SUMMER 2019
Executive Q&A:
MARK BRAZEAL Opens Up About Mazda Toyota’s Joint Venture
ROBOTS!
INDUSTRY OUTLOOK:
ZF CHASSIS:
How Motlow State is embracing the future of workforce development
Sliding car sales and tariffs raise challenges for the industry
A dream job and the internship of a lifetime
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2019 volume 4 number 3
32 Faces of the Industry 39 Brad Newman
Rather than just taking jobs from humans, this robot in Middle Tennessee maybe enhancing the employment picture in McMinnville
talks about how he sees divine intervention in his dream job
Supplier Profiles 41 ZF Chassis is making a difference with a life changing intern program
Departments 10 From the Editor 12 Benchmarks/NewsHub 56 Regional Reports 62 Industry Indicators/ Stocks 63 By the Numbers 64 Kudos 66 Career Notes 67 Index 68 Vintage
Features 20 EXECUTIVE Q&A The Mazda Toyota plant brought an exciting addition to the southern industry. Mark Brazeal gives the lowdown on its progress 24 INDUSTRY OUTLOOK: As new car sales
32 WORKFORCE DEVELOPMENT:
At Motlow State Community College in Tennessee the robot revolution may mean new opportunity for students and automotive
35 SAFETY: OSHA is serious about making supplier plants safer, and automotive associations are rising to the challenge of educating members
take a tumble, experts talk about why, and what it means in the near term
44 SPOTLIGHT: Fun with cars is the reason overlanding is taking off in the wilds of the American south
28 INDUSTRY OUTLOOK: The joint trade agreement between Mexico, Canada and the United States was expected to bring relief to an industry stung by trade woes. Where is it now?
50 SAFETY: Teenagers behind the wheel can be a
parent’s worst nightmare, but an innovative program means to put the B.R.A.K.E.S. to that worry
ON THE COVER: They’re down to work at Huntsville, Alabama’s groundbreaking Mazda Toyota Manufacturing joint venture plant, with production on track for 2021, says company vice president Mark Brazeal. 8 | Southern Automotive Alliance | SUMMER 2019
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From the Editor
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ov. Ron DeSantis in June signed into law a progressive autonomous vehicle bill to allow selfdriving vehicles—without a human inside—to operate on Florida roads. Previously, a person had to be inside such a vehicle to serve as emergency backup. It took effect July 1.
Volkswagen recently shelved its relationship with Aurora Innovation Inc., a Silicon Valley self-driving start-up backed by Amazon.com Inc., to make room for a potential agreement with Ford and Argo AI, Ford’s self-driving unit. If my colleague Dave Helms will forgive me for repurposing two of his carefully crafted NewsHub items from this issue, he’s helping me make a point. Every issue of Southern Automotive Alliance we seem to address the question of selfdriving, or autonomous cars. And it’s not just us. Pay even a little attention to automotive stories in the news and you’ll see articles about the latest partnerships with companies like Waymo, collaborations between OEMS to better develop the technology needed to make autonomous cars an everyday reality, or even stories about Tesla drivers being spotted asleep at the wheel. Aside from the stories that document the day-to-day developments, there are the future-facing pieces telling us what companies expect, what regulators are worrying over, what might happen. Those stories fall into one of three basic categories: a) self-driving cars are coming and you’ll be better off when they get here, b) self-driving cars are coming, so be very, very afraid, and c) self-driving cars are a long way off. That last category appeared in an email I got from a colleague a few months ago, cynically referring to “the media pumped fantasy of driverless cars.” It’s clear that some folks think driverless cars just ain’t gonna happen. Here’s a line from the opinion piece my colleague sent me: But while driver assistance systems are more and more common, it is highly doubtful that truly autonomous cars will evolve within the next decade. When they do they will be easy to sabotage. So, to quote a certain fictional federal agent, it seems that the truth is out there about autonomous cars – at least in the sense that there are lots of opinions and speculation about what will happen on that front, when it will happen, how it will happen, and what the end result will be. The truth of the matter is, we’ll just have to wait and see what comes to pass. In connection with that, while we’re looking briefly at self-driving in the print issue, we have a web-only white paper from the Union of Concerned Scientists offering their view that “self-driving vehicles have the potential to improve the safety, accessibility, and convenience of transportation substantially, but they also may increase energy use, transportation-related pollution, and roadway congestion. Public policy must take into account both the positive and negative potential of this emerging technology on communities and the environment.” Check it out on southernautomotivealliance.com. Meanwhile, we take some interesting looks at safety, with a story on how automotive associations are helping manufacturers address critical OSHA concerns, and another about a program aimed at helping make teenagers safer drivers. We have a glimpse inside the new joint venture between Mazda and Toyota in Huntsville, Alabama and continue the conversations about how the threat of U.S. tariffs is affecting automotive. Plus we have Tennessee robots, overlanding, and a nice piece about how Ford is helping STEAM education in Texas. Hope you enjoy the read, whether or not your car is driving you around as you do. Thanks for reading.
To subscribe at no cost and receive future issues via mail, visit southernautomotivealliance.com 10 | Southern Automotive Alliance | SUMMER 2019
PUBLISHER: Walker Sorrell EDITOR: Nicholas Patterson npatterson@pmtpublishing.com ART DIRECTOR: Rebecca Reeves WEB PRODUCER: Abby Parrott COPY EDITOR : Christine Gordon CONTRIBUTORS Dave Helms, Cara D. Clark, Bill Gerdes, Gail Allyn Short, Henri Hollis, Nancy Henderson, Carla Caldwell, Lawrence Elizabeth Knox, Megan Boyle, Mark Gilliland ADMINISTRATION: Molly Lipski Powell CIRCULATION: Anita Miller ACCOUNTING: Keith Crabtree ADVERTISING SALES: Chandler Busby 205-802-6363 Ext. 103 cbusby@pmtpublishing.com INTEGRATED MEDIA & EVENTS Sheila Wardy swardy@pmtpublishing.com 3324 Independence Dr Birmingham, AL 35209 (205) 802-6363 southernautomotivealliance.com T.J. Potts, President PMT Publishing, Inc. 3729 Cottage Hill Rd H • Mobile, AL 36609 pmtpublishing.com • 251.473.6269 Southern Automotive Alliance is published quarterly by PMT Publishing Inc. Copyright 2019 by PMT Publishing Inc. All rights reserved. Reproduction in whole or in part without written permission prohibited. Address all correspondence to Southern Automotive Alliance, 3729 Cottage Hill Road, Suite H, Mobile, AL 36609 or 3324 Independence Dr Birmingham, AL 35209. Phone (251) 473-6269 in Mobile or (205) 802-6363 in Birmingham. FAX in Birmingham is (205) 802-6393 and e-mail address is info@pmtpublishing.com. Letters to the editor are welcome or e-mail to npatterson@pmtpublishing.com. Please query the editor before sending unsolicited articles or photographs. Moving? Please note US Postal Service will not forward magazines mailed through their Bulk Mail unit. Please send old label along with your new address 4-6 weeks prior to moving.
SUMMER 2019 | Southern Automotive Alliance 11
TEXT BY: DAVE HELMS
Industry Benchmarks BMW’s Additive Manufacturing Push Aims To Cut Price Of Parts In Half
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hen additive manufacturing finally takes hold in the automotive industry, OEMs and parts manufacturers will find their operations changing overnight. Seeking to beat the curve, BMW Group in April launched its own project to introduce serial additive manufacturing into its culture. The “Industrialization and Digitization of Additive Manufacturing for Automotive Series Processes,” or IDAM for short, is backed with the expertise of 11 leading industry stakeholders and SMEs, including the Fraunhofer Institute for Laser Technology ILT. Its aggressive target is producing at least 50,000 components per year in mass production using additive manufacturing, and over 10,000 individual and spare parts. BMW has a history with additive manufacturing, having won awards early on for its 3D printed roof brackets. In 2018, the group invested $12.3 million to create a specialist Additive Manufacturing Campus in Oberschleissheim, just north of Munich. This new facility is reported to be one of two sites that will be handling metal additive manufacturing for the IDAM project, the other site being in Bonn with partner GKN Powder Metallurgy. BMW’s IDAM project looks to replace cost- and time-consuming processes, such as making molds, and to meet the desire for product customization at no extra cost. Automation and digitization of this line plans to cut manual activities along the process chain from 35 percent down to just 5 percent, with a cost reduction for metal parts at 50 percent. BMW, which traces its additive manufacturing roots to 1990, found early success in a 3D printed mounting for the top cover of its i8 Roadster, one that was stronger and weighed less than a cast metal version. n
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UNION REJECTED Workers at the Volkswagen plant in Chattanooga, Tennessee in June again rejected forming a union. It was the second such vote in recent years, and this time failed by a margin of 833776. The voting occurred over three days. NAVISTAR SPENDS IN HUNTSVILLE Navistar, maker of commercial trucks and buses, will
invest $125 million in new and expanded manufacturing facilities in Huntsville, Alabama. The move will bring 145 new jobs to the facility, which already manufactures International brand diesel engines. It will soon produce big-bore powertrains with global partner Traton.
HANWHA TO EXPAND Hanwha Advanced Materials America in Opelika, Alabama will
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South Carolina City All In For Robotics
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riven in part by the influence of BMW and its $7.8 billion investment in nearby Spartanburg, the community of Greenville, South Carolina has dedicated itself to attracting robotics students fresh out of high school. The students train on machines currently in use at area employers, giving them an advantage for career development, as detailed by Adrienne M. Selko in a recent story for Industry Week. “Greenville is a hot spot for robots, so having robot training on a resume is helpful,” Alexis Trumper, Kuka College manager for robotics, told the magazine. “With automation on the rise, students need to know how to operate these machines.” Both BMW and its suppliers are heavily invested in robots, meaning robot-savvy employees are in high demand. To fill that demand, robot manufacturer KUKA has supplied machines to the Center for Manufacturing Innovation (CMI), a program of Greenville Technical College. “We teach the exact skills that will be applied in the manufacturing cell,” says Trumper. Students receive training in hardware and software as well as hands-on robot experience. The center also offers space for CUICAR. n
spend $32 million to upgrade its facility over the next three years, creating 128 new jobs. It makes lightweight components for the auto industry. BEING NEAR CARS DANGEROUS Overall traffic deaths fell 1 percent in 2018, to 36,750, but the death count rose for bicyclists, motorcyclists and pedestrians on or near the road, according to the National Highway Traffic Safety
Administration in a preliminary report. Distracted driving is the suspected cause. STUDYING ARTIFICIAL INTELLIGENCE Alabama has formed one of the first state commissions to study policy implications of artificial intelligence technology. The Alabama Commission on Artificial Intelligence and Associated Technologies will devise policy recommendations
‘Sensual Sportiness’ Drives Hyundai Sonata’s Look For 2020
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he all-new Hyundai 2020 Sonata, due to start rolling off the line in September at Hyundai Motor Manufacturing Alabama, is equal parts sexy exterior and high-tech interior, wrapped in a third-generation vehicle platform that enhances safety and performance. The car was shown off for the first time in mid-April at the New York International Auto Show. The stakes are high, given this is Hyundai’s longest-standing and most successful model. The 2020 model is the eighth generation of the nameplate. Retail sales begin in October. “Sonata is our signature product,” says Mike O’Brien, vice president, product, corporate and digital planning, Hyundai Motor America. “Sonata is our legacy, and it needs to be special and memorable in all attributes. Sonata signifies our vision for future Hyundai designs, great active safety systems and cutting-edge technology that is effortless.” Among its new tech features are a digital key that allows it to be unlocked, started and driven without a physical key, using a smartphone. It also sports hidden interior lamps that turn chrome when shut off. Outside, it’s a fully transformed vehicle showcasing a sporty four-door-coupe look. The 2020 Sonata represents Hyundai’s new focus on creating emotional value using proportion, styling and technology. From the front, the 2020 Sonata is unlike any other Hyundai. Concave and convex forms are carefully orchestrated to provide a sexy, coupe-like character. A newly designed Digital Pulse Cascading Grille spans the front of the new Sonata, finishing at the innermost points of new combination headlamps that feature a distinctive and innovative new lighting architecture. A chrome line flows from the wing mirror, right around the side passenger windows, and returns to the front of the car by running down the length of the hood and ending at a sharp right angle beneath each headlight. This chrome strip features graduated LED Daytime Running Lights embedded with Hidden Lighting Lamps.
for the state’s tech sector. DRIVERLESS FLORIDA Gov. Ron DeSantis in June signed into law a progressive autonomous vehicle bill to allow self-driving vehicles—without a human inside—to operate on Florida roads. Previously, a person had to be inside such a vehicle to serve as emergency backup. It took effect July 1.
