrass State by more than 440 automotive suppliers.
Ford is significantly upping its investment in the Bluegrass State, pouring in $1.2 billion and creating 3,100 jobs at its two Louisville manufacturing operations. Helping to secure that investment was an incentive package from the state that built a solid business case for the automaker to expand in Kentucky.
That partnership between Ford and Kentucky has earned national recognition. The project was named 2011 Economic Development Deal of the Year by respected national magazine Business Facilities. The project, which was selected by a judging panel
of industry experts, emerged as the winner in a competitive field of 23 other big-ticket projects from across the country.
Ford is spending $600 million to transform its Louisville Assembly Plant (LAP) into the company’s most flexible facility. It will manufacture the next generation of the popular Escape and will have the technology to simultaneously produce other models, such as the Focus, Fiesta and Fusion, as demand grows.
“LAP will be capable of producing a variety of vehicles and a variety of platforms. It gives us the flexibility to put all of these vehicles down the same assembly line. It gives us the capability to switch product lines to meet demand and market changes,” says Marcy Evans, manufacturing communications manager for Ford Motor Co.
Ford also is investing $600 million in its Kentucky Truck Plant, also in Louisville, for production of the next generation of its Super Duty F-series trucks.
Ford is not alone in finding Kentucky a fast track for production. Together, Ford, GM and Toyota make so many vehicles that the Bluegrass State ranked fifth in the nation in 2011 for the number of light vehicles produced. And that ranking reflects the fact that Ford’s Louisville Assembly Plant was out of commission during most of the year for retooling.
Now more vehicles – and more jobs, more innovations and millions of dollars in new investments – are on the way. In 2011 alone, more than 70 automotive-related companies announced that they were opening or expanding in Kentucky.
They are attracted by the unique advantages of doing business in Kentucky, including a skilled and productive workforce, a highly developed transportation network, a central location, the low cost of doing business, targeted incentives and partnerships with state and local officials that help them compete successfully in the global marketplace.
In Bowling Green, the only place where it manufactures the Corvette, General Motors is investing more than $131 million and creating 250 new jobs to prepare for production of the latest version of its iconic sports car.
An economic impact study by the Kentucky Cabinet for Economic Development shows that GM’s existing and new employment in Bowling Green is responsible for nearly 1,950 direct, indirect and induced jobs that will provide an annual $222 million boost to Kentucky’s gross domestic product.
Made in Kentucky
In a little more than two decades, Toyota has transformed empty fields at Georgetown into its largest production facility outside Japan, employing 7,000 team members directly and creating nearly 20,000 additional jobs in Kentucky and other states.
Toyota announced at the end of 2011 that Camry sedans made in Kentucky are being exported to South Korea. Initially, 6,000 sedans will be shipped to South Korea annually, marking the first time the U.S.-assembled Camry has been exported outside of North America.
“Kentucky and Toyota have a strong partnership, and together continue to create opportunities for Kentuckians,” says Larry Hayes, Kentucky Cabinet for Economic Development secretary. “Not only is the Toyota Camry the best-selling car in America, the Kentucky-made product is now being exported to international destinations.”
The location of Toyota in the 1980s opened the door for hundreds of automotive suppliers, especially from Japan and Europe, to also make Kentucky their home. Today, Kentucky boasts over 440 motor vehicle-related companies that employ more than 68,000 people. In fact, Kentucky ranks third highest in auto industry-related employment as a percent of total state employment among the top motor vehicle producing states.
Hitachi Automotive Systems Americas Inc. selected its Harrodsburg plant as the place where it will produce lithium-ion battery packs in North America. The company is investing about $12 million in the facility and will create 60 new jobs. Hitachi also announced last year that it would locate a new manufacturing facility in Berea, its third Kentucky facility, to produce motors that will power advanced hybrid electric-powered automobiles, including the Chevy Volt.
In Marion County, Wilbert Plastic Services Inc. announced in December 2011 that it will create 150 jobs thanks to the addition of a new product line to make interior components and associated parts for the 2013 Ford Escape and other models produced at the Louisville Assembly Plant.
GR Spring & Stamping, an automotive-parts supplier based in Michigan, is expanding its Richmond facility. The company will invest $1.7 million to add 30,000 square feet to its facilities and add 25 employees to its 103-person workforce over the next few years.
In Hopkinsville, DENSO Air Systems recently located its newest auto parts manufacturing facility. The $4.2 million Japanese investment will add 105 new jobs over the next several years. The operation produces aluminum pipes, tubes and hoses for the automotive industry.
“Not only do we look forward to expanding our North American operations, but we are also genuinely excited to become part of the Hopkinsville community,” said Jerry McGuire, DENSO Air Systems Michigan president. “We are confident we chose the right location for our third manufacturing facility in North America, and we have great confidence in the outstanding workforce in Kentucky.”
Kentucky Revved Up on Auto
Kentucky is home to more than 440 automotive-related facilities including four major auto-assembly plants operated by Ford, General Motors and Toyota. The industry’s impact on the economy would be hard to overstate. For example:
- In 2011, more than 70 motor vehicle-related facilities located or expanded in Kentucky, representing more than $1.1 billion in investment, according to the Kentucky Cabinet for Economic Development.
- Kentucky ranks fifth in the nation in car production.
- More than 10 percent of the cars and trucks produced in the U.S. are made in Kentucky.
- Nearly 17 percent of the state’s manufacturing workforce was employed in motor vehicles, bodies and trailers, and parts production in 2009.
- Kentucky’s auotmotive industry strength results from a productive workforce, central location, low cost of business, highly regarded workforce-training programs and a pro-business government.