January 23, 2012

Carmakers' U-Turn Steers Job Gains
Big auto makers and their suppliers are spending billions to expand and retool U.S. factories, pushing heartland states to jockey to land new auto jobs. Executives say the industry's U-turn from bankruptcy filings and layoffs to hirings and capital spending is driven by rising demand and a new view of manufacturing in the U.S. as a way to guard against volatile currency markets and other risks. According to The Wall Street Journal, auto industry employment in the U.S. is predicted to jump to 756,800 in 2015 from 566,400 in 2010. While that falls well short of the 1.1 million workers employed in the sector in 1999, it indicates the hemorrhaging has been stanched. The resurgence is being felt across the country. Honda Motor Co. plans to expand capacity at plants in Ohio, as well as in Alabama, and BMW AG this month said it would spend $900 million to add a new model at its big plant in Greer, S.C., and add 300 jobs. "BMW locating here 20 years ago changed the look of the state," said Amy Love, marketing and communications director with the state Department of Commerce. Click here for more on how the auto industry is contributing to nationwide employment prospects.

Ohio Grabs Acura from Japan as Yen Fuels Exodus to U.S.
Honda Motor Co.’s choice to build what it calls a racing-oriented “supercar” in Ohio highlights confidence in its U.S. engineers and plants. It also shows the difficulty of producing autos in Japan as the yen rises. According to Bloomberg, when the high-performance hybrid Acura NSX goes on sale within three years, it will be the most expensive and technologically advanced car ever built in the U.S. by an Asian or European automaker. Ohio will be the sole global production site for the car executives suggest will sell for more than $100,000. Honda’s production shift along with rising North American capacity for Toyota Motor Corp. and Nissan Motor Co., signal a long-term move by Japan’s automakers to battle currency-related losses. Carlos Ghosn, chief executive officer of Nissan and its alliance partner Renault SA, has warned that unless Japan finds a way to tame the yen’s rise, the country’s auto industry faces a “hollowing out” of domestic production. Nissan has moved fastest among Japan’s automakers to shift production of low-cost autos to Thailand and Mexico, and last year was the second-biggest importer of vehicles into Japan, behind only Volkswagen AG. Click here to read more about Japanese automakers moving production out of country.

Central Distribution for BMW
BMW plans a new distribution system for the 5-series sedan that will keep some of the vehicles allocated to dealerships in one of three locations around the country. The company says that will allow stores to save on floorplanning and the cost of transporting swapped vehicles. According to Automotive News, BMW of North America would pay the storage costs until the dealer has a buyer for a vehicle. The program is based on a six-month pilot program BMW ran last year with five dealers in the San Diego region for the outgoing 3-series sedan. The test gave BMW confidence to take that program national in the second half of this year, said Peter Miles, senior vice president of operations. "We will use central stocking rather than ship all the cars," said Miles. "The benefit is lower floorplan, better grosses, and higher throughput and customer orientation." The distribution system would give dealers pools of cars in three locations, said Miles. Rather than ship each dealership's total monthly allocation to the store, some of the cars will be kept at BMW processing facilities on both coasts and in the South. For the rest of Automotive News’ report on BMW’s new distribution system, click here.

Industry Tinkering in Pursuit of Better Mileage
Under the shapely sheet metal and ultra glossy finishes of the vehicles introduced at the Detroit Auto Show were technical details just as captivating as the visual attractions. The Detroit News reports that the advances ranged from minor interior convenience features to entirely new approaches in structural design. Given tightening fuel-economy standards and shifting buyer preferences, it was no surprise that automakers brought more electrics and hybrids to the show, and this year there seems to be a growing recognition that plug-in hybrids are a logical transition to wider acceptance of battery-powered vehicles. Still, the move is gradual, and the industry displayed a philosophy that might be best described as less of this and more of that: less displacement in conventional engines and more power per liter; more miles per gallon and less power-robbing friction; less weight and more transmission ratios to keep engines running in their sweet spot. For example, Hyundai says that the use of direct fuel injection, variable valve timing, and variable intake tuning in the Genesis Coupe's 3.8-liter V-6 produce net gains of 42 horsepower and 29 pound-feet of torque. Peak horsepower is now 348; torque tops out at 295 pound-feet. Click here for a look at some other emerging engineering trends at the show.

The Safest Cars for 2012
According to a recent Consumer Reports survey, 65 percent of respondents said safety was their top priority among all car buying considerations, trumping such stalwarts as quality, value, and performance. And women, who wield considerable influence in making family purchases, coveted safety even further with 74 percent of female respondents rating it as their top buying concern. To help safety-minded car shoppers make choices that could save lives down the road, Forbes has compiled its annual list of what of the safest rides on the road among model-year 2012 vehicles. The publication began its research with the recently released list of “Top Safety Picks” from the Insurance Institute for Highway Safety (IIHS), a non-profit organization funded by the insurance industry. For 2012 a total of 69 cars, 38 SUVs, and three pickups made the cut, which includes 18 new recipients. “For the second year running a record number of models qualify as Top Safety Picks,” says IIHS president Adrian Lund. “It’s tough to win, and we commend auto manufacturers for making safety a top priority.” Click here for photos of the vehicles that made the cut as this year’s safest. For Forbes’ full report, click here.

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