VW COZIES UP TO FORD Volkswagen recently shelved its relationship with Aurora Innovation Inc., a Silicon Valley self-driving start-up backed by Amazon.com Inc., to make room for a potential agreement with Ford and Argo AI, Ford’s self-driving unit. SANTA FE SPARKS HYUNDAI Hyundai had a terrific May for SUV sales, seeing a 29% boost in sales led by its Alabama-built
The side sections of the Sonata are accentuated by the light architecture, which connects two chrome lines that seamlessly link the windows and daytime running lights. Through these two character lines, the Sonata effuses a flowing and refined charm. The Sonata’s coefficient of drag (Cd) is just 0.27, with a flat underfloor covering and a range of body enhancements— including small fins across each taillight—that help keep the car fuel efficient, as well as stable. Inside, the slim dashboard spans the width of the cabin and features a first-in-class, 12.3-inch digital instrument cluster, customizable to suit different driving modes and preferences. At the center of the dashboard, a large, 10.25inch HD screen enables occupants to interact easily with the audio-video and navigation (AVN) functions. The all-new Sonata is the first model to utilize Hyundai Motor’s third-generation vehicle platform. Offering significant flexibility for vehicle development across multiple segments, the platform enables dramatic innovations in design, alongside improvements in safety, efficiency and driving performance. n
Santa Fe. SUV sales amounted to 55% of the its total sales for the month. PAINTING THE SOUTH Maaco, a top paint and collision repair franchise, recently announced a plan to grow in 20 key existing markets in the Southeast with a resale strategy which will launch the brand into a new era.
CHATTANOOGA HAS GOALS Chattanooga, Tennessee wants to double the percentage of graduates from public schools who go on to obtain postsecondary degrees or credentials by 2025, from 30% of the high school graduates continuing their education to 60%. Part of the plan is offering career institutes with apprenticeship programs, split up by industry.
SUMMER 2019 | Southern Automotive Alliance 13
BE N C HM A R K S
Auto Supplier Y-Tec Keylex Toyotetsu Breaks Ground On $220M Plant
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xecutives from auto supplier Y-tec Keylex Toyotetsu Alabama (YKTA) broke ground in May 2019 on a new $220 million manufacturing facility to employ 650 people in Huntsville. The YKT Alabama facility will be on the site of the Mazda Toyota Manufacturing U.S.A. (MTMUS) auto assembly plant now under construction in Limestone County. YKTA, a new joint venture formed among a trio of Mazda and Toyota suppliers, will produce structural body stampings and assemblies, as well as functional and chassis parts, for MTMUS. “YKT Alabama is a significant addition to the growing automotive cluster centered around the Mazda Toyota Manufacturing U.S.A. auto assembly plant in Huntsville,” Governor Kay Ivey said at the event. “This venture will not only create 650 well-paying jobs but also solidify the foundation of the automotive supply chain that is emerging in North Alabama.” Construction is under way and the company has already begun hiring its professional and technical staff, while the first production personnel will come on board in the fall of 2020. “We are proud to call Alabama our home and celebrate our commitment to North Alabama as our community,” YKTA President Ryuji Fujimoto said. The start of parts production at YKTA’s new facility will coincide with the launch of vehicle production at MTMUS in
2021. The Mazda-Toyota partnership is investing $1.6 billion to build and equip its Huntsville assembly plant, which will have up to 4,000 workers producing up to 300,000 vehicles annually. YKTA is the second supplier to announce plans for a facility on the 2,500-acre MTMUS site, joining DaikyoNishikawa US (DNUS), which will produce large plastic parts such as bumpers and instrument panels at a $110 million facility staffed with 380 workers. “We’re very committed to facilitating the formation of the supply chain for Mazda Toyota Manufacturing U.S.A., and the YKT Alabama joint venture facility is an important piece in the supplier puzzle,” says Greg Canfield, secretary of the Alabama Department of Commerce. “I am confident that we can deliver a first-class workforce for YKT Alabama and look forward to helping ensure the company has a smooth path to production.” n
Petition Leads To Government Probe Into Hyundai/Kia Fires
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n investigation into 3 million Hyundai Motor Co. and Kia Motors Corp. vehicles has been launched by the nation’s top auto safety regulator after reports of more than 3,000 fires that injured over 100 people. The probe was likely spurred by a petition generated by the Center for Auto Safety in 2018, which said a look at the noncrash fires was overdue. “It is long past time for the full power of the federal government to be brought to bear to answer why so many
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A POWERTRAIN TRIUMVIRATE Jaguar LandRover and BMW are to work together on developing electric car powertrains for the next generation of EVs. The companies behind the I-Pace and i3 electric cars have joined forces on developing new Electric Drive Units (EDUs)—everything that takes electricity from batteries and gets it through to the wheels on the road.
ANOTHER TARIFF TRIAL President Donald Trump raised angst in early summer by proposing a 25 percent tariff on Mexican goods. Every American auto plant in the South depends heavily on Mexico to do its work. The stock market dipped and the proposal was put on hold. AUTO SUPPLIERS ARISE A $60 million joint production company is forming in Alabama,
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thousands of Kia and Hyundai vehicles have been involved in non-crash fires,” said a statement from Jason Levine, executive director of the CAS. Thousands of older model Tucson and other Hyundai and Kia models have already been recalled due to unexplained fires. “While it may be six months post-due, we are gratified to see NHTSA’s Office of Defect Investigations open formal investigations based on our petition. Hopefully, this step will quickly lead to a recall being issued as soon as possible.” n
made up of an auto supplier affiliated with Toyota and two car seat makers linked to Mazda. A unit of Toyota Boshoku will create the venture with Delta Kogyo Co. and Toyo Seat Co. SETTLEMENT APPROVED Connecticut Federal District Court Judge Victor Bolden has approved a roughly $34 to $40 million settlement between Toyota and class
action plaintiffs who assert that safety issues with the rear power sliding doors of the car maker’s Sienna minivans place passengers at risk. TECH CO-OP AVAILABLE Automotive service technology students at Wallace State Community College in Hanceville, Alabama have the option to earn an associate’s degree in Automotive Technology and working
Foundation, Law Enforcement Partner To Find Key For Mindful Driving
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t’s an effort to create the first nationally recognized symbol for distracted and impaired driving awareness, based on the tragic loss of a standout Auburn University football player. The 43 Key Seconds initiative is being promoted by the Lutzie 43 Foundation, created in memory of Philip Lutzenkirchen, who was killed in a car crash in 2014. Lutzenkirchen, a back seat passenger in an SUV that contained three other people, was thrown from the vehicle and died instantly. Alcohol use, failure to use seat belts and excessive speed were factors in the wreck, police said. Since the tragedy, Mike Lutzenkirchen, Philip’s father and the executive director of the Lutzie 43 Foundation, has traveled the South and given talks before 170,000 young people, encouraging young drivers to learn from his son’s story. The foundation is now partnering with the Alabama Law Enforcement Agency. The 43 Key Seconds initiative seeks a pledge from drivers to spend 43 seconds, each time they get behind the wheel, to complete the safe driving checklist: clear head, clear hands, clear eyes and click it. ALEA will be distributing 7,500 units of the 43 Key Second key, lanyard and countdown card that are co-branded for ALEA and Lutzie 43. Local police and law enforcement will be distributing keys when they pull people over for driving misconduct (speeding, lack of seatbelt, etc.) in hopes of creating change on the roads and promoting distracted and impaired driving awareness. “We’re honored to partner with ALEA as we work together to create change in the way Alabama drivers behave on the roads,” Mike Lutzenkirchen says. “I strongly believe our key can become the nationally recognized symbol for safe driving and serve as a constant reminder for drivers to prioritize safety when they get behind the wheel.” The Lutzie 43 Foundation has been praised by a long list of notables, including football coaches Gus Malzahn, Nick Saban and Dabo Swinney. So far 2,800 keys have been distributed, and they are for sale on Amazon. The foundation has raised $2 million for awareness since 2014. Netherlands-based corporation Constellium says it will provide aluminum structural components for new BMW X Model Sports Activity Vehicles, according to justauto. n
at Mercedes-Benz U.S. International Inc. Applications are at www.learnmercedes. com. FIAT, RENAULT COURTING Fiat Chrysler Automobiles N.V. and Renault began exploring a deal this summer to create the world’s third largest carmaker. Analysts say such a deal would protect the new entity from competition on all sides.
SCHOOL SPENDING $7M FOR AUTO ED Dirt moved recently at Wayne Community College in Goldsboro, North Carolina for the groundbreaking of a new automotive education building, part of a larger plan for an Advanced Manufacturing Center. Funding for the $7 million project came from a bond issue voters approved in 2016.
Failed Union Vote Another Nail In UAW Coffin?
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When workers at the Volkswagen plant in Chattanooga, Tennessee once again rejected a proposal to form a union, industry observers noted it was a perhaps historic loss for the United Auto Workers. CNN Business writer Chris Isidore noted that foreign automakers such as VW and Toyota own 31 factories and produce nearly half of all cars assembled in the U.S. None of those foreign-owned plants is unionized. While UAWrepresented autoworkers are generally paid more, Southern autoworkers seem to feel the tradeoff of paying union dues and potentially corrupt leadership isn’t worth it. The UAW had a membership of more than 1 million in the 1980s but currently it stands at 155,000 at plants owned by GM, Ford and Fiat Chrysler. The union says VW workers make about $21 an hour, compared to $28 an hour at unionized automotive plants. “We are among the best paying employers in the region,” Volkswagen said in a statement before the three-day vote in June. VW is no stranger to unionized plants elsewhere in the world. More than 100 of its factories have union-represented workers, with the exception of ones in China and in Chattanooga. n
GRANT GIVEN FOR AUTOMOTIVE ED Calhoun Community College in north Alabama has been awarded a $200,000 grant from the Appalachian Regional Commission to help fund automotive technology classes for high school students in dual enrollment programs. HYUNDAI GIVES $250K Hyundai Motor America recently donated $250,000 to the
Montgomery, Alabama public schools for STEM education. Hyundai has more than 3,000 employees in Montgomery, where it has built vehicles for some 15 years. C CLASS MOVE? Thomas Industry News reports that Mercedes may move C Class production out of Vance, Alabama just five years after adding production of the sedan at the facility that has
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BE N C H M A R KS
Toyota’s $1M Donation For Literacy To Boost Alabama
Toyota recently announced a $1 million donation to the National Center for Families Learning to fight poverty through family literacy in the Washington, DC area and northern Alabama.
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s part of the 30th anniversary celebration of the National Center for Families Learning, Toyota is donating $1 million to fight poverty through family literacy in the nation’s capital and northern Alabama. The new donation brings Toyota’s total contribution over its 28-year partnership with NCFL to $50 million. To date, 420 Toyota Family Learning Centers have impacted more than 4.5 million parents and children across the U.S. “Education is key to a successful career,” says Toyota Motor North America CEO Jim Lentz. “I have seen the impact of NCFL’s two-generation literacy model, where children and their parents inspire each other to learn, and we’re proud to help further the great work of this organization.” NCFL will coordinate the family literacy programs in each of the receiving communities, partnering with local groups. The family learning center’s approach of engaging multiple generations of family members is a fundamental and distinguishing aspect of its work. The pioneer of family literacy, NCFL’s research-based, holistic model strengthens families, helps parents gain workforce and literacy skills to get jobs, and propels children to reach their potential academically. n
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specialized in SUV and crossover production.
39 distribution centers across 28 states, many in the South.
DIFFERS WITH TRUMP Akio Toyoda, chairman of the Japanese Automobile Manufacturers Association, recently rebutted comments by President Trump citing imported vehicles and auto parts as “threats to impair” the national security of the U.S. Japanese automakers have 24 plants, 45 research and design centers and
FINCH TO LEAD HUNTSVILLE David Finch, who spent 28 years with Toyota in South Africa before joining Toyota Motor Manufacturing Alabama as vice president in March, was named president of the engine facility, effective July 1. David Fernandes, who has been president of the Huntsville facility for three years, will move
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Just A Tariff Tweet Can Chill Auto Industry
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tweet from President Donald Trump, threatening to impose a 5 percent tariff on all goods imported from Mexico, sent waves of concern throughout the automotive industry in late May and early June. Trump deemed the tariffs necessary to force Mexico to intervene in the flood of illegal immigration and sanctuaryseeking families showing up at the southern U.S. border. Mexico stepped up its border efforts after the tweet. Every automotive plant in the South depends on parts and support from Mexico, but none more than in Texas, where Mexico is Houston’s largest trading partner. Trade between Mexico and Houston averages $23.4 billion per year, according to the Houston Chronicle. A full 25 percent tariff, as Trump threatened at one point, could increase the price paid for a car by U.S. consumers by as much as $1,300, according to Emmanuel Rosner, an auto analyst for Deutsche Bank. The Dow fell more than 300 points after the announcement and the tariff plan was eventually put on hold. The tariff threat quickly ramped up concern in part because global tensions between China and the U.S. have already caused automotive orders to slide between those two countries. n
to Toyota South Africa Motors as senior vice president of manufacturing.
