ALABAMA AUTOMOTIVE MANUFACTURERS ASSOCIATION

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1 ALABAMA AUTOMOTIVE MANUFACTURERS ASSOCIATION SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 47

2 AUTOMOTIVE MANUFACTURING ALABAMA HONDA MINTS A LUX SUV Luxury level technology and design make the 2014 Honda MDX that started rolling off the line last year in Lincoln a milestone in Alabama auto manufacturing. BY GAIL ALLYN SHORT // PHOTOS BY CARY NORTON SPECIAL SUPPLEMENT Last December in tiny Lincoln, just off the Interstate 20 corridor in Talladega County, Honda workers celebrated the 3 millionth vehicle as it rolled off of the plant s assembly line. Mass production at the Honda Manufacturing of Alabama plant began in November Since then, the facility has become the sole production source for Honda s Odyssey minivan, the Pilot sport utility vehicle and the Ridgeline pickup truck. But last spring, workers began assembling the first Acura built in Alabama and the first luxury model for the Alabama plant. It s already boosting sales and getting rave reviews for technology and design. The 2014 Acura MDX luxury SUV was a finalist for the North American Truck/SUV of the Year but was edged out by the General Motors Silverado, according to a news conference at the North American International Auto Show. Honda describes the new Acura MDX SUV s sleek exterior and interior as Executive Aero Sculpture. The car this year, says HMA Vice President Mike Oatridge, weighs less than the previous version. From the old MDX to the new MDX, it went through a pretty good diet plan, says Oatridge. We dropped about 275 pounds off of the total weight of the car by utilizing many types of materials, such as aluminum. The new MDX is more than 193 inches long, 77.2 inches wide and 67.6 inches in height. It can carry up to seven passengers, is equipped with adaptive cruise control and offers available options, such as keyless entry and start. The car also comes with what is called the Acura Jewel Eye LED headlights. The dual headlights on the outside are among the most distinctive features, Oatridge says. It s a very aggressive type of styling, and people are very much drawn to it. The MDX is powered by a direct-injected, 24-valve, 3.5-liter V6 engine that produces about 290 horsepower. It has an EPA fuel economy rating of 18 mpg in the city and 27 mpg on the highway. Honda Manufacturing of Alabama Vice President Mike Oatridge shows off a 2014 Acura MDX luxury SUV. The company describes the styling as Executive Aero Sculpture. February 2014 BusinessAlabama.com 81

3 AUTOMOTIVE MANUFACTURING Left: Inside the 2014 Acura MDX, up to seven passengers can enjoy the spacious interior equipped with adaptive cruise control and other luxury features. Below: On May 2, 2013, HMA associates celebrated the start of mass production of the 2014 Acura MDX. A front-wheel-drive version of the MDX gets 20 mpg in the city and 28 on the highway. There is a lot of expectation from our customers for value, says Oatridge, and that value comes in many different ways, whether it s fuel economy, styling or quality. But probably the highest expectation is in the quality of the vehicle. If we can provide high value to our customers, then they buy our product. The manufacturer s suggested retail price for the new Acura MDX starts around $42,290 and AutoGuide.com, an online, new car shopping consumer resource, named it as Utility Vehicle of the Year in December Oatridge says the company s efforts to attract discriminating consumers wanting both luxury and quality required sizable investments in the Lincoln plant. This market is very competitive now and because of that, we had to make several changes here to ensure that we were competitive, Oatridge says. We have invested about $450 million into this plant in the last 24 months. We ve added about 400 jobs. And a lot of that was to allow us to meet the quality expectations and the production expectations of a luxury customer. We have to make sure the luxury features operate and function the way they are supposed to before they leave the factory. To do that, we have actually expanded our vehicle quality area substantially to allow us to test all of the features to make sure they function as they are designed to function. The car also has a number of safety enhancements, such as Collision Mitigation Braking System, Lane Keeping Assist, Multi-Angle Rearview Camera, Blind Spot Information and a driver s knee air bag. Attention to safety helped Honda s 2014 Acura MDX capture a top Five-Star Overall Vehicle Score in the National Highway Traffic Safety Administration New Car Assessment Program. Moreover, the new Acura MDX also was selected as a Top Safety Pick for collision safety by the Institute for Highway Safety, as was the 2014 RLX. Mass production of the 2014 Acura MDX SUV began at the Talladega County plant on May 2, As of November 2013, sales of the MDX were up 80.8 percent compared to the same time the year before, says Honda spokeswoman Samantha Corona. Oatridge says that between 10 and 15 percent of the units built in the Lincoln plant are exported. The cars are shipped primarily to markets in Central and 82 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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5 South America, the Middle East, Russia, Asia and to several Oceana nations. With the addition of the Acura MDX, HMA is now exporting cars for the first time to China and South Korea, Corona says. The Lincoln assembly plant now has more than 4,000 full-time associates working in the $2 billion facility. The plant has an annual capacity to produce some 340,000 vehicles like the 2014 Acura MDX, as well as V-6 engines. We have invested about $450 million into this plant in the last 24 months. We ve added about 400 jobs. And a lot of that was to allow us to meet the quality expectations and the production expectations of a luxury customer. Mike Oatridge We have worked very hard with the state of Alabama at the state level, county level and at the city level, and they all have provided good support to us in hiring and training our people, Oatridge says. In fact, the state, through AIDT, built a training facility for us and helped train the diverse groups of people who went to build cars here. In 2005, Honda partnered with the AIDT, the state s training agency, to create a training facility in Pell City that simulated the paint line at the Honda plant so workers could learn the process. Everyone who works here is very proud of the products that we build, Oatridge says. The value of our car comes from the associates who work here. They have a lot of pride in that car because they understand that our job is to make our customers happy. By being nominated for North American Truck of the Year, it really quantifies that our customers are happy with the products we re selling and that we are focused on the right spot. So from a morale point of view, it s kind of that gratification of a job well done. Gail Allyn Short is a freelance writer for Business Alabama. She lives in Birmingham. 84 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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10 AUTOMOTIVE MANUFACTURING Left: AAMA Executive Director Lew Drummond SWEET SPOT IN THE SOUTHERN AUTOMOTIVE CORRIDOR Recent investments in intensive production schedules have increased the competitiveness of Alabama-produced vehicles and engines in the marketplace. New job and career opportunities are greater now than ever before. BY LEW DRUMMOND // PHOTO BY LAURA CHRAMER Strong demand and intensive production schedules look to define 2014 for Alabama s automotive manufacturers and suppliers. The Alabama Automotive Manufacturers Association, founded in 2001 to promote the state s auto industry, will host the 2014 Southern Automotive Conference (SAC) October 8-10 at the Sheraton/BJCC in Birmingham. Announcements will be forthcoming regarding registration, programs and exhibitors. Hosting the SAC event gives us the opportunity to join with our sister organizations MAMA (Mississippi), TAMA (Tennessee) and GAMA (Georgia) to make this an outstanding regional automotive event. Alabama manufacturers and suppliers continue their intensive production schedules to meet demand. Sales and production numbers for 2013 for Alabama made vehicles are expected to increase over last year s numbers. That is an excellent barometer reading for the health of the industry. Honda will celebrate exceeding 3 million vehicles produced in its Alabama manufacturing facility since it began production in Mercedes continues to enjoy high demand for its current vehicle lineup, in addition to the much-anticipated production of the C-Class beginning next year. Hyundai has expanded its production facilities to meet the continued demand for its popular vehicles. Along with the OEM s increased production volumes is a corresponding increase in shipments from the many suppliers that make up the supply chains, so critical to the Alabama automotive industry. Almost weekly, announcements are made about a supplier expanding its operations or of a new supplier establishing operations in Alabama. Alabama has the largest single-site Toyota engine plant in the world located in Huntsville. A full complement of engine configurations V-8, V-6 and 4-cylinder are manufactured at the site that employs approximately 1,000 team members. Also in Huntsville is the Navistar diesel engine plant occupying more than 700,000 square feet of manufacturing space, producing the MaxForce 5, MaxForce 7 and 6.4 liter PowerStroke engines. Since the economic recovery began in Alabama, most of the OEM plants and their suppliers have been working three shifts daily and six or seven days a week to meet customer demand. This level of production intensity in a highly automated environment has created growing requirements for highly skilled personnel. Most of the automotive manufacturing plants and suppliers have a constant demand for qualified industrial maintenance technicians. To meet this demand, partnerships are being formed among the plants and educational institutions at the high school, two-year college and some four-year university levels. Gov. Robert Bentley issued Executive Order Number 36 on January 15, BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