Two staffing agencies, J & C Enterprise and Jian Enterprise, were also cited.
COMPANIES FACE $145K FINE Three companies, including auto parts manufacturer Donghee Alabama, face penalties totaling $145,438 from the Occupational Safety and Health Administration after a probe determined Auburn-based employees were exposed to safety hazards.
MOST POWERFUL MUSTANG Ford Motor Co.’s 2020 Mustang Shelby GT500 will boast 760 horsepower and 625 foot-pounds of torque, it announced recently, making it the automaker’s most powerful street-legal car ever, reaching 60 mph in about 3 seconds.
Autocar Launches New Severe-Duty Trash Hauler
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labama’s automotive industry puts out some sleek, stylish cars and SUVs at its various assembly plants. One automotive assembly plant that opened its millionsquare-foot truck, $120 million plant in Birmingham just over a year ago heads a little different direction. Autocar recently announced it would start building the DC-64R, a new severe-duty truck aimed specifically for refuse applications, starting later this summer. The company, founded in 1897, built the first U.S. truck in 1899. Its newest model was developed with insight, data and guidance from waste haulers around the country, according to Autocar President James Johnston. “We could not have engineered a truck this good without all their feedback that resulted in innumerable improvements,” Johnston says. “We’re grateful for their help and proud to bring to this market a truck that is honestly customer-built.” Among its features, the 64R offers a completely new cab that maximizes productivity by putting all its controls within easy reach of any size driver. The cab structure is built from a combination of steel, judiciously chosen aluminum components, as well as corner castings to withstand years of refuse abuse. It has a completely upgraded electrical system meant to resist the worst conditions the refuse industry can throw at it. Autocar
also says it’s also the first truck to feature ultra-high-strength 160,000 PSI steel frame rails, 24 percent stronger and lighter than the rails on other trucks on the market, eliminating the need for frame liners in nearly all refuse applications. On the tech side, the new model has one-touch diagnostics, telling the operator or technician of any fault that has occurred and showing them how to fix it. The 64R will also the first of Autocar’s lines to sport the recently announced company bowtie logo, reborn on its 100th birthday. Autocar builds its trucks in Birmingham and Hagerstown, Indiana. n
Automotive’s Greenhouse Gas Footprint Beats Big Pharma
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hile you don’t typically think big smoke stacks and pollution when you consider Big Pharma, the global pharmaceutical industry is a bigger contributor to global warming than the global automotive production sector. That conclusion was reached in June by writer Lofti Belkhir of Salon, who compared the two industries in a June 9 website article. The pharmaceutical sector is far from green, according
BAY STEEL EXPANDING Bay Steel will spend $6.2 million to expand and relocate from the Port of Mobile to Todd Acres Drive in nearby Theodore, Alabama. The company wholesales carbon steel products. HYUNDAI CUTS $388M RIBBON Hyundai Motor Manufacturing Alabama celebrated the opening of a $388 million cylinder manufacturing plant in
Montgomery recently. It’s the third element of a massive auto complex that employs about 3,000 people. SUPPLIER TO HUNTSVILLE DaikyoNishikawa US has announced plans for a $110 million plant in Huntsville, to provide parts for Mazda Toyota Manufacturing U.S.A. now under construction. The plant will make large resin parts such as bumpers and instrument panels.
to Salon’s analysis. The drug industry produced 48.55 tons of CO2e (carbon dioxide equivalent) per million dollars of revenue in 2015. That’s 55 percent greater than the automotive sector produced at 31.4 tons of CO2e per million of revenue for the same year. Salon restricted its analysis to the direct emissions generated by the companies’ operations and to the indirect emissions generated by the electricity purchased by these companies from their respective utilities companies. n
BRISK ATTENDANCE Birmingham, Alabama played host to the Automotive Advanced Technology Summit in early May, which attracted 200 companies. The meeting featured networking opportunities and one-on-one meetings. TECH AND CHARITY Alabama-based technology firm Dynetics recently donated $30,000 in charitable gifts to Athens State University and the
University of North Alabama, with $15,000 going to each institution. Both teach supply chain management, a vital automotive skill. RANGER STARTS SLOW After months of hype, Ford Motor Co. only sold 15,169 units of its new 2019 Ranger pickup through April, beating just the GMC Canyon which saw 9,374 sales. The Toyota Tacoma saw 78,558 through April.
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B E N C HM A R K S
As Predicted, Technology Will Solve Distracted Driving Dilemma
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ome time back in this space, your faithful Benchmarks correspondent made the bold prediction that all the educational campaigns in the world would not stop drivers from texting, because, well, people are just no darn
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good. They can’t be counted on to put the safety of their passengers and fellow motorists ahead of their need to post on Facebook about what a great burger they had for lunch. But fear not, he said. Technology will find a way. And you had to figure Volvo, which has pledged to end all fatalities involving its product, would be on the forefront of the solution. The company wants to combine in-car cameras with artificial intelligence to figure out when drivers are too drunk or distracted to be behind the wheel. Using its “next-gen, SPA2-based vehicles,” that being the second generation of its modular platform, such cameras would look for erratic behavior, non-responsiveness and steering or braking errors. In response, it would initially give audiovisual warnings and perhaps slow the vehicle’s speed. Should more intervention be needed, Volvo’s monitoring system would contact the company’s on-call driver assistance service, which might then use remote driving systems to pull the car over. While Volvo seems to be at the forefront of drivermonitoring cameras, several other car companies are working on similar systems to keep drivers and their passengers safe. n
Analyst Foresees 30 Percent Drop In Auto Sales By 2022
Bank of America Merrill Lynch analyst predicts a tumultuous 30 percent decrease in auto sales by 2022 as cyclical demand softens and traditional vehicles give way to electric models and ride-sharing options. John Murphy, a senior auto analyst interviewed by Breana Noble of The Detroit News, said automotive companies need to get their core business in order so that they’d be prepared for the unsettling patterns coming. Murphy predicts about 14 million vehicles to be sold in 2022 but says automakers would be ill served to lower prices as they did during the Great Recession. They’ll need higher profits to do battle with Silicon Valley tech companies with
N E W S
H U B
ZF CHASSIS HONORED ZF Chassis Systems of Tuscaloosa got love recently as a 2019 Manufacturer of the Year by the Business Council of Alabama and the Alabama Technology Network. ZF was honored along with two non-automotive companies at the Alabama Activity Center. SEDANS STILL SLOW Toyota Motor Co. saw a 4.4 percent fall in U.S. sales in April,
moving 162,506 units that month compared to 170,706 in April 2018. Analysts pinned the slower sales on slack demand for sedans such as the Corolla and Prius. NEW STEEL OPERATION Olympic Steel Inc. recently opened an operation in Hanceville, Alabama which will support Olympic Steel’s plate and sheet products in north Alabama and beyond.
18 | Southern Automotive Alliance | SUMMER 2019
designs on grabbing transportation dollars. One bright spot: Murphy counts 62 new-product launches in the next four years, which should draw attention to showrooms. He cites Ford Motor Co. with recent updates of the Ranger, Escape and Explorer, with new versions of the F-150 and Bronco still in the pipeline. While new models will help, the bad news is that the payoff for electric and self-driving cars is by no means just around the corner. He estimates electric-vehicle penetration at only 5 percent by 2025 and 15 percent by 2030. He also predicts solid recovery in the industry after the sales drought in 2022. n
TALLADEGA’S DREGS Ever wonder what fans leave behind at Talladega Superspeedway after the race is over? According to a recent tweet by employees, items included a partially burned tent, a hairdryer and a pair of panties. The report was called “Left Behind: Talladega.” NEW KIA TRUCK? There’s talk in MotorTrend that Kia Motors America
is considering a version of Hyundai’s new production truck, but with an upmarket, lifestyle-oriented treatment. Comparisons were drawn to the Honda Ridgeline and Volkswagen Tanoak. BLUE OVAL BUSTS IT Ford Motor Co. posted an impressive North American performance during 2019’s first quarter, seeing shares go up 11 percent by April 26. The
Trump Trade War Forces Volvo To Adapt In South Carolina
Never Forget, Your Car Is Silently Watching You
A I
t started as a simple plan. Volvo would build a new $1.1 billion plant in Ridgeville, South Carolina that would employ 1,500 workers to build S60 luxury sedans for export to China. Charleston’s centuries of history as a global port, the South’s reputation for competitive labor costs and an abundance of international partners in the area made everything glisten with opportunity. Then came President Donald Trump’s America First trade policies, particularly involving China, the country where ownership of Volvo is now based. As Volvo and South Carolina trade officials recently told Camila Domonoske of NPR, the plan changed. Tariffs on steel and aluminum are now pushing up the cost of raw materials and U.S.-made Volvos aren’t being shipped out to China. “It’s kind of a disappointment, but we’re going to work through it,” Trey Yonce, a supervisor at the plant, told NPR. “It wasn’t what we wanted to hear.” The plant continues production but cars are now being exported to Belgium for eventual sale across Europe. Volvo plans to also direct its South Carolina-made cars to countries in the Middle East, Africa, Oceania and the Asia Pacific region, excluding China. Meanwhile, in many places, conservative Southern politicians and automotive industry leaders struggle to balance their support of Trump with his less popular trade war. Jim Newsome, the CEO of the South Carolina Ports Authority, emphasizes the importance of world trade on everyday people in his state who depend on automotive jobs. “We ought to be trying to lower tariffs, not raise tariffs,” he told NPR. “The global automotive industry could benefit from zero tariffs.” n
company’s woes in China and South America couldn’t stop the North America surge. TRACKED AT CONVENTIONS? Electronics entrepreneur Nick Hanson has devised a small, portable wireless device that can read chips inserted into name badges or lapel pins at conventions, allowing planners to track which exhibits participants visit. No word on whether it tracks you to the bar.
FIRST COLUMN RISES The first steel columns have risen at the $1.6 billion Mazda Toyota Manufacturing U.S.A. in Huntsville. Officials have said that despite a rainy 2019, construction is on schedule for the plant. HYUNDAI CRUISING Hyundai Motor saw its first rise in profit in five quarters this spring, with a better-than-expected 24 percent rise in net profits in the
s we know from observing Facebook CEO Mark Zuckerberg’s meteoric rise to billionaire status, there’s good money to be had in personal data collection. But it’s not just social media that’s tracking your every move. Along with your phone, your home’s smart speakers and your flat screen TV, your car is also paying a good bit of attention to how you spend your time. If you own a comparatively new car or truck, that computer on wheels is generating about 25 gigabytes of data every hour, as much as 4,000 gigabytes a day, of data on your driving habits, destinations, your dining preferences and what music you like. According to the management consulting firm of McKinsey & Co., that information trove could be worth as much as $750 billion by 2030. What remains unanswered is how much of it is subject to privacy laws. Happily, there’s a Southerner on the job. While no comprehensive federal data privacy law has yet to be passed, U.S. Sen. Roger Wicker, R-Mississippi, has expressed a desire to get such legislation passed by the end of this year. Wicker is the chairman of the Senate Committee on Commerce, Science and Transportation. Auto Alliance notes that car companies often have little specific information on whose data is being collected, since they don’t know who’s driving the car. Thus the trade group has requested that the industry only be required to provide summary information to consumers about the data being collected. n
first quarter. Sales are promising in both South Korea and the U.S. market. WORD FROM NEW YORK Auto analysts at the New York International Auto Show were predicting, at best, stagnation for 2019, but several automotive companies have seen sales this summer that top the assessment. Happily, the same industry watchers are saying 2020 and beyond will see
improved sales. NEW POWER FOR HYUNDAI Hyundai Motor Manufacturing Alabama announced in July it will be one of the first plants to produce an innovative engine. The world’s first continuously variable value duration (CVVD) engine technology will be built into Hyundai’s Smartstream G1.6 T-GDi engine, boosting power 4 percent, efficiency by 5, and cutting emissions by 12 percent.
SUMMER 2019 | Southern Automotive Alliance 19
EXECUTIVE Q&A INTERVIEW BY: NICK PATTERSON // PHOTOS COURTESY OF MAZDA TOYOTA
The Mazda Toyota plant being built in North Alabama set the automotive industry abuzz last year. Mark Brazeal talks about how two global giants are working together in their groundbreaking partnership
Coming together Mazda Toyota Manufacturing will produce utility vehicles for both companies at the Limestone County plant when it’s fully operational.
ack in January 2018, two Japanese car manufacturers announced a joint venture plant to be built in Huntsville, Alabama. The Mazda Toyota facility marked the first U.S. site for Mazda and an expansion of the American footprint for Toyota which already had an engine plant located in the vicinity. The state of Alabama won the $1.6 billion plant after competing with 11 other states. Mazda Toyota 20 | Southern Automotive Alliance | SUMMER 2019
Manufacturing is expected to eventually have a workforce of 4,000 employees, and one day to build 300 thousand cars a year. Come forward more than a year later. Plans for the new facility are well underway. We asked Mark Brazeal, now vice president at Mazda Toyota Manufacturing – after nearly two decades at Toyota, alone - to bring us up to speed on progress toward opening the plant and how the two venerable companies are coming together under one roof. The interview was conducted in May.
Q: Where does the plant stand now in terms of site work? Is it on track for the plant opening in the original timeframe? And can you clarify when it is expected to be up and running? Mark Brazeal: It’s an exciting time for the Mazda Toyota Manufacturing team and we’re on schedule to start vehicle production in 2021. Site work for our vehicle assembly plant is well underway and we’re making terrific progress to meet our project goals despite all the rain Huntsville received in the spring. Currently, we are working with the city
Early days at the joint venture facility saw cranes helping to transform the site into Mazda’s first plant in the U.S. and Toyota expand its regional footprint.
of Huntsville, TVA, Athens Utilities and Huntsville Utilities on the site’s infrastructure to support the future demand of our new vehicle assembly plant. Also, grading has started on our interior roadways and parking lots, which will be ready to accommodate our 4,000 team members, plus traffic from our onsite supplier partners. Peak construction will occur this summer when more than 2,500 construction workers will be on-site. Also, of note relating to site work and preparation: • In April, our Mazda Toyota team celebrated a milestone event, the raising of the plant’s first steel beam – one of 1,600 that will be used to construct the plant. Everybody signed this first steel beam, watched it go into place and beamed with excitement … It was a proud moment for our team that brought us even closer together. • In May, two Mazda Toyota Manufacturing onsite supplier partners - Daikyo Nishikawa U.S.
and YKTA - separately announced significant investments that will create more than 1,000 jobs. Both suppliers have begun plans to construct their separate facilities.
will begin hiring production team members starting in mid-2020. We encourage anyone who’s interested in learning more about joining our team to visit MazdaToyota.com for information.
Q: What about staffing – where do you stand? MB: Mazda Toyota Manufacturing’s temporary office in the heart of Huntsville’s Research Park has approximately 40 team members (as of May 31). We are truly a start-up enterprise and hiring is well underway in the areas of professional staff (HR, accounting and finance, administration), skilled labor (maintenance, facilities, tool and die) and production team leaders (paint, assembly, body and weld), and by the end of 2019, we expect to have approximately 250 team members. We
Q: Are you facing any staffing challenges and if so, what? MB: As we ramp up hiring of production team leaders by July, we are quite pleased with the quality and quantity of qualified applicants, which gives us even greater confidence that we’ll attract and identify good applicants for other positions. Plus, Huntsville and North Alabama continues to attract top talent thanks to the region’s diverse business climate. That will ultimately benefit Mazda Toyota, as well as other businesses. It’s a massive undertaking trying
As we ramp up hiring of production team leaders by July, we are quite pleased with the quality and quantity of qualified applicants, which gives us even greater confidence that we’ll attract and identify good applicants for other positions. SUMMER 2019 | Southern Automotive Alliance 21
Countess with c World In Motion E X E C U TI V E
Q& A
to hire and eventually train thousands of new hires across various groups, and quite simply, we cannot do it alone. That’s why having outstanding partners at the Alabama Industrial Development Training (AIDT) to assist Mazda Toyota with the application process, written and hands-on assessments, interviews, as well as drug screening and background checks has been a tremendous asset. Q: What has to happen for two major automakers to come together in one unified venture, under one roof? MB: Mazda Toyota Manufacturing wants to combine the wisdom and technology of two great companies to produce high‐quality cars in a very safe, cost efficient manner. The objective of Mazda is to learn the unique aspects of manufacturing in the U.S. along with gaining efficiencies of a shared supply base with Toyota. The objective for Toyota is to learn from another company and to use
Corporate culture at Mazda Toyota focuses on five key words: collaborate, appreciate, relate, innovate, motivate, Brazeal says.
those learning points to make internal changes. Additionally, Toyota expects to strengthen its North American production structure with additional production capacity in the U.S. Aside from these objectives, Mazda and Toyota personnel from Japan have been working with their
American counterparts at Mazda Toyota Manufacturing across every business function, such as engineering, production, HR, etc., to develop our business systems, practices, methods and culture. So, what has to happen? Tremendous collaboration! Q: How do the different company cultures connect? MB: At first glance, Mazda and Toyota and are completely different companies, however when you begin to peel the layers, both companies have developed a deep admiration for each other through their passion to exceed customers’ expectations with great products, overarching vision and philosophy of continuous improvement. And while we’ll use both company’s philosophies as guides, the Mazda Toyota Manufacturing venture provides us with the opportunity to establish our own values to set the foundation for our culture.
Eventually, Mazda Toyota will have to meet the challenge of bringing on thousands of new hires.
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Q: Back when the joint venture was announced, Akio Toyoda said that “two things brought the companies together: the love of cars and the love of
children involved in the n program.
While we’ll use both company’s philosophies as guides, the Mazda Toyota Manufacturing venture provides us with the opportunity to establish our own values to set the foundation for our culture. hometowns.” How is that playing out – particularly the “hometown” relationship building? MB: In the case of Mazda Toyota Manufacturing, we are proud to call Huntsville our hometown! We’re incredibly fortunate that Toyota’s 18-year-old engine plant developed outstanding relationships throughout Huntsville and the state, which has opened many doors for Mazda Toyota. Since our announcement to locate in the Rocket City, there’s been a tremendous sense of hometown pride and Mazda Toyota has been blessed to create new relationships, including those with our North Alabama communities, our suppliers and business partners, the Department of Commerce and the Governor’s Office, among dozens of other organizations and agencies. Also, I have had the pleasure to speak at numerous community organizations and build relationships with the Limestone County Career Technical Center and local two-year colleges
that we can overcome these challenges, build trust and make the best longterm business decisions for our company and team members. Q: What’s your day-to-day like at this point in the process? MB: I realize it’s cliched to say each day is different, however it truly is! What’s unique about my role is my ability to interact with every group/division and better understand their vision, current situation and the challenges they face. When we collaborate as one team and share good ideas, great things happen, and from this perspective it’s been extremely rewarding. Additionally, it’s been so exciting hiring new Mazda Toyota team members. When they arrive, they’re
ready to contribute, be challenged, and know that they have a great team that they can trust to help them succeed. I’m incredibly proud of our team’s work and grateful for their personal sacrifice during the company’s start-up. I’m confident that our hard work will pay off in the long-term for our team, our business partners, our customers and for Alabama. Q: What’s the most important thing Mazda Toyota wants people to know about the joint venture? At Mazda Toyota, we aim to attract the best team members and further develop their skills to help us set the foundation for our company’s culture. And to help establish our employer value promotion, we came up with five key words: collaborate, appreciate, relate, innovate, motivate. Ultimately, we believe these key words along with our values, mission, and vision will become the foundation of our company. n
Q: Mark, what’s it been like for you, transitioning from focusing on one company, to now focusing on two? MB: Since I joined Mazda Toyota Manufacturing after 17 years with Toyota, there have been many challenges starting this project. However, the rewards have been tremendous. Specifically, it was tremendously exciting to start our hiring process and provide employment opportunities to the great people in North Alabama and beyond. In my role with Mazda Toyota, I’ve been able to work with lots of talented individuals across multiple functions, who teach me things about their areas and the challenges their team faces. By collaborating with the team, addressing challenges upfront and applying our philosophies and employer value promotion … we know SUMMER 2019 | Southern Automotive Alliance 23
INDUSTRY OUTLOOK
New Car Sales Slump
Automakers face slowing new auto sales as more U.S. shoppers eschew higher prices, rising interest rates and passenger sedans TEXT BY: GAIL ALLYN SHORT
W
hen it comes to buying brand new cars, more consumers these days apparently are having second thoughts. The proof is in the numbers. Edmunds reported that April 2019 new car sales fell 2.3 percent from April 2018 to 1.33 million sales with the lowest seasonally adjusted annual rate (SAAR) for the month in the last five years. “The drop in sales comes partly from saturated demand from years of elevated sales, but also reflects the increase cost of purchasing a vehicle in today’s market,” the Edmunds report says. This comes after a disappointing first sales quarter for carmakers. Cox 24 | Southern Automotive Alliance | SUMMER 2019
Automotive forecasted a sales rate of around 16.7 million units, lower than the 17.1 million sales rate of the first quarter in 2018. Yen Chen, a senior industry economist at the Center for Automotive Research in Ann Arbor, Michigan, says factors affecting auto sales this year are many. “Macroeconomic conditions, such as GDP, employment and population, are major determinants to affect long term auto sales,” Chen says. “The short term sales fluctuations are affected by microeconomic factors,” he says, including vehicle price, gasoline price, interest rates and wages.
Second quarter vehicle sales, says Chen, will likely also be slow. “The 2- to 3 percent sales decline is expected,” says Chen, “and nothing catastrophic is projected to happen in the second quarter. However, if economic conditions suddenly sour for some reason, such as the U.S.-China trade negotiation breaking down or the president choosing to impose 25 percent tariffs on all imported auto and parts, the impacts will be huge.” “International trade is critical to the U.S., automotive industry,” says Chen, “and it’s not just the automotive parts coming in from China and Mexico. Many vehicles produced in Alabama
and South Carolina are produced for export markets. If the United States cannot produce these vehicles efficiently and competitively, it threatens the viability of those plants.” Escalating Interest Rates, Prices A March 20 Edmunds report forecasted that rising vehicle prices along with higher interest rates would make it harder for many consumers to buy new vehicles. By April, Edmunds reported that interest rates had risen to 6.3 percent. And, according to Experian’s Q4 2018 State of the Automotive Finance Market report, the average loan for new vehicles rose to $31,722, up $623 from the average in 2017. In contrast, the average loan for a used vehicle averaged about $20,000, up $488 from 2017. Additionally, the average monthly payment for a new car was $545 compared to $387 for a used vehicle. “We’re seeing lower retail customer sales because the buying conditions aren’t quite what they were a couple of years ago,” says Michelle Krebs, director of automotive relations at AutoTrader. com. “Interest rates are higher.”
“People are very sensitive about what their monthly payment is,” she says. “So that has caused people to hold off on buying new vehicles or just pushed some people out of the new car market altogether, and many are opting for used cars.” Analysts say the used vehicle market is growing. Cox Automotive reports that almost 64 percent of car shoppers are now considering buying used vehicles. One example is Mercedes-Benz USA, which reported sales in April for its Mercedes-Benz Certified Pre-Owned (MBCPO) models at 10,311 vehicles for the month, a 10.9 percent increase from the past year. Year-to-date basis, MBCPO sold 40,676 vehicles, 4.2 more from the previous year. Changing Tastes Chen says, however, that the new vehicle sales decline is not equal across the segments. Sales of SUVs and CUVs, for example, are still growing and pickup trucks are seeing a moderate sales growth rate. Sales of sedans, on the other hand, have fallen in the United States. In response, a few carmakers
have announced plans to discontinue producing some sedans altogether and focus on SUVs, crossovers and pickup trucks instead. One company making production shifts is the Ford Motor Co. Ford announced last year that it would stop producing sedans for its North American market except for the Mustang and its new Focus Active crossover. In a March 19, 2019 press release, the automaker announced additional plans to rev up production of its best-selling Ford Expedition and Navigator at its Louisville, Kentucky plant by 20 percent. “Retail sales of the Expedition eight-passenger SUV surged 35 percent and it gained 5.6 percentage points in market segment share last year. Expedition’s average transaction price increased $11,700 and is now $62,700. Navigator sales grew 70 percent in 2018 from 2017, to 17,839 sold, giving
The 2- to 3 percent sales decline is expected, and nothing catastrophic is projected to happen in the second quarter. However, if economic conditions suddenly sour for some reason, such as the U.S.-China trade negotiation breaking down or the president choosing to impose 25 percent tariffs on all imported auto and parts, the impacts will be huge. — Yen Chen, Center for Automotive Research
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I N D US T R Y
O U TLO O K
Increasing numbers of car buyers are considering used vehicles in a market where many consider new cars too expensive.