11 establishing the Governor s College and Career Ready Task Force. The task force is chaired by Bentley and co-chaired by the lieutenant governor, the speaker of the House, the Senate pro tem and the secretary of commerce. Under Executive Order Number 36, the appointed statewide task force has been heavily engaged in developing a plan to increase participation in developing workers technical skills that will meet industry s needs. Two other initiatives in the state designed to provide a comprehensive approach to developing the technical skills needed by the automotive industry are the Consortium for Alabama Regional Center for Automotive Manufacturing, known as CARCAM, and the Shelton State/Mercedes Industrial Mechatronic and Automotive Technician Programs. CARCAM involves 11 community colleges with a mission to provide a sustainable manufacturing education delivery system by providing curriculum development, technical education programs, student outreach and professional development opportunities to address current and future education and manufacturing industry needs for the 21st Century. The Industrial Mechatronics program is a seven-semester program that integrates mechanics, electronics and computer science into the manufacturing process of Mercedes products. The Automotive Technician program, which is a three-semester program, involves applying students mechanical and electrical automotive skills to the Mercedes Productions System. Both of these programs are designed to provide a pipeline of highly qualified potential employees. Currently there are 115 students enrolled in these programs. The Alabama automotive manufacturing industry outlook is good. Improved manufacturing productivity and efficiencies are in place to increase the competitiveness of Alabama-produced vehicles and engines in the marketplace. New job and career opportunities are greater now than ever before. Alabama continues to be the sweet spot in the Southern Automotive Corridor. Lew Drummond is the executive director of the Alabama Automotive Manufacturers Association. February 2014 BusinessAlabama.com 51