We’re seeing lower retail customer sales because the buying conditions aren’t quite what they were a couple of years ago. Interest rates are higher. –Michelle Krebs, AutoTrader.com. Navigator its best sales year since 2007.” And because of slowing new vehicle sales, automakers’ inventories are up. Edmunds reported in April that new vehicle inventories were at more than 4 million. “Fleet sales and increased incentives will help tackle existing inventories,” says the Edmunds report, “but the lower sales pace should also prompt production reductions.” Chen says incentives will always be there for less popular vehicles. “Because the automakers already reduced the number of sedan models,” says Chen, “the pressure to provide incentives for sedans will decline. SUVs, CUVs, and pickup trucks are hot products and the incentives for these vehicles are for competition, not due to lack of demand.” The average cost of a new car reached close to $37,000, according to the April Edmunds report. A major reason for the increase in prices is that cars have become more expensive to produce in recent years. New technologies such as lane assist, connected mobile apps and automatic steering avoidance have added to the cost of new vehicles. “Cars are getting more expensive,” says Krebs. “They have more safety features, which are required by regulation. We have more technology 26 | Southern Automotive Alliance | SUMMER 2019
because that’s what consumers want and that’s pushing prices higher, but so are tariffs. If the trade agreement, U.S.Canada and Mexico goes into effect, we expect even higher prices. If there are tariffs put on vehicles from Japan, Europe and everywhere else, we expect prices to go higher, too, and that will lower sales.” Chen adds that the technology available in new and late model vehicles today also drives up operating costs such as repair, maintenance, and insurance, for consumers. “The overall production cost increase will be passed on to consumers through vehicle prices,” Chen says. But the prices paid by
consumers depend on the value perceived, not the equipment installed. For example, an SUV today will ask for a much higher price than a mid-size sedan could, even [if ] both vehicles come equipped with the same array of technologies.” Pressures On The Supply Chain Chen says, however, that if vehicle sales continue to decline through the summer, unemployment rates could go up. He says one segment of the automotive industry that could feel the impact are suppliers. “The suppliers will always suffer when the vehicle sales are down,” says Chen. “The automotive supply chain long ago adopted just-in-time delivery. Suppliers get paid by the product shipment, not the contracted volume. Many workers in automotive parts manufacturing do not have union contracts to protect their jobs. Therefore, laying off employees is inevitable if the sales continue to decline.” But Chen remains optimistic. “Long term motor vehicle sales are determined by the growth of economy and the population,” says Chen. “As long the U.S. economy continues to grow and the population continues to increase, the demand for motor vehicles will continue to grow, despite the short term fluctuation.” n Mercedes-Benz USA reported April sales of its certified, pre-owned vehicles rose almost 11 percent from last year. For the year, the company’s sales of pre-owned cars is up 4.2 percent.
SUMMER 2019 | Southern Automotive Alliance 27
INDUSTRY OUTLOOK
USMCA trade agreement approval by U.S. Congress not likely this year
Auto industry awaits decision on Section 232 tariffs on vehicle-related imports TEXT BY: BILL GERDES
T
he ratification of the United States-Mexico-Canada (USMCA) treaty, the new NAFTA, is a done deal in Mexico, well on its way in Canada, but in the United States? Not so fast. Most think tanks consider it unlikely that the new treaty will be approved by the U.S. Congress in 2019, given the complicated process of approval, Congressional recesses and partisan fighting. Christopher Sands, senior research professor and director of the Center for Canadian Studies at Johns Hopkins University, writing on thedialog.org, says, “It is unlikely, but not impossible, 28 | Southern Automotive Alliance | SUMMER 2019
that the 116th Congress will approve legislation implementing the United States-Mexico-Canada Agreement (USMCA) in 2019.” While President Trump’s threat to impose a 5 percent tariff on all Mexican goods, including autos, appears to be in the rear view mirror, auto industry observers say automakers are still concerned about Trump’s trade war with China, which supplies a wide range of car parts for use on American assembly lines and could cause hiccups in the North American auto industry supply chain. Likewise, the auto industry is awaiting a decision on whether proposed tariffs on auto
imports from other countries are going to be imposed. The various trade battles come at a bad time for the auto industry. Sales are down more than 2 percent for the first five months of the year and are expected to decline to 16.9 million, marking only the second downturn since the end of the Great Recession. Nadia Theodore, Canadian Consul General for the Southeast United States in Atlanta who has a background in treaty negotiation, says of the new USMCA accord, “From Canada’s perspective, it really is a very good news story for all three countries. “The new agreement will insure
that our companies continue to get duty-free access, for all NAFTA goods, and it of course maintains outcomes that NAFTA had in trading services and labor mobility. “It really reinforces the North American supply chain which enables Canada, the United States and Mexico to really compete as a regional bloc, against international competitors and win. NAFTA, and now USMCA, is really what binds us together as a North American supply chain force. That allows our companies to compete globally against our international competitors and win more times than we do not.” Theodore says the Canadian government was looking for the United States to honor a commitment to remove the Section 232 tariffs on steel and aluminum it had levied on Canada and Mexico, which happened May 17. Section 232 of the Trade Expansion Act of 1962 authorizes the president to adjust specific imports from other countries if the importation “is in such quantities or under such circumstances as to threaten to impair the national security,” according to the Bureau of Industry and Security. “And we had said all along that once we got those tariffs on steel and aluminum removed, that one, Canada would eliminate our reciprocal tariffs that we had in place, vis-àvis the United States, we would do that immediately, and then two, we would move swiftly to implement the agreement in Canada,” she says. “And so true to our word, two days after the United State removed the steel and aluminum tariffs against us, we eliminated the tariffs that were in place vis-a-vis the United States, and Bill C100, which is the act to implement the agreement, between the United States, States, Canada and Mexico, has been tabled in Canada in Parliament, and not only has it been tabled but it has received first and second readings in our House of Commons. The second reading has happened and so there is one more reading, the third reading, to
take place, after which it will then go to our Senate for three readings, and then, once it has received those three readings in the Senate and the Senate and the House have passed the bill, it can go to the Governor General and then become law.” Theodore says Canadian Minister of Foreign Affairs Chrystia Freeland has made it clear that she will move forward. The Canadian House adjourned in June 21 but Theodore says Parliament can be recalled if necessary or warranted. “To me the treaty will continue the positive impact on the auto industry. Again, the auto industry has benefitted from this supply chain and partnership that we have built in North America that has enabled them to compete and win,” she says. “USMCA, in the auto industry in particular, we have actually strengthened rules of origin, and provided certainty for companies. So really with this new USMCA, it will really incentivize North American production and North American sourcing which will create well-paying jobs in all three countries. “We are talking about advanced manufacturing jobs that pay people a living wage, so really the new and strengthened rules of origin that we negotiated that is part of USMCA is really going to be good news for the auto sectors in all three countries,” Theodore says. Also, Mexican President Andrés Manuel López Obrador has announced he will summon Mexican senators for an extraordinary session and officially send them the text of the USMCA to begin ratification. Whereas Canada’s name for the USMCA is CUSMA, the Mexican government calls it the Tratado entre México, Estados Unidos y Canadá (T-MEC), which is Spanish for the Mexico-United States-and-Canada Treaty. Since Mexico regards it as a treaty, it only requires a simple majority approval from the country’s upper legislative chamber, the Senate of the
President Donald Trump, Congresswoman Nancy Pelosi, Mexican Preident Andrés Manuel López Obrador and Cananian Prime Minister Justin Trudeau. SUMMER 2019 | Southern Automotive Alliance 29
Republic, in order to be ratified. With Canada and Mexico officially starting the process for their respective ratifications of the USMCA, it probably will not be long before a USMCA Implementation Act is at least introduced in Congress. In June, U.S. Speaker of the House Rep. Nancy Pelosi, D-CA, named U.S.
Rep. Terri Sewell, D-AL, to the House Democrats’ Trade Working Group, a task force that will be responsible for negotiating improvements to the USMCA. Sewell represents an area that includes or is near Mercedes, Honda and Hyundai assembly plants. “The task force has a lot of work ahead of it, however, I am optimistic that we can work with United States Trade Representative Robert Lighthizer to ensure the new trade agreement grows the American economy, protects workers and strengthens our relationships with our neighbors,” Sewell says. Sewell, a member of the House Ways and Means Subcommittee, will collaborate with U.S. Rep. Rosa DeLauro, D-CT, on the enforcement capabilities in the trade agreement. Other representatives will tackle
issues related to drug pricing, labor issues, environmental issues and more. Sewell says that she was “honored” to have been named to the task force charged with “making tangible improvements” to the nation’s new trade agreement. In June Sewell and Jackie Walorski (R-IN) announced the House passage of a bipartisan amendment to the Commerce, Justice and Science funding bill calling on the Trump administration to release the Commerce Department’s Section 232 report on imported automobiles and auto parts. On May 17 the decision was delayed for 180 days. Under the policy, the secretary of commerce can conduct an investigation into whether a particular import threatens to impair national security. Inquiries can be initiated
The products hard-working Americans in the auto sector design, build, sell and service are not a threat to our national security. The auto workers in my district are terrified that any day President Trump could announce tariffs that would threaten their jobs. —Terry Sewell 30 | Southern Automotive Alliance | SUMMER 2019
To me the treaty will continue the positive impact on the auto industry. Again, the auto industry has benefitted from this supply chain and partnership that we have built in North America that has enabled them to compete and win. —Nadia Theodore by interested parties, requested by a department or agency head or selfinitiated by the secretary. “It has been over four months since the Department of Commerce submitted their Auto 232 Report to the White House, and neither Congress nor the public has seen the report,” Sewell says. “Unfortunately, I think I know why this administration will not share this report. It’s because the products hard-working Americans in the auto sector design, build, sell and service are not a threat to our national security. The auto workers in my district are terrified that any day President Trump could announce tariffs that would threaten their jobs.” Sewell has been an outspoken opponent of the Trump Administration’s proposal to dramatically raise tariffs on auto imports. She led a bipartisan group of 159 lawmakers in a letter urging Director of the National Economic Council Larry Kudlow and President Trump against imposing costly new tariffs that could harm the auto industry. Sewell and others have filed bipartisan legislation to delay auto tariffs by requiring the International Trade Commission (ITC) to conduct a comprehensive study on the economic importance of automotive manufacturing in America before tariffs on automobiles and auto parts could be applied. She is also the lead sponsor of the bipartisan, bicameral Trade Security Act, which would reform Section 232 to increase Congressional oversight in the Section 232 process and reassign national security threat assessments to the Department of Defense. The tariffs would deal a devastating blow to Alabama, where auto manufacturers are a powerful driver of the local economy. Mercedes,
Honda and Hyundai assembly plants have made the state a hub for car and light truck production. According to the Peterson Institute, if auto 232 tariffs were implemented and foreign countries retaliated, 624,000 jobs could be lost in the auto sector. Last but not least are the trade tensions between the U.S. and China, and the impact on the U.S. automotive industry. Last year China increased the tariffs on U.S.-made automobiles entering the country from 15 percent to 40 percent in retaliation to U.S. tariffs. China has since suspended the additional 25 percent tariffs on U.S. vehicles and auto parts as a goodwill gesture. If tensions should flare up again, however, China will likely hit the automobile industry with another
round of tariffs. That again would bring the complicated global automotive supply chain into play. What that means is U.S. producers would spend more on parts from China when they are taxed at a higher rate, which would result in somewhat higher prices for cars for American consumers. n
SUMMER 2019 | Southern Automotive Alliance 31
WORKFORCE DEVELOPMENT
Prepping the Workforce of the Future
Going all in, Motlow State Community College is committing to robotics instruction with the support of several manufacturers.
Middle Tennessee’s Motlow State Community College launches robotics training center TEXT BY: NANCY HENDERSON // PHOTOS BY: MARK GILLILAND
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n a windy day in late April, more than 200 people crowded into the new Automation and Robotics Training Center (ARTC) next to Motlow State Community College and the Tennessee College of Applied Technology in McMinnville, Tennessee, for a chance to check out the brand-new learning labs and hear dignitaries from across the state speak at the much-anticipated grand opening. Yellow, blue and pearl gray robots mounted at eye-level in
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the six high-ceilinged bays grasp the air with tweezer-like fingers as if assembling car parts. “Where we are today started with a need, followed by a vision. The vision today is complete, and the foundation is laid, but the mission has just begun,” ARTC director Larry Flatt told the group. “Over the last year, hundreds of hours have been spent working with the three primary suppliers of robots, and industries in our area, and with our local industry partners. … The
results of those efforts are partnerships that others are trying to emulate entirely throughout the USA.” Unlike colleges that align with a single robot manufacturer, the 12,500-square-foot ARTC provides hands-on instruction in material handling, robotic welding and work cell design for three of the world’s largest: FANUC, Yaskawa-Motoman and ABB, with a pair of work bays dedicated to each company. It also offers two distinct pathways for
learning—a degree program for Motlow students, and certification training for business professionals, both of which prepare workers to design, operate and maintain industrial robots. In addition to the six labs, the center houses five classrooms, five offices for faculty and staff and a conference room that doubles as a community meeting space. The spacious foyer will also be used for trade shows, youth activities and other events. The new center grew out of a team effort by various local and statewide agencies, organizations and businesses that came together to create a robotics training facility that would ensure enough workers to serve the existing industry, spur livable-wage jobs for residents in a rural area and boost economic growth in the region. “There’s a lot of interest and energy in making sure that we have the right workforce at the right place at the right time, and that it benefits the citizens of this state,” says Terri Bryson, Motlow’s vice president of external affairs and workforce innovation. “And in coming together and talking, a fact was revealed that there are more than 7,000 robots already in operation within 70 miles of McMinnville at places like Bridgestone and Nissan. Rather than taking jobs, Motlow State expects robots to help students get a foothold into advanced manufacturing careers.