12 AUTOMOTIVE MANUFACTURING RECENT EXPANSIONS & NEW PROJECTS Source: Economic Development Partnership of Alabama, edpa.org COMPANY COUNTY PRODUCT 2013 JOBS CREATED INVESTMENT (MILLIONS) Donghee America Lee Fuel tanks 80 $48 (New) HS Automotive Alabama Inc. Coffee Weather stripping, tubing, hoses 100 $12 (Expansion) REHAU Cullman Bumper assemblies 200 $115 (Expansion) Mando America Corp. Lee Automotive seat components 70 $35 (Expansion) Toyota Motors Manufacturing Alabama Huntsville Engines N.A. $150 (Expansion) ISE Inno-motive Systems U.S. Tuscaloosa Structural and protective systems 25 $5 (Expansion) 2012 AMTEX Jasper Carpet and interior trim components 110 $27 (Expansion) Honda Manufacturing of America, LLC Montgomery Vehicle and engine manufacturing 115 $50 (Expansion) DAS North America Inc. Montgomery Car seat components 240 $50 (New) Bridgewater Interiors Calhoun Automotive seats 87 $5.5 (Expansion) 2011 Hysco Butler Steel coil, sheeting for chassis and automotive body parts 40 $22 (Expansion) Honda Manufacturing of Alabama, LLC Talladega Vehicle and engine manufacturing 275 $140 (Expansions) Hyundai Motor Manufacturing Alabama Montgomery Automotive engines 214 $173 (Expansion) Mercedes-Benz U.S. International Tuscaloosa Vehicle manufacturing 400 $350 (Expansion) North American Lighting Colbert Automotive lighting products 250 $35 (Expansion) 2010 Plasman Corporation, LLC DeKalb Plastic injection mold, painting, assembly of exterior parts 200 $12.0 (New) Gestamp North America Inc. Jefferson Stamping 30 $28.0 (Expansion) Fehrer Automotive Etowah Molded foam parts and seat pads 110 N.A. (New) SaeHaeSung Alabama Corp. Covington Stamping 150 N.A. (Expansion) Toyota Motor Manufacturing Alabama Madison Four-cylinder engines 240 N.A. (Expansion) 2009 Royal Technologies Cullman Interior trim components 400 N.A. (New) Faurecia North America Tuscaloosa Seat assemblies 195 $15 (New) Commercial Spring and Tool Company Limited Chambers Metal stamped parts and tool & die assemblies 75 N.A. (New) INZI Controls Alabama Inc. (formerly Toledo Molding and Die) Coffee Injection and blow molded automotive parts 200 N.A. (Expansion) Seohan Auto USA/Seohan NTN USA Lee Axles and rear carrier assemblies 75 $16.5 (Expansion) 2008 AJIN USA Chambers Metal stamping body parts 450 $88.7 (New) Wooshin USA (formerly MP-Tech America) Chambers Plastic molds and precision parts 250 $30 (New) 52 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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14 AUTOMOTIVE MANUFACTURING MERCEDES GEARS UP FOR C-CLASS Landing luxury sedan production in the Vance plant is a milestone for Mercedes and Alabama. BY GAIL ALLYN SHORT // PHOTOS BY CARY NORTON When Jason Hoff became president and CEO of the Mercedes-Benz U.S. International Inc. plant in Vance in July 2013, the nation s auto industry already was in full recovery mode. Following the 2008 downturn, many Americans were reluctant to buy new vehicles. But by 2013, the economy had improved. More consumers were in a buying mood, and officials at the Vance assembly plant were making plans to launch production of the new 2015 Mercedes-Benz C-Class sedan. The preparations included the August opening of a brand new, 30,000-squarefoot training center in Tuscaloosa County where 1,000 new workers would come to learn how to build the new C-Class the Mercedes way. Then, several months later in December, Mercedes opened its own $70 million logistics center to house parts needed to assemble vehicles at the plant. We re in the middle of a big growth period for us, says Hoff, not only from a volume standpoint, but also in terms of employment and in terms of the size of our plant. So we re in the midst of growing to levels that we didn t think we would ever achieve when we started this plant 20 years ago. So all of Mercedes is in a big growth, expansion period at the moment, and most of that is driven by positive trends in the marketplace. The C-Class made its official debut in January at the 2014 North American Auto Show in Detroit, and the company is betting that the new sedan will be a Mercedes officials say production at their Alabama plant outpaced the record 182,000 vehicles that rolled off the line in Vance in Final figures will be released later this year. 54 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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16 AUTOMOTIVE MANUFACTURING hit with consumers when it goes on sale this fall. Mercedes is in tight competition with other luxury brands, like Audi and BMW, just as luxury cars are gaining popularity. In fact, the three automakers have battled over the years for the top spot in terms of volume sales. But according to a report on new vehicle sales by Motorintelligence.com, Mercedes-Benz is now slightly ahead of BMW, with year-to-date sales figures in November 2013 showing Mercedes-Benz at 298,509 and BMW of North America Inc. at 271,891. There aren t as many [luxury market] players as there are of the higher volume manufacturers, Hoff says, but the competition is extremely fierce among the three Mercedes, Audi and BMW when looking at the NAFTA U.S. region. All of the companies are striving to bring out the latest and greatest in products. I would say the competition amongst the luxury producers is as strong and as fierce as it s ever been. Production of the new Mercedes- Benz C-Class is starting more than two decades after the company s 1993 announcement that it planned to open a North American plant in Vance to build the M-Class sport utility vehicle. The production lineup later expanded to include the R-Class crossover vehicle in 2005 and the GL-Class SUV in Besides the addition of the C-Class, a fifth model, a new SUV, will be added to the lineup later in MBUSI reports that it exports some 60 percent of all its vehicles, accounting for more than $1 billion annually in worldwide exports. The C-Class will be the first sedan produced at the Vance plant, according to a company press release. And of the C-Class model, it says, Overall, its innovations and refined equipment and appointments feel like an upgrade to a higher class. Among its standout features is the lightweight construction due to a combined usage of aluminum and steel parts and ultra-high-strength steels. As a result, the car is about 220 pounds lighter than its predecessor, according to company press materials. The car has a newly designed 4-link front axle, and drivers can opt for a steel suspension or an air suspension on the front and rear axles. Its safety features include a sensor for the front passenger airbag that can detect a child seat and automatically deactivate the airbag to prevent injuries to children. The C-Class center console has a free-standing central display and a heads up display that can project information such as speed, speed limits and navigation instructions as a virtual image in the driver s range of vision. It s [C-Class] one in a series of many different products that the company is releasing, says Hoff, starting back in the last couple of years with our compact cars that we released that you don t really see in the United States but are a key part of the overall Mercedes-Benz strategy. We just launched our new S-Class and facelifted the E-Class [sedans] and the C-Class will come out [2014] in the United States. After that, there will be other products and new models coming out. In December, engineering trials for the C-Class were under way to validate all of the equipment that will be used to make the sedan, says Shedrick Kynard, senior manager for Mercedes-Benz s Assembly One plant and a 17-year veteran of Production of the 2015 Mercedes-Benz C-Class sedan will begin this year at the Alabama plant, joining the current lineup of M-Class, R-Class and GL-Class SUVs. 56 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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18 the company. Production trials, he says, would begin soon to ensure that the car is assembled to specifications. You want to validate the process capability itself and that process includes your people, your methods, your documentation and your standards to be able to build a vehicle every time, Kynard says, the exact same way. To learn the precise way to build the C-Class, some team members have traveled overseas for training at Mercedes-Benz s assembly plant in Bremen, Germany, he says. We ve had team members on this project anywhere from two to three years, Kynard says, and we ve had team members who have been traveling back and forth to Germany. These team members will be multipliers to help train the new team members that we ll be receiving into the facility. Tanya Cabiness, the assembly shop manager who has worked for Mercedes 16 years, says the new hires coming to build the C-Class will spend a full week at the training center getting familiar with the assembly line, learning everything from how to change out bits and sockets to assembly plant standards and procedures. They will go through a lot of intensive training prior to them even setting foot onto the shop floor, Cabiness says. To get qualified recruits with the technical skills needed to build Mercedes products, Mercedes has developed partnerships with Shelton State Community College and the University of Alabama to offer a Mechatronics training program and with AIDT, which also offers automotive instruction. We ve always been very fortunate, and it s a credit to the state of Alabama that they continue to develop their workforce to the point where they can give us the right people and not only the right people, says Hoff, but also the right suppliers. It was one of the main reasons why we came here back in the early 1990s. Twenty years later, we re still very happy with our ability to find the right qualified workers for the work that we have to do here. Gail Allyn Short is a freelance writer for Business Alabama. She lives in Birmingham. 58 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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20 AUTOMOTIVE MANUFACTURING ENGINE PLANT CLIMBS TOYOTA MOUNTAIN Beginning in 2003 with 350 people, Toyota s Huntsville plant at $850 million total investment and 1,150-employees is now poised to become the largest Toyota engine plant in the world. BY THOMAS M. LITTLE Toyota Motor Manufacturing Alabama in Huntsville is on course to become the largest Toyota engine plant in the world, aiming to produce 744,000 engines annually. The only Toyota plant building 4-, 6- and 8-cylinder engines under one roof, Toyota supplies engines for eight American-built Toyota models. It is increasing production for V6 engines for the Highlander and hopes to reach a 216,000 unit-per-year increase in V6 production. To accommodate the increased production, Toyota is expanding the plant with the addition of a new, 300,000-squarefoot building, increasing the facility to nearly 2 million square feet. The automaker broke ground on the new building last September. Our latest expansion has four assembly lines, says TMMAL President Jim Gov. Robert Bentley was on hand in 2011 to help Toyota Motor Manufacturing Alabama officials unveil their new line of fourcylinder engines. 60 BusinessAlabama.com February 2014

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22 AUTOMOTIVE MANUFACTURING Toyota s Huntsville operation the only Toyota plant making four-, six- and eightcylinder engines under one roof has a goal of producing 744,000 engines a year. Bolte. The Highlander sells incredibly well, so we re happy to help make more available. The plant also is installing new equipment for machining V6 engines, which should be complete by summer These improvements represent a $250 million investment, making the total investment in the plant over $850 million. Toyota s workforce also has expanded to meet high production demands. To prepare for the increased workload, the plant worked closely with AIDT, the state s workforce development agency. With AIDT, we ve built a strong and diverse workforce, says General Manager of Administration Emily Lauder. We have 18 counties represented from Alabama and Tennessee, and employees coming in from around the globe. The continued growth has led to the addition of 125 new jobs, bringing the plant s total employment to about 1,150. We had over a thousand applicants for the initial expansions, says Lauder. AIDT helped us find the best candidates through preliminary training. Through a variable workforce program, temporary workers involved in previous expansions were made full-time employees. Trainees go through a day of work simulator in which they familiarize themselves with the basic tasks involved. They receive hands-on experience with trial engines to learn the assembly process and hone safety and efficiency. Bolte attributes the plant s steady progress in part to the company s adherence to a set of principles called the Toyota Way. It comes down to respecting the human, he says. We work diligently on two-way communication among all levels of staff. The Toyota Way draws heavily from the concept of Kaizen. The Japanese word, literally meaning improvement, has come to represent a philosophy of continual progress and change for the better. It s important to work together toward common goals, Bolte continues. That s why Toyota looks for team members who are flexible. We look for problem solvers. Since starting its production lines in 2003, Toyota has enjoyed a close relationship with both its neighbors and the surrounding state. We ve been very successful in Alabama, and we love working in Huntsville, says Bolte. At every government level, we ve been embraced as a corporate citizen. As the automotive industry has continued to expand in Alabama, state leaders have been keen to show their support for state-invested businesses. Last November, Gov. Robert Bentley and a group of state development officials visited Japan to meet with industry leaders, including Toyota Chairman Takeshi Uchiyamada. Bolte, who joined the Alabama representatives abroad, believes that the meeting was a successful step in strengthening the state s ties to the foreign-based businesses. The partnership between Alabama and Toyota has been great, he says. We re doing business on a global scale, and it s important to keep relationships strong. Toyota Alabama also prides itself on being one of the most environmentally 62 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

23 conscious plants in the U.S. The recent expansions have allowed it to incorporate new environmentally friendly construction, energy-efficient lighting and the reduction of emissions. Every time we grow, we want to improve on what we ve already done, says Bolte. Toyota s efforts earned numerous recognitions in 2013, including an Air Pollution Control Achievement Award from the City of Huntsville. Bolte also anticipates the arrival of alternative fuel cars in the coming years. Toyota leads the market in hybrid production, he says. These cars are on the rise, and you will start to see more hybrid plugins in the future. In an effort to provide alternative fuel sources, Toyota is currently researching hydrogen fuel cells. Concept cars were debuted at the Tokyo Motor Show last November, and the finished product is planned to launch around The recent investment indicates overwhelming confidence in Toyota s viability for years to come. At the end of 2013, sales for the company s various models were climbing. Demand for Toyota products is high across the board. Many plants across the U.S. have been running at 100 percent capacity, says Lauder. Everyone is running overtime to meet demand. Engines in high demand include powerful V8s for the Tundra and Sequoia, and V6s for the Tundra and Tacoma. Customer preference depends on who and where you are, says Bolte. Working trucks need something strong like a V8. A family may need something different. In Europe, small diesels are popular. Since production began here 10 years ago, Toyota has received five major investments to spur productivity and growth. This latest investment is a testament to the relationship between Toyota and Alabama, and the plant is looking forward for yet one more milestone this February. We re just about to produce our 3 millionth engine, says Lauder. In 2003, we started with one V8 engine and 350 people. We ve been steadily improving ever since and are ready to continue the trend in Thomas Little is a freelance contributor to Business Alabama. He lives in Birmingham. SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 63