And then in smaller shops there are industries that support them.” Funding for the ARTC came from a $5.5 million grant awarded to Motlow as part of the Drive to 55 Alliance, a corporate-nonprofit-community effort that seeks to equip 55 percent of Tennesseans with a college degree or certificate by 2025. Still, the project wasn’t an easy sell, Warren County Executive Jimmy Haley told guests at the grand opening. “When we first proposed this program, we got a lot of pushback. A lot of people said, ‘Oh, a little rural community cannot sustain anything like this and pull this off.’ … We know, at the end of the day, that urban centers are going to outpace and outgrow us. But for rural communities, we need something as a resource that will be sustainable. This robotic center will teach us how to fish, and we’re going to be able to expand this pond.” In early May, corporate trainers led the first short-term certification class of about 10 professionals employed at various companies from across the country, including those in California and Texas. (Class size is limited due to a 2-student-per-robot ratio.) The feedback was extremely positive, Bryson says. “People are very, very affirming. They feel like this
There’s a lot of interest and energy in making sure that we have the right workforce at the right place at the right time, and that it benefits the citizens of this state. —Terri Bryson, Motlow vice president of external affairs and workforce innovation.
is a very well-organized, very wellstructured learning environment. They like the layout of the facility. It’s easily accessible. The one thing you hear is there’s not a lot of traffic to get to it, and the cost of travel to this site is less. One industry leader said to us, ‘You know, I have $120,000 that I spend annually on training. Half of that goes to travel. Now a larger percentage of my training budget can go to actual training as opposed to the travel associated with it.’ That was something that we had hoped for, but to hear that right off the bat was wonderful news and affirmation.” Automotive industry leaders from Nissan, Bridgestone and other nearby companies have also pledged their support, Bryson points out. “It’s a tight job market for finding people with the right skills right now. The industry tells us stories of hiring away from each other, and there’s a limited supply of people in these highly-skilled craft roles, what they call new collar jobs.” This fall, Motlow instructors will begin teaching one-on-one, for-credit student courses leading to a traditional SUMMER 2019 | Southern Automotive Alliance 33
There are thousands of robots working within 70 miles of the campus, but not another facility like Motlow State’s for 500 miles in any direction.
A.A.S. degree in Mechatronics with a concentration in Robotics. In addition, automation training will cover such topics as digital systems, sensors, electronics, hydraulics, pneumatics, programming and alarm management. “Motlow actually has a nationally recognized reputation for being an early adopter of mechatronics curricula, so one of Motlow’s niches is mechatronics instruction,” says Bryson, who credits the school’s dean of career readiness and programming, Fred Rascoe, for getting the idea off the ground. “Fred knew that to take mechatronics to the next level, it had to be infused with robotics.” At the April grand opening, Flora Tydings, chancellor of the Tennessee Board of Regents, spoke about the potential impact on students, now and in the future. “Imagine what’s going to happen over the next several months, years, decades,” she said. “We’ve got to 34 | Southern Automotive Alliance | SUMMER 2019
be ready. We’ve got to get our students trained for the jobs that exist today, but also the jobs that will be coming. There is not another facility like this anywhere in southern Tennessee, nor within a 500-mile driving distance.” Jeno Kasa, the director of training at ABB in Detroit, reminded those gathered at the April Motlow event that the current workforce is aging out, leaving deep vacancies in many industries. “We’ve all seen the statistics talking about all the Baby Boomers that are going to be retiring soon, and millions and millions of jobs that are going to open up,” Kasa said. “It’s all true. That’s going to happen, and this facility is going to be paramount to training all of those workers to take the places of those leaving the job market.” He went on to describe a phenomenon he frequently witnessed years ago as a robotics instructor. “The
most interesting and most empowering thing that I saw was the first day when a student would come in the class. They’d sit in the front or they’d sit in the back row, depending on their nature, but they had this look that must be described as fear. They would look scared. They really had no idea what they were getting in for. “By the end of the week, when they had successfully gone through our programs, the lectures and the lab exercises, and I would hand them a certificate of completion, the change was immense. They were happy. They were confident, so it truly was empowering. And that’s what we’ll be able to do through this partnership. We’re going to transform [them] from the day-one, deer-in-the-headlights look to the graduation look, ready to take on the world and succeed.” For more information, see roboticstraining.com. n
SAFETY
Inspections to Target Violators
OSHA Is Coming For Auto Parts Suppliers Who Violate Workplace Safety Rules STORY AND PHOTOS BY: CARLA CALDWELL
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wo weeks before her wedding a 20-year-old woman was crushed to death in a robotic machine at an Alabama plant that stamps metal parts for automobiles manufactured in the state. The assembly line stopped, and Regina Allen Elsea and three co-workers entered a robotic station at the Cusseta, Alabama plant to clear a sensor fault. The robot restarted abruptly, crushing the young woman inside the machine. The tragedy, which occurred in June 2016, could have been prevented if her employers had followed proper safety precautions, the Occupational Safety and Health Administration says in statement released in December of that year. The plant failed to
utilize energy control procedures to prevent machinery from starting during maintenance and servicing and failed to provide safety locks to isolate hazardous energy, among other violations, says OSHA, which levied a combined 23 citations and a total of $2.5 million in fines to the company and two staffing agencies supplying workers to the plant. In September 2018, a worker was killed at a Carrollton, Georgia stamping plant. While setting a metal stamping die to fabricate an automotive part, the worker was struck by the upper die when it fell from the press and crushed his upper body, says OSHA in a statement released shortly after the accident. The company SUMMER 2019 | Southern Automotive Alliance 35
of parts. Caught-in can include strangulation as the result of clothing caught in running machinery and equipment. Crushing can include a worker being crushed by rolling, sliding, or shifting objects, such as semi-trailers and a dock wall. Stuckby is defined by OSHA as injuries produced by forcible contact or impact between the injured person and an object or piece of equipment. The most frequent causes of electrical injuries include lack of ground-fault protection, equipment not used in the manner prescribed and improper use of extension and flexible cords. OSHA wants to increase health and safety awareness within the industry as a whole and encourage employers to voluntarily take steps to correct hazards and achieve compliance with safety and health regulations and practices. The REP Bureau of Labor Statistics data show that in 2017 (the most recent period for which numbers are available), the auto parts supplier industry in Alabama and Georgia had
received four citations and was fined $23,490. OSHA’s ongoing concerns about safety at auto parts suppliers, coupled with the high concentration of parts suppliers in Alabama, Georgia, and Mississippi, prompted the agency to extend, for four years, an inspection order that was in effect for those states Feb. 5, 2018-Feb. 5, 2019. There were other inspection orders reaching back several years. The current inspection period ends Feb. 5, 2023 but could be 36 | Southern Automotive Alliance | SUMMER 2019
extended. Inspections are ongoing. The offices will identify suppliers for inspection and provide compliance assistance. Inspections are expected to take place 30 days after notification letters are mailed to companies, which gives employers time to contact consultants prior to OSHA’s arrival, the agency says. Workers in the industry are exposed to caught-in, crushing, struck-by and electrical hazards due to machinery utilized in the making
Not everyone will be 100 percent fluent in the language spoken at a business. You must communicate safety to everyone. It is the right thing to do. It is really that simple. You have to get it to the top of your priority list. — Rick Walker
SUMMER 2019 | Southern Automotive Alliance 37
You comply because you don’t want your people to get hurt, but if a serious injury occurs, you are inviting OSHA into your plant. Be sure you have good machine guarding and lockout-tagout procedures in place. — William Principe
higher injury and illness rates – 3.6 and 3.5 respectfully per 100 fulltime workers – than private industry nationwide, which had a rate of 2.8 per 100 full-time workers. Citations issued in 2019 in Region 4, include: In May, OSHA issued a combined 22 citations to three companies after a follow-up inspection at a Georgia tire manufacturing plant found what the agency says are safety and health hazards. The companies collectively face more than $500,000 in proposed penalties. One company was cited for exposing employees to fall, struck-by and burn hazards; failing to follow hazardous energy control procedures when employees performed service and maintenance on machinery, and failing to provide machine guarding on equipment. In April, OSHA cited a Mississippi plastics company for exposing employees to amputations. An employee suffered the amputation of four fingers when a mixing machine unexpectedly started. OSHA inspectors say the company failed to require the use of a lockout device and train employees on procedures to control the release of hazardous energy. The company faces more than $159,000 in penalties. 38 | Southern Automotive Alliance | SUMMER 2019
Companies have 15 business days from receipt of a citation and proposed penalties to comply, request an informal conference with an OSHA area director, or contest the findings before the independent Occupational Safety and Health Review Commission. Automotive manufacturer associations in the REP-targeted states are working to educate members about workplace safety and other matters. The Alabama Automotive Manufacturers Association (AAMA) scheduled a workshop in June 2019 to discuss topics including OSHA, safety inspections and human resource topics. The agenda included lawyers who specialize in labor and employment law, as well as occupational safety and health management. In early 2019, the Mississippi Automotive Manufacturers Association hosted an industrial safety seminar that attracted suppliers, OEMs and service companies from throughout the state. The Georgia Automotive Manufacturers Association (GAMA) hosted two sold-out meetings in March and a third in May to provide information about workplace safety. “You must keep employees as safe as possible,” says Rick Walker, president and chief executive officer of GAMA. “You must stop and fix all safety issues. That’s best for everyone. Safety must be top of mind.” Communication of safety information within the plant is highly important,” says Walker, who adds he’s found sources for signage in several languages. “Not everyone will be 100 percent fluent in the language spoken at a business. You must communicate safety to everyone. It is the right thing to do. It is really that simple. You have to get it to the top of your priority list.”
GAMA invited William Principe, a partner at Constangy, Brooks, Smith & Prophete, to speak to association members. Principe focuses his practice on occupational safety and health regulatory issues and works with companies on compliance with OSHA and state safety and health regulations. Before joining the firm, Principe was an attorney with the Occupational Safety and Health Review Commission in Washington, D.C. Inspections can reveal many things, and electrical hazards are frequently “got ya” items, Principe says. Examples include blocked access to a power source; overloaded surge protectors; and extension cords strung arounds columns and over beams and used as permanent wiring. Serious injuries often involve lack of machine guarding and failure to follow OSHA guidelines for lockouttagout, Principe says. Compliance with the lockout-tagout standard protects employees from hazardous energy sources on machines and equipment during service and maintenance. Compliance prevents an estimated 120 fatalities and 50,000 injuries annually, OSHA estimates. The agency also requires that one or more methods of machine guarding be used to protect operators and other employees from hazards, including those created by in-running nip points, rotating parts, and flying chips and sparks. Principe says anyone responsible for plant safety should read OSHA’s compliance directives and then implement them. “You comply because you don’t want your people to get hurt, but if a serious injury occurs you are inviting OSHA into your plant. Be sure you have good machine guarding and lockout-tagout procedures in place.” n
Faces of the Industry
Cruise Control
Brad Newman believes he owes “dream” job to a higher power TEXT BY CARA D. CLARK // PHOTOS BY CHRISTINE PRICHARD
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rom the time he decided to follow in his father’s footsteps, Brad Newman believes he has been on a course plotted by a higher power directly to his role as plant manager of ZF Chassis Systems in Tuscaloosa, Alabama. As a University of Alabama alumnus, the location couldn’t have been more ideal, and his wife was ready to settle
back close to her family. Getting the job was a “dream come true” for the Newman family. “In a million years, I couldn’t have orchestrated a blessing like finding out this position was open,” Newman says. “It was an unbelievable blessing to come here.” Newman’s father, Don Newman, began work in a paper mill and worked his way up to chief operations officer.