24 AUTOMOTIVE MANUFACTURING THE GREATER AUTO SECTOR The Alabama-based plants that supply Alabama s big five assembly and engine manufacturers number in the hundreds, with thousands upon thousands of employees. BY NEDRA BLOOM They make car seats, car doors, braking systems, headlights, gaskets and more. If it s a component of a modern automobile, odds are somebody s making it in Alabama. They may not carry the glitz and glamour of the big five Mercedes-Benz, Hyundai, Honda, Toyota and Navistar but they represent an enormous industrial sector in the Alabama economy. They are the Tier One and Tier Two suppliers, spread across the state from major cities to towns as small as Luverne, Elba, Cusseta and Haleyville. Some have been in the state almost since the announcement that Mercedes was on its way; some for just a few months. In total, they are a force to be reckoned with. The Big Five may be the mother bee of Alabama s automotive sector, as described by David Bronner, of the Retirement Systems of Alabama. But the suppliers are the worker bees that support the effort. Gov. Robert Bentley tours the axle line at the Tuscaloosa plant of Mercedes supplier ZF Lemforder Corp. 64 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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26 Recently completed: a $14.6 million expansion at ZF Lemforder Corp. in Tuscaloosa. Announced in 2012, then Plant Manager Ron Davis (fourth from left) helped staff members and guests hold the ribbon while Gov. Robert Bentley made the cut. Together, some 80 key firms employ in the neighborhood of 20,000 workers, according to Alabama Department of Commerce figures. Faurecia, among the state s largest suppliers by number of employees, is a great example. The French firm opened in Tuscaloosa in 2010, then added a second The world s No. 6, 7, 8 and 9 supplier firms all have a presence in Alabama. plant there and an additional plant in Cottondale. Along with others in the state, Faurecia supplies seat assemblies to Mercedes and auto plants in neighboring states. Like many other suppliers, the Alabama operation is part of a global company. Automotive News ranks Faurecia as 7th in the world in 2012, with $22.5 billion in sales in 2012 and 94,000 employees in 34 countries. Other big players include: Johnson Controls, in Cottondale. Among the nation s largest automotive suppliers, Johnson Controls also is among Alabama s oldest supplier firms, opening its plant in Like Faurecia, Johnson Controls makes seats for Mercedes. Automotive News ranks it 6th on the international list. Mobis America, in Montgomery. Opened in 2005, Mobis makes cockpit and chassis systems for Hyundai s neighboring plant in Montgomery and for the sister Kia plant in West Point, Ga. Automotive News ranks it 8th among international supplier firms. Nemak USA Inc., in Sylacauga. Nemak has two facilities in Sylacauga, which it describes as using different production technologies: Lost Foam and High Pressure Die Casting. The Alabama plants employ nearly 700 workers of a worldwide 20,000-employee team. Smart Alabama LLC, in Luverne. A principal supplier for body parts for Hyundai, the 700 workers in Luverne make parts for Hyundai s Sonata sedan and Santa Fe SUV models. Smart Alabama is the largest employer in Crenshaw County. TS Tech Alabama LLC, in Boaz. Another automotive seat maker, TS Tech Alabama s principal customer is Honda, with its plant just an hour away in Lincoln. The influx of suppliers began almost immediately after the Mercedes announcement, when Alto came to town. Alto Products opened in 1993 in Atmore. A 50-year-old manufacturer of friction clutches and related equipment, Alto moved its headquarters to Atmore in Rehau Automotive LLC opened in 1994 in Cullman. A worldwide cor- 66 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

27 poration, Rehau s Alabama operations specialize in automotive parts, plastic injection molding, painting and assembly. In November, Rehau announced plans for a new technical center its first in North America adjacent to its existing Cullman plant. The new center, estimated to cost $2 million to $3 million, will house about 45 engineers, who will work on injection molding, paint, fabrication and supply chain issues, as well as offering space for technical training. It followed close on the heels of news of a plant expansion to facilitate a new bumper system for Mercedes. Rehau has opened its first U.S. research & development center in Cullman. ZF Lemforder Corp., which opened in 1994 in Tuscaloosa, is a key supplier for Mercedes, making automotive front and rear axle systems. Like Mercedes, the company is based in Germany. And like Mercedes, it recently has completed a significant expansion. Kamtek Inc., which opened in 1995 in Birmingham, operates an auto body metal stamping plant. Like many other Mercedes suppliers, it has expanded recently. Each new automaker has brought its own rush of suppliers, which come to be close to their customers. Says Ashley Frye, vice president of production at the Hyundai plant in Montgomery, about half of the company s 70 major suppliers are headquartered in Alabama. Hwashin America is typical. The company produces chassis and body components, primarily serving Hyundai and its other suppliers. The company has expanded twice since opening in 2004 in Greenville. Mando America Corp. Alabama, a Korean-based provider of brake, steering and suspension systems, completed construction of its Opelika plant in Yachiyo opened its Alabama plant almost in concert with Honda s plant in SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 67

28 AUTOMOTIVE MANUFACTURING ZF Lemforder Corp. Plant Manager Ron Davis announces, in 2012, the $14.6 million expansion that was recently completed. ZF set up in Alabama in Lincoln in Located in Steele, the plant has expanded several times, including a 2012 expansion to support the new Acura MDX at Honda. And the influx continues today. Among the newest industries in Alabama s Interstate 22 corridor is Fayette Fabrication. The plant, first in its tri-county regional business incubator, will make steel racking systems for use on the production floor of manufacturing plants. Suppliers also use these assemblies to transport products to their customers. Fayette Fabrication opened in December, Over in Lee County, Donghee America Inc. joined the strong supplier force in 2013 when it announced a $48 million Lee and Fayette counties each got a new auto supplier firm in investment for a plant to make automotive fuel tanks. The plant, in the Auburn Technology Park West, joins German supplier RAPA, Seung Chang Airtech and Mando as new and expanding players in the Auburn-Opelika area. RAPA, a nickname for German-based Rausch and Pausch LP, was the 2012 headline maker there with the announcement of an $18 million plant and headquarters. A maker of precision auto parts, including solenoid valves and control blocks, RAPA supplies Chrysler and German transmission manufacturer ZF. We are now an Auburn company, Chairman of the Board Horst Pausch Sr. said of the Auburn location. Over time, we want to build a company in Auburn that is independent from Germany, with its own research and development capabilities and its own set of North America-based customers. Nedra Bloom is a copy editor for Business Alabama 68 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

29 BY THE NUMBERS 9 passenger vehicle models are built by Alabama manufacturers. In 2013, Honda began production on the 2014 Acura MDX. The Mercedes C-Class is scheduled for production in 2014 and a new Mercedes SUV is announced for Alabama ranks 4th in the U.S. for vehicle exports. In 2012, export dollars for vehicles and vehicle parts totaled nearly $6.6 billion. (Alabama Department of Commerce International Trade Division, 2013; 2012 data) ALABAMA AUTO PRODUCTION YEAR TOTAL PRODUCTION , , , , , , , , , ,000 Toyota, Navistar, Honda and Hyundai currently have a combined capacity for producing more than 1.6 million car and truck engines annually in Alabama and expansions to increase capacity are under way. SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 69

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31 AUTOMOTIVE MANUFACTURING TRIPLE SHIFT INTO RECORD PRODUCTION The three-shift production schedule at Hyundai s Alabama plant is winning the race to meet expanding demand beating output records year after year. BY GAIL ALLYN SHORT // PHOTOS BY DAVID BUNDY It is 3 p.m. at Hyundai Motor Manufacturing Alabama (HMMA) in Montgomery and Ashley Frye, vice president of the production division, has just returned to his office. Much of the day, he says, was spent in meetings and pounding concrete throughout the facility to monitor the assembly of two of the car company s best-selling sedans, the 2014 Elantra and the Sonata. In 2012, Hyundai Alabama produced a company record of more than 361,300 vehicles. At year end, Frye says, they were on target to beat that number. We ll end up this year right at 400,000 units, says Frye, who oversees not only general assembly but also logistics, two onsite engine shops, a paint shop and maintenance. We went to a three-shift production schedule in the fall of last year, and adding that additional number of work hours to the day allowed us to elevate our production targets. Above, left: Cassandra Collins assembles a door on the line at Hyundai s Montgomery plant. Above, right: Cedric Moon assembles a Sonata at the Hyundai Motor Manufacturing Alabama plant. SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 71

32 AUTOMOTIVE MANUFACTURING Sales of Hyundai vehicles, like the Sonata and Elantra, are managed by Hyundai Motor America, a subsidiary of the South Korean manufacturer Hyundai Motor Co. The cars are sold at more than 800 dealerships across the United States. On Dec. 3, Hyundai Motor America, headquartered in Costa Mesa, Calif., said sales for November 2013 were at 56,005 units, up 5 percent over the same period in In particular, the company sold 16,751 Elantra sedans, surpassing the sales numbers of November 2012, at 15,923. Sales of the mid-size Sonata for November 2013 were at 16,595, down slightly from the same time in 2012, at 17,660. We continue to see strong demand across our lineup, with consumer interest especially high for the 2014 model year updates we made to Sonata, Santa Fe and Tucson, said then-hyundai Motor America President and CEO John Krafcik. While we finished November still short of 2014 model year inventory, our plants are literally working 24/7 to restock our dealers with these new models, including the refreshed 2014 Elantra and updated Veloster, which both arrive in showrooms this month. Krafcik has been succeeded by David Zuchowski, former vice president of sales. Back at the Montgomery plant, every step in Hyundai s assembly process is audited on an ongoing basis for every shift, says Frye, to ensure that workers are able to perform their duties to Hyundai s specifications. The goal, he says, is to get things right the first time, namely to run vehicles entirely through the assembly line without having to sideline them with a repair or finessing a fit. Our target is to have shipping out of this plant the highest quality vehicle sold here in North America, he says, and so, with the uptime and the high quality, that allows units to go continuously through our system, straight out the door to deliver to our customer. The efficiency of the plant and product quality, he says, is helped by a network of more than 70 suppliers from across the country. About half of the suppliers are headquartered throughout Alabama. All of our suppliers and their ability to deliver their parts to us on an on-time basis, along with our logistics organization here, is such to where we are a very lean organization, Frye says. We don t keep much in the way of inventory on our site. We depend on our suppliers to bring in material in a just-in-time basis. Everything fits together just like clockwork. The standard 2014 Sonata mid-size sedan has a suggested retail price of about $21,350. The Sonata has a 2.4-liter Gasoline Direct Injection (GDI) engine that can deliver up to 190 horsepower and get up to 35 mpg on the highway. The car also comes with 16-inch alloy wheels. Driver options include such features as Blind Spot Detection and Driver Selectable Steering Mode, which lets drivers choose between normal, comfort or sport setting for their steering. The standard 2014 Elantra has a suggested retail price of about $17,200. The car can generate 145 horsepower and achieve up to 38 mpg on the highway. The Elantra comes with alloy wheels, and drivers can chose options like Sirius XM satellite radio and heated exterior mirrors. Among the Elantra s safety features 72 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

33 are six airbags and a Vehicle Stability Management System. The 2014 Elantra recently got a Five-Star Overall Safety Rating from the National Highway Traffic Safety Administration and was named as the Insurance Institute for Highway Safety s Top Safety Pick for Both the Elantra and the Sonata are produced at the Montgomery assembly plant that sits on 1,744 acres and employs more than 3,000 workers. Hyundai broke ground for the 3.2 million-square-foot facility in 2002 the Korean company s first automobile assembly plant in the United States. Frye joined HMMA in 2003 as a member of the plant s early leadership team. The facility opened in 2005 and workers began production of the 2006 Sonata. Production of the Elantra compact sedan began about four years later in November HMMA also produced the Santa Fe SUV from 2006 until Speculation over the growth of Hyundai in the state was fueled last August when an article in Business Korea reported that Alabama was in competition with Georgia for another Hyundai plant and that Gov. Robert Bentley was planning a trip to Korea in October to meet with Hyundai officials. Bentley s office later said the October trip was only for cultural exchange purposes and not industrial development. In the meantime, production at the Hyundai plant in Montgomery continues. Frye, who one could describe as part manager, part coach, part cheerleader, says he often talks to his staffers about values such as teamwork, striving for excellence and setting goals for the coming year. Across the face of the paint plant here, he says, we have a sign and it says, Be the World s Best Plant, and that s a message that I want to project out to the team members, Frye says. We put out that message, that not only can we do it, but we will do it. There is a big difference in those words. We will be successful. As we re wrapping up production at the end of this year, he says, we ve got to keep the focus through the remaining few days of the year. Everything that we have accomplished thus far in the way of success is serving as a foundation for what we re going to do as we enter All Business. All Alabama. Gail Allyn Short is a freelance writer for Business Alabama. She lives in Birmingham. SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 73