In a million years, I couldn’t have orchestrated getting this job. If I had spent all of my resources, efforts and connections to get to the one place I wanted to live and the company I wanted to work with, I couldn’t have made this happen. He became a specialist in start-ups and setting troubled plants right, moving from Texas, where son Brad was born, to South Carolina, to New Zealand, back to South Carolina, Washington, Mississippi and then to Alabama, where Brad finished high school. Newman was determined to follow in his father’s footsteps. “I idolized my father,” Newman said. “That got me interested in operations. My plan was to get my industrial engineering degree with every intention of getting into a manufacturing plant. As soon as I did, I planned to start looking for manufacturing and operations responsibility.” During his senior year, Newman had an opportunity to work on a project at the Harrison Division of General Motors’ Plant, which provided full HVAC assemblies for GM. That led to an opportunity to work for Harrison when he graduated in 1991, and the company offered assistance while he worked on his master’s degree. Newman’s next step was a manufacturing engineering job with Holley Automotive, now BorgWarner, near Oxford, Mississippi. He was engineering supervisor when the plant was reorganized into three different value streams. Newman was selected to be operations manager for one of those streams. Having worked his way into operations, Newman was earning recognition. After turning down an engineering role at GKN Automotive in Sanford, North Carolina, the company called back and made him a production manager instead. SUMMER 2019 / Southern Automotive Alliance 39
F AC E S
O F
T H E
I ND US TRY
From there he became operations manager at Textron Automotive, a move that put him close to “grandparents, aunts, uncles, cousins. It was a really neat opportunity to go with an automotive company close to family,” he says. Newman next served as operations manager at Collins & Aikman in Athens, Tennessee, before taking over a plant in Nashville. That plant was in trouble. “I was 34 or 35 years old, holding a plant manager job in the automotive industry,” Newman says. “I was about to turn around a plant similar to what my dad had always done. He always said, ‘Son, take the hard ones. That’s a real opportunity when you find a company that’s struggling and get it on its feet.’ “I had had the opportunity to run operations, but this was the first time to own all of it. It gave me the chance to prove to myself I could do that.” He succeeded but afterward took a break from industry, working with his brothers opening Legends Outdoor Advantage in Athens, Tennessee. The store sold hunting, fishing and camping equipment. A few years later, though, Newman was looking for a more challenging position. He was reluctant to uproot his high school-aged kids, so Newman took a job learning about commercial operations for Chesapeake Consulting Company. When his son was ready 40 | Southern Automotive Alliance / SUMMER 2019
to graduate, Newman was ready to go back to automotive. “I had been out of the industry for seven years – like a sabbatical,” Newman says. “I needed to prove first I still had it, and I needed to prove it to the industry. I purposefully looked for the most difficult plant I could find. I found it in an extreme situation at Diversified Machine.” The Columbus, Georgia, plant supplied to major Tier Ones like Continental, ZF, Akebono, and Mobis, who in turn supplied to OEMs like Toyota, Hyundai, Mercedes, and Ford. When Newman became plant manager, he knew it was going to be tough, and he worked seven days a week, 14 to 16-hour days, to right the ship. “The parts we made were all safetycritical,” Newman explains. “Without them, these Tier One suppliers could not support OEMs. If this plant failed, it would have a huge impact on the automotive industry,” Newman said. Again, Newman saw a distressed plant operation which was badly in need of a turnaround. “It gave me an unbelievable view back into Tier One automotive,” Newman says. “All of those companies had to come see me to find out what was going on and how to get out of trouble. That allowed me to see the culture of these companies and their teams like I never would have been able to earlier. I
made a mental note that after I saw the plant through the tough times so that it could become stable, I would look for employment with a Tier One. I had seen enough of ZF that I knew the culture fit me, and I made a note to call Kurt Mueller, the boss.” The process of becoming the Tuscaloosa plant manager included a final evaluation with ZF in Germany. When it was over Newman had his dream job and his wife had her dream home, located close to her family in Mississippi where she and Newman had met and dated when they were in seventh grade. He’s certain a divine hand was guiding him all along. “In a million years, I couldn’t have orchestrated getting this job,” Newman says. “If I had spent all of my resources, efforts and connections to get to the one place I wanted to live and the company I wanted to work with, I couldn’t have made this happen. It’s one of the best Tier Ones in the world. It really was God’s plan. I can’t say it any other way because of how it’s come out since.” Newman’s wife understood from the outset that her husband’s career would take them far from home. And at each location, she put down roots and made friends that caused heartache when it was time to move again. But her priority was her husband. “She’s been so supportive and a catalyst for me being successful in my career, for sure,” Newman says. “I know that God didn’t put me here for me.” That’s why, situated in his dream job with the love of his life at his side, Newman strongly believes in helping others. He is personally engaged in prison ministry, as well as in working to help people in underserved areas and giving back to the community. He encourages others at ZF to do the same. “It’s so gratifying to be able to give back,” he says. “It’s incredible to be at this place— having a good job with a good company and seeing the fulfillment you get from that and making a difference in other people’s lives.” n
Supplier Profile This program opens up a world of opportunity. This is a group made up of fine individuals. One thing I’ve learned that is invaluable is how to be a leader among leaders. Everyone has ideas and is a leader in one way. You have to find a way to work where everyone is heard. —Payton Skeens
A True Learner’s Permit ZF Chassis Systems’ unique internship program produces multi-talented young professionals TEXT BY CARA D. CLARK // PHOTOS BY CHRISTINE PRICHARD
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he dated image of the coffeefetching, errand-running college intern has been changing for years, but at ZF Chassis Systems in Tuscaloosa, Alabama, that stereotype has been upended. Management has created a whole new make and model of intern. Thanks to an innovative plan by plant manager Brad Newman, the Tier 1 supplier for Mercedes developed
an Intern and Young Professional program (IYP) that develops personal accountability and responsibility in ways most undergrads don’t encounter until after years on a “real” job. “I don’t know of a professional position that we fill from the outside,” Newman says. “If an intern fits what we need, 100 percent of the time they will get the job. And if we don’t have
something for them, our sister plants want them. We have two interns who went to Greenville, South Carolina to work and have been very successful there. We’re not only improving our talent base locally, but filling positions in other plants with known quantities. Anyone who gets through this program successfully, I will reach out to my peers and put my stamp of approval on them.” With servant leadership as a guiding principle, when Newman joined ZF Chassis as a plant manager, his first step was to evaluate. “When I came here as a plant manager, one thing I noticed was there was no young talent in plant,” Newman says. “That was a hole that needed to be filled.” Newman’s assessment came at a time when ZF was busy with crucial projects, but still he went to key staff and told them he wanted each of them to get an intern. The response across the board was that in a busy launch time, it wasn’t worth the effort to take time away from normal duties to train an intern. Newman told them to get interns anyway. “We started out with a small number, bringing them on by department as we could find them,” he says. “Once we got to a critical mass of six or eight, it gave me the opportunity to do what we try to across the plant — making everything cross-functional. The goal is for them to be exceptional in their positions, but I want them to be exceptional cross-functionally and SUMMER 2019 / Southern Automotive Alliance 41
SU P P LI ER
P R O F I LE
as a team.” That directive generated a camaraderie and team atmosphere among interns, which has helped develop young talent, as well as being a force for good with community and charitable projects. Every five or six weeks, the interns make a presentation to staff that, to an outsider, would seem as if they were recounting their annual accomplishments. In fact, they do more in the span of a few weeks at ZF than many would do over a 52-week period. As the interns work together, holding one another accountable, they have upped the ante on vetting potential candidates for the program. At ZF, functional leaders and their teams interview interns who want to join the company, but the IYPs also examine them to ensure a good fit with the team and company culture. “After that, we sit down as a group and the IYPs discuss the pros and cons of each,” Newman says. “The functional manager decides, but if they liked candidate A and Candidate B 42 | Southern Automotive Alliance / SUMMER 2019
was chosen, the team understands the cons they listed are their ‘to do’ for that intern when they arrive. They know it’s their job to make sure the individual is successful and realize that person’s challenges and weaknesses when they come in.” Payton Skeens, an account management intern for sales and student at the University of Alabama, joined the team in January 2018. She had heard about ZF’s reputation as a company from a professor. Not knowing about the awardwinning IYP program, becoming part of such a team was an eye-widening experience for Skeens, who is scheduled to graduate in operations management in May 2020. Now, she’s an old pro, interfacing with customer service at Mercedes-Benz, inputting prices, tracking overtime, creating downtime reports and preparing quotes for test parts. And that’s just part of her regular work schedule. In addition, ZF interns are active in community outreach and community service, along with the approximately
18 other young people on the team, a fluctuating number depending on the time of year. Most students work part time when they’re in school, then go fulltime in summer. “We’re a B2B company, so our IYP group does a lot to spread the company name because a lot of people haven’t heard of us,” Skeens says. “If a member of IYP has an idea for a service project, we talk about it as a group. We want to be sure we don’t get into something we aren’t going to do our best at. We want to go above expectation on every project we do.” Those efforts include adopting a middle school and a high school, monthly soup kitchen volunteering, quarterly Habitat for Humanity build projects, working with the elderly and more. Every intern and young professional in the organization is expected to contribute. “One of the group’s functions is to be sure we are engaged in the community,” Skeens says. “Our other goal is to develop each other professionally and personally. After starting our internship, we have the opportunity to work until we graduate. When we graduate, there’s a lot of opportunity to work here or another other location. The goal is to be sure [we are] prepared to go work full time.” According to Skeens, 60 percent of interns have been hired by ZF, while others have moved on with another automotive supplier or to attend graduate school. “This program opens up a world of opportunity,” says Skeens. “This is a group made up of fine individuals. One thing I’ve learned that is invaluable is how to be a leader among leaders. Everyone has ideas and is a leader in one way. You have to find a way to work where everyone is heard.” A big part of their role is holding one another accountable. IYP participants meet weekly, access information through shared folders, document attendance, and keep in contact through Group Me on their phones. Skeens says many students
choose to co-op, which delays their graduation, but it does give them valuable work experience. By joining ZF, she is gaining experience working in a global company with employees from all over the world while staying on track for graduation. “My major offers co-op opportunities, but the difference for me is I’ll have two and a half years work experience, and I don’t have to delay graduation,” she says. “Through this specific program, you really learn a work, school, life balance. You’re going to class and work and trying to fit everything in. You learn time management skills, and you’re really prepared after interning here. We are part of the culture of ZF.” Newman finds it hard to contain his pride in the success of the program. “I would like to meet an internship program more effective than this one,” Newman says. “I’ve run out of ways to make them more effective. I have a high level of expectation, but they
I would like to meet an internship program more effective than this one. I’ve run out of ways to make them more effective. I have a high level of expectation, but they exceed it every time. It’s incredible what this group has done developing their own processes with onboarding new interns and managing themselves. If someone is not pulling their weight, the group figures out how to help them do that. It’s a self-managed organization that has accountability and is responsible for updating staff about the responsibility they have been given. —Brad Newman
exceed it every time. It’s incredible what this group has done developing their own processes with onboarding new interns and managing themselves. If someone is not pulling their weight, the group figures out how to help them do that. It’s a self-managed organization that has accountability and is responsible for updating staff about the responsibility they have been given.” While the internship breakthrough is Newman’s brainchild, he wants to see other firms follow the same model to the benefit of their operations.