34 AUTOMOTIVE MANUFACTURING AUTOMOTIVE MANUFACTURERS Ranked by Number of Employees. Source: Alabama Department of Commerce database. DND = Did Not Disclose. RANK ADDRESS Honda Manufacturing of Alabama LLC Hyundai Motor Manufacturing Alabama LLC Mercedes Benz US International Inc. Toyota Motor Manufacturing Alabama 5 Johnson Controls Inc. 6 Mobis America Inc. (HC) 7 Nemak USA Inc. 8 Smart Alabama LLC 9 TS Tech Alabama LLC 10 Federal-Mogul Sealing Systems 11 Hwashin America Corp. 12 Mando America Corp. Alabama 13 REHAU Automotive LLC 14 Briggs & Stratton Corp. 15 Johnson Controls 16 NABI Bus LLC 17 SL Alabama LLC 18 AJIN USA (Joon LLC) 19 BASF Catalyst 20 Bostrom Seating Inc. 21 Fontaine Trailer Co Heil Environmental Industries Navistar Diesel of Alabama LLC Phoenix Industries Huntsville Alabama Cullman Yutaka Technologies (ACYT) 26 Alto Products 27 Hanil USA EXECUTIVE/ TITLE ADDRESS PHONE/FAX WEBSITE PRODUCTS Tom Shoupe President & CEO Young Deuk Lim President & CEO Jason Hoff President & CEO Jim Bolte President Andreas Jagl VP General Mgr. Soon Hwa Kim President & CEO T. Gerald Burgess HR Manager Homan Hong Vice President George Nichols Sr. Mgr. Admin. Robbie Day Plant Manager David Nam President & CEO Tae Young Kwak President Lars Krook Plant Manager Russ Stone Plant Manager Dean Lenane CEO Herb Clark Director HR Sun Kyun Seok Project Coordinator & Sales Mgr. Jae Ik (Jake) Jang Managing Director Mark Todd Site Manager Robert Jackson President/CEO Mark Keller President Anthony Henson Plant Manager Lance Fulks Plant Manager H. Bryan Dodson President Masa Suzuki President David Landa President James Cho Plant Manager 1800 Honda Dr. Lincoln, AL Hyundai Blvd. Montgomery, AL Mercedes Dr. Vance, AL Cottonvalley Dr. Huntsville, AL Progress Dr. Cottondale, AL Mitchell Young Rd. Montgomery, AL Old Sylacauga Hwy. Sylacauga, AL Shin Young Dr. Luverne, AL N. Main St. Boaz, AL Freeman Ave. Athens, AL Montgomery Hwy. Greenville, AL N. Park Dr. Opelika, AL Industrial Dr. SW Cullman, AL Technology Pkwy. Auburn, AL th St. S. Clanton, AL National Dr. Anniston, AL Airport Blvd. Alexander City, AL N Lanier Ave. Lanett, AL Kellner Rd. Huntsville, AL Nances Creek Industrial Blvd. Piedmont, AL Industrial Dr. Jasper, AL Gault Ave. N. Fort Payne, AL James Record Rd. Huntsville, AL Johnson Rd. SW Huntsville, AL Alabama Hwy. 157 Cullman, AL Alto Way Atmore, AL Hanil Dr. Tallassee, AL DND DND DND DND DND hondaalabama.com hmmausa.com mbusi.com toyota.com/tmmal Odyssey Mini Vans, Pilot SUVs, Ridgeline Pickups, V6 Engines & Acura MDX Luxury SUVs (2013); V-6 Engines Sonata & Elantra Sedans, 4-cylinder 2.0L Turbo & 2.4L Theta Gasoline Direct Injection & Multi Port Injection Engines, 1.8 Liter Nu Engine Third Generation M-Class SUV, GL-Class SUV, R-Class Crossover, C-Class Sedans (2014), New Coupe-style Design (2015) V6 & V8 Engines, 4 Cylinder Engines EMPLOYEES Over jci.com Auto Seat Assembly & Interior Products mobis.co.kr Motor Vehicle Chassis, Plastic Injection Molding, Distribution nemak.com Engine Blocks smart-alabama.com Stamping Plant, Inner Panel Sheet Metal (Tailgates, Hoods & Sunroofs) tstech.co.jp/english Automobile Seats federal-mogul.com Automotive Gaskets & Seals hwashin.co.kr/eng Chassis & Drive Train Automotive Body Parts mando.com/mando/ eng rehau.com briggsandstratton. com Braking, Steering & Suspension Systems Automotive Parts Plastic Injection Molding, Painting & Assembly HP Gasoline Engines crh-group.com Automobile Seat Adjuster Systems NABusInd.com Transit Buses samlip.co.kr Auto Lighting Parts & Systems DND Automotive Metal Stamping & Robotic Welding catalysts.basf.com Catalytic Converter Systems bostromseating.com Driver Seating for Heavy/Medium Duty Trucks fontainetrailer.com Flatbed Tractor Trailers heil.com Garbage Truck Bodies internationaldelivers.com Diesel Engine Manufacturing, Assembly for Trucks & Buses hsvrehab.org Canvas Products yutakatech.com Metal Stampings, Automotive Exhaust Systems & Catalytic Converters, Torque Converters altousa.com Auto Transmission Clutch Plates haniltube.com Plastic & Steel Tube Component Assembly for Vehicle Fuel Systems BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