Interns can be valuable to a company and a community. “I don’t take pride of authorship over this program,” he says. “I appreciate the opportunity to share this idea and to be in a position that I can positively impact so many folks. Every decision I make, I first consider what’s best for the team for the long haul, rather than what’s best for me. Instead of saying ‘I’m Brad, and 450 people work for me,’ I say I work for 450 people. I’ve read a lot of leadership books and studied a lot of great leadership. It all comes back to leading and being humble.” n
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SP OT LI GH T
MAN VS. MACHINE VS. NATURE
At Red Clay Rally, a competitive event catering to overlanders, a maturing community of off-roading enthusiasts may provide a roadmap for future truck and SUV markets. STORY AND PHOTOS BY: HENRI HOLLIS
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n a damp Friday morning, the last one in May, a long line of trucks was forming in the parking lot of the Borla Exhaust facilities in Johnson City, Tennessee. Every two minutes, several trucks at the front of the queue would roar off on fat, knobby tires. Though they accelerated quickly, maybe even chirping their tires for the benefit of several dozen onlookers, they settled into a comfortable pace at the speed limit as they reached the public
44 | Southern Automotive Alliance / SUMMER 2019
road a few hundred yards away. “Thirty seconds,” says Zack Smith, the event’s organizer, splitting his attention between the next team and his stopwatch. “Three, two, one... GO.” After his countdown to the second, another short train of mismatched trucks and SUVs lunges out of the parking lot. This event isn’t a race, per se. It’s the beginning of the Red Clay Rally, a 600-mile, three-day off-road driving challenge that has grown up around one
of the most powerful recent trends in the consumer car market: overlanding. At this point, overlanding has graduated from a trend to a subculture. The most basic explanation of overlanding is that it’s car camping, but the car is expected to take the camper off the grid. So overland vehicles, often referred to as rigs, need to be rugged and capable enough to take multiple people over rough, unpaved terrain. Because of this, they also tend to be large; a typical overland platform is a full-sized SUV or
truck that comes from the factory with the ride height and payload capacity to transport a few creature comforts over rocky trails. Interest in overlanding has grown steadily since 2015. Anecdotally, many in the community point to the explosion of Instagram as a major factor in the trend’s growth. Instagram expanded beyond the iPhone in 2013 and hit 300 million monthly active users in December 2014. The correlation makes sense: overland rigs are usually photographed in spectacular natural locations. They also tend to look good on their own in pictures, with aggressive stances, large tires and lots of interesting
accessories that bring the comforts of home outdoors. Through the filter of Instagram, overlanding combines the beauty of nature, ruggedness of offroading and the luxury of glamping in a single, tidy package. “I got into it at the right time,” said Smith. Organizing Red Clay Rally is not his primary job, nor was it ever part of his plans. He is a police officer from northeast Tennessee who started the @ overland_tennessee Instagram account in 2015 - an account that has more than 11,000 followers today. “I had people ask me to start something like an overlanding meetup, but I wanted it to be something a little
more exciting,” said Smith, explaining the genesis of the rally. He made a website with low expectations, but after a single day, 35 people signed up for the first edition of Red Clay Rally in 2017. “Okay, I guess we’re actually doing this,” said Smith. Car manufacturers have taken notice of the growing interest in overlanding and begun to offer models that appeal directly to the overlanding subculture. Ford has reintroduced the Ranger, a midsized truck with a marketing campaign centered squarely on the idea of adventure, and with plenty of visual cues that nod towards overlanding. Chevrolet has the Colorado ZR2 Bison, which is essentially a factory-built overland rig developed in partnership with American Expedition Vehicles (AEV) and based on GM’s midsize pickup platform. It rolls off the production line with front- and rearlocking differentials, boron steel skid plates and highly advanced Multimatic DSSV shocks. “The Multimatic DSSV shocks are a first for us in the off-road environment,” said GM engineer Todd Hubbard, a chassis and suspension specialist who was heavily involved in the Bison program as the Chevrolet Trucks Vehicle Performance Engineer. “We think Multimatic is a pretty cool company; they do a lot of work with Formula 1 and high-end sports cars like
SUMMER 2019 / Southern Automotive Alliance 45
P A N OZ
SPOT L IG HT
This new generation is tired of watching other people have fun. They’re not interested in going to a NASCAR race and watching other people have a good time. I think that’s a big part of overlanding’s appeal. —Zack Smith
MacLaren. Our first exposure to them was on a previous generation of the Camaro; there was a Track Edition Z28.” An engineer who was the technical owner of shock absorbers on that project, and later became involved with the Bison, was able to put two and two together. “We realized we could leverage Multimatic to create a shock specifically built for off-road rigors,” said Hubbard. “And we couldn’t be happier with the advanced capabilities that they’ve 46 | Southern Automotive Alliance / SUMMER 2019
designed into that shock.” Ford and GM, however, are playing catchup to a couple of brands that have dominated the overlanding market thus far. Toyota’s off-road models, the Tacoma TRD Pro and the 4Runner TRD Pro, are popular platforms that are considered overland-capable out of the box and already have huge accessory markets. Older Toyotas are popular as well; the Landcruiser has a cult following thanks to its legacy of both luxury and durability.
Jeep is the other major player in the overland market. With the Wrangler’s off-road bonafides and a vast accessory aftermarket, the venerable SUV has a subculture in its own right. In terms of single vehicle models represented, the Jeep Wrangler was easily the most popular platform at Red Clay Rally. Though overlanding is generally seen as an activity for a single vehicle or a small group, events like Red Clay Rally are evidence of the subculture’s growing popularity. Though it’s not a race, the rally isn’t a vacation, either. It’s a time-speed-distance challenge in which teams try to match a certain pace between checkpoints while navigating some of the Appalachian Mountains’ most treacherous terrain. Points are awarded for arriving at checkpoints either early or late and, just like in golf, the team with the lowest score wins. Checkpoints are set in surprise locations, making it unwise for teams to deviate from the route. Missing a checkpoint means certain relegation to the end of the pack. The 600-mile route includes more than 120 miles off-road, and each day requires six to nine hours of seat time. Trenton Munsell, a mechanical engineer from Georgia, and his nine-
year-old son Desmond completed Red Clay Rally in their 1998 Jeep Wrangler Sport. In the weeks prior to the event, they spent hours working on the Jeep, which had mostly sat in a driveway for the past five years. “Going on adventures with my kids is important,” said Munsell. “We’re not really a ‘go to the beach and sit around, go stay in hotel rooms’ kind of family. This was the perfect thing for us to do together.” While there is a competitive aspect to Red Clay Rally, most participants viewed the event as a chance to test their vehicles and use their gear. They could hobnob with other enthusiasts, check out interesting builds, improve their driving skills and navigate new trails. Along the way, there’s friendly banter, plenty of helping hands and generous sharing of beers around evening campsites. As with any car subculture, some people build their cars purely for show, and the overland community is quick to sneer at rigs with near-six-figure price tags that lack the tell-tale pinstripes earned on the trail. While popular overlanding Instagrams might boast tens of thousands of followers, accounts like @overland_memes on Instagram
SUMMER 2019 / Southern Automotive Alliance 47
SP OTLI GH T
poke fun at expensive rigs whose drivers appear to prefer hotel rooms over rooftop popup tents. Those images resonate with overland enthusiasts because they touch on the unspoken, elitist side of the movement: overlanding is much more accessible to the wealthy. New vehicles with high-level trim packages like the Chevrolet Colorado ZR2 Bison and the Toyota 4Runner TRD Pro cost around $50,000. Toyota Landcruisers or any of Land Rover’s models are significantly more expensive still. Even Jeep Wrangler models, when fully outfitted, can cost nearly $60,000. Then, there’s an expectation that overlanders will sink additional thousands of dollars into their rigs’ suspensions, wheels, tires and often their engines. After that, there is no shortage of multi-thousand dollar accessories to be bolted on, from winches to refrigerators to rooftop popup tents complete with memory foam mattresses. The expensive rigs might fetch more likes on Instagram, but at events like Red Clay Rally, there are vehicles 48 | Southern Automotive Alliance / SUMMER 2019
from the full spectrum of possible overlanding platforms. Yes, there were Jeeps that appeared to cost $80,000 with custom-built suspensions and 40-inch tires, not to mention quite a few Land Rovers and Landcruisers with custom paint jobs. But there were also mid-90’s Ford trucks, restored Toyota FJ40s and inexpensive Nissan Frontiers. Those vehicles were often hand-outfitted by their owners, and many rally participants relished the opportunity to work on their vehicles in the field. Lucas Smith, a mechanical engineer originally from Virginia, ran the rally in his 1994 Ford F-150 - one of the few full-sized trucks at the event, and one of the oldest. He bought the truck in 2014 as a sophomore in college. It was already equipped with a few off-road modifications, but he’s put many hours of work into it himself. “I did a solid axle swap on it this past year,” said Smith. It would be a major project for anyone, but Smith didn’t exactly grow up in a mechanic’s garage. “I haven’t always known how to do this stuff. I learned a lot about working
on trucks in college when I was in an offroad club,” said Smith. “And I learned a lot from YouTube. I also bought one of those Chilton Repair Manuals for my truck, and I’ve marked it up with notes and highlighter. It’s probably in the truck right now.” The Big Old Red Ford, as it is known on Instagram, completed the rally without incident. It now has 225,000 miles on it, and Smith estimates he’s put at least 45,000 of those miles on it himself. “That truck was definitely a fanfavorite,” commented Zack Smith, the event organizer. Lucas Smith’s team, which hosted me for the rally, did plenty of work along the trail as well. They welded a Ford Explorer’s broken sway bar mount at our campsite one night and replaced Munsell’s Jeep’s brake caliper in a gas station parking lot in about 30 minutes. Self-reliance is an important, but understated, aspect of the subculture. Overlanders tend to be extreme DIYers who respect hard work, cherish their vehicles and genuinely enjoy nature.
Within that range of interests, vehicle manufacturers may find a good entry point for hybrid and electric truck platforms. Until recently, electrified pickup trucks have struggled to get traction among OEMs, though that appears to be changing with Ford’s investment in the electric vehicle manufacturer Rivian and Tesla’s announcement of a pickup truck model. According to Hubbard, the GM engineer, this possibility has not escaped his company. “We did a demonstration vehicle for the military called the ZH2 that was … essentially a Chevy Colorado ZR2 with a hydrogen fuel cell and 37-inch tires,” said Hubbard. “It was really interesting because one of the byproducts of the fuel cell is pure water. Wouldn’t that be cool, if you could capture that water and be really self-sufficient?” Hubbard, who is an avid mountain biker, also noted that the ZH2 was basically silent.
We’re not really a ‘go to the beach and sit around, go stay in hotel rooms’ kind of family. This was the perfect thing for us to do together. —Trenton Munsell “I’ve always thought,” said Hubbard, “What could be cooler than driving through the woods completely silent? That would be a surreal experience.” At the end of Red Clay Rally, 19 teams out of 31 officially completed the grueling challenge. Beers were shared at Country Boy Brewing at the terminus of the route while awards were passed around. One driver who had chain-sawed a fallen tree across the trail received the sportsmanship award, while another team collected a nice package of prizes for collecting the most trash along the trail. Trophies and prizes worth thousands of dollars went to the
teams that placed first, second and third. “This new generation is tired of watching other people have fun,” said Zack Smith. “They’re not interested in going to a NASCAR race and watching other people have a good time. I think that’s a big part of overlanding’s appeal.” As weary teams dispersed to their myriad trucks, all caked in mud and bearing plenty of new battle scars, the rally was officially over. Several teams had already begun to talk about returning to the event in 2020. “We have a guy who celebrated his 70th birthday on Red Clay Rally this year,” said Smith. “And he wants to come back next year for 71.” After the experience of so much adventure, fellowship and enjoying the genuine natural wonders of the remote Appalachians, it was easy to understand how this trend had formed such a strong subculture. Red Clay Rally might have been over, but the overlanding movement is still just getting started. n
SUMMER 2019 / Southern Automotive Alliance 49
SAFETY
B.R.A.K.E.S. Accelerates Teen Driver Safety Training The program created by NHRA drag racer Doug Herbert prioritizes practical driving instruction over scary statistics. STORY AND PHOTOS BY: HENRI HOLLIS
I
n an events center in Hampton, Georgia, on a dreary spring Saturday morning, dozens of teenagers stare at the floor while their parents make small talk around them. It’s before 8:00 a.m. and the mood in this ballroomturned-classroom is glum, despite the cheeriness of the uniformed volunteers checking folks in. The group is about to begin a driving safety course, and the adolescents in the room aren’t exactly on the edges of their seats. The presentation begins promptly at the top of the hour, and it starts with a terribly sad story that even the teenagers in the room can’t ignore. It’s followed by some sobering statistics - more teens die every day from car crashes than from cancer, homicide and suicide - and some actionable driving tips. Then, the lights
50 | Southern Automotive Alliance / SUMMER 2019
click on; everyone seems surprised. The class is over in a tight 30 minutes. It’s time to move on to the practical portion of the course - driving real cars accompanied by professional drivers. Many of the teenage attendees have a noticeable spring in their step as they walk out of the classroom and into the shadow of Atlanta Motor Speedway, the massive racetrack that hosts an annual 500-mile NASCAR race. The beauty of the B.R.A.K.E.S. program is found in that balance: a brief half hour of classroom time gives way to several hours actually spent behind the wheel. Rather than bludgeoning teenagers with scary statistics that can feel abstract and detached, students have the opportunity to see how a car feels when it loses control. It’s visceral
and impactful; these teenage drivers are developing real-life skills that could help them navigate situations that nearly all drivers will face at some point in their lives. “I liked that it wasn’t all classroom time, but we did get a little instruction so we weren’t clueless about the driving part,” said John Valduga, a 15-year old student driver from Augusta, GA. B.R.A.K.E.S., an acronym for “Be Responsible and Keep Everyone Safe,” is the brainchild of NHRA drag racer Doug Herbert, who suffered the unfathomable loss of sons Jon and James to a single car wreck in 2008. He channeled his grief and driving skill into teaching other teenagers how to be more confident and conscientious drivers. He began by teaching his sons’
SUMMER 2019 / Southern Automotive Alliance 51
friends and, over the course of more than 10 years, has grown B.R.A.K.E.S. into a nationwide program. The program, which is offered to families for free (though B.R.A.K.E.S. does solicit donations), puts on weekend seminars at NASCAR tracks and fairgrounds, bringing along their own fleet of instructional vehicles. Just outside the Earnhardt grandstand at Atlanta Motor Speedway, the fleet of instructional vehicles donated by KIA is neatly arranged in a large parking lot. The cars are segmented into smaller groups that will rotate through a variety of obstacles meant to mimic real-life driving situations. These include a slalom exercise for collision avoidance, a panic braking drill and a drop-wheel exercise for