35 RANK 28 ADDRESS KTH Leesburg Products LLC 29 S J A Inc 30 Topre America Corp. 31 Webb Wheel Products Inc. 32 Z F Lemforder Corp. 33 Borbet Alabama Inc. 34 Dongwon Autopart Technology AL 35 Electrifil Corp. 36 Hanwha L&C Alabama LLC 37 Inteva Products LLC 38 Kamtek Inc. 39 Lear Montgomery EXECUTIVE/ TITLE ADDRESS PHONE/FAX WEBSITE PRODUCTS Dan Thornton Vice President & Plant Manager Seung Hwa Ahn President Hiroshi Chiba President Jason Gerding President Ron Davis Plant Manager Jim Ferguson President & CEO Charlie Kim President Pascal Auburtin Vice President/ General Manager Martin Kim CEO Joyce Luker Plant Manager Mike Hartman Plant Manager Duk Kim Plant Manager 405 Industrial Blvd. Leesburg, AL Thweatt Industrial Blvd. Dadeville, AL County Rd 222 Cullman, AL Industrial Dr. S.W. Cullman, AL Commerce Dr. Tuscaloosa, AL W. Veterans Blvd. Auburn, AL Montgomery Hwy. 331 N. Luverne, AL Carter Circle Elkmont, AL N. Park Dr. Opelika, AL Ed Stephens Rd. Cottondale, AL Sterilite Dr. Birmingham, AL Folmar Pkwy. Montgomery, AL kth.net Metal Frame Components DND Plastic Injection Molded Automotive Parts topreamerica.com Automotive Metal Stamping webbwheel.com Hubs & Drums (Heavy Truck/Trailer) zf-group.com Automotive Axle Systems borbet.de/en Automotive Aluminum Wheels dwmic.com electricfil.com hanwhacomposites.com Door Frames, Side Impact Beams, Roof Molding, Console Brackets Ignition Systems & Transmission & Climate Control Sensors Bumper Back Beams & Bumper's Impact Resistance Core EMPLOYEES intevaproducts.com Motor Vehicle Parts Manufacturing ogihara-al.com Auto Body Metal Stamping DND Motor Vehicle Seating & Interior Trim Manufacturing SPECIAL SUPPLEMENT February 2014 BusinessAlabama.com 75

36 AUTOMOTIVE MANUFACTURING RANK ADDRESS 40 Matsu Alabama Inc. 41 North American Lighting Inc. 42 Bridgewater Interiors LLC 43 Daehan Solutions Alabama LLC 44 Flex-N-Gate Alabama LLC 45 Grede Holdings LLC 46 Hanil E-Hwa Interior Systems 47 Harley-Davidson Inc. 48 Yachiyo Manufacturing of Alabama LLC 49 Federal-Mogul Corp Fleetwood Metal Industries Inc. F S Fehrer Automotive GmbH 52 Imperial Group LLC EXECUTIVE/ TITLE ADDRESS PHONE/FAX WEBSITE PRODUCTS Robert Todd General Manager Dan Johnson Manager Ronald Hall President & CEO Kevin Kim CEO Tom Lynett General Manager Jim LeCroy General Manager Kyung Ho Woo President Michael Nixdorf Talladega Test Facility Manager Toshihiko Osawa President Rick Owens Plant Manager Paul Clarke Plant Manager David Rodriquez Plant Manager Scott Geier Central Region Mgr Kellner Rd. Huntsville, AL Counts Dr. Muscle Shoals, AL Bridgewater Dr. Eastaboga, AL County Rd. 26 Hope Hull, AL Bay Dr. McCalla, AL Industrial Park Rd. Columbiana, AL Craig Industrial Dr. Selma, AL Division St. Lincoln, AL Duncan Farm Rd. Steele, AL Wagner Dr. Boaz, AL Gene Stewart Court Sylacauga, AL W. Brooke Dr. Gadsden, AL National Dr. Anniston, AL DND DND DND DND matcor-matsu.com Auto Metal Stampings & Welded Components nal.com Automobile Signal Lamps bridgewater-interiors.com EMPLOYEES Automotive Seat Systems dhsol-usa.com Interior Sound Insulation Components flex-n-gate.com Full Assembly, Injection Molding grede.com Medium- & High-volume Gray & Ductile Iron Lost Foam Castings hanileh.com/eng Automotive Interior Trim DND Motorcycle Research & Development yachiyo-ind.co.jp Welded & Sub-assembled Automotive Parts federalmogul.com Auto Chassis fleetwoodmetal.com Automotive Metal Stamping fehrer.com Automotive Seat Pads NABusInd.com Transit Bus Components BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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38 AUTOMOTIVE MANUFACTURING AAMA BOARD OF DIRECTORS & OFFICERS Ron Davis, President Karl Affleck, Vice President Lew Drummond, Exec. Dir. Steve Sewell, Treasurer Karl Affleck Vice President Senior Manager of Logistics Supply Chain Management & Inventory Control Mercedes-Benz U.S. International Tuscaloosa Dr. Bharat Balasubramanian Executive Director of the Center for Advanced Vehicle Technologies and Professor of Engineering University of Alabama College of Engineering Tuscaloosa Mark Brazeal General Manager of Production Toyota Motor Manufacturing Alabama Huntsville Billy Canary President and CEO Business Council of Alabama Montgomery Frank Chestnut Assistant Manager Continuous Improvement AIDT Montgomery Gene Cleveland Sr. Manager - Administration KTH Leesburg Products LLC Leesburg Ron Davis President Executive Director of the Alabama Entrepreneurship Institute University of Alabama Tuscaloosa Lew Drummond Executive Director Shelton State Community College Tuscaloosa Lance Fulks Secretary Plant Manager Navistar Huntsville Alan Hill Executive Director Alabama Productivity Center The University of Alabama Tuscaloosa David Holder Director of Southern Operations Sanoh America Inc. Scottsboro Joyce Luker Plant Manager Inteva Products Cottondale Dave Mark Senior Manager, Head of Department Parts Purchasing Hyundai Motor Manufacturing Alabama Montgomery Richard Payne Plant Manager Faurecia Tuscaloosa Steve Sewell Treasurer Executive Vice President Economic Development Partnership of Alabama Birmingham Lyle Shroyer Division Manager of Corporate Planning Honda Manufacturing Alabama Lincoln Linda Swann Assistant Secretary of Commerce Alabama Department of Commerce Montgomery W. Lee Thuston Managing Partner Burr and Forman LLP Birmingham Jason Weaver President Stamped Product Inc. Gadsden Chester Vrocher Acting Executive Director Alabama Technology Network Birmingham 78 BusinessAlabama.com February 2014 SPECIAL SUPPLEMENT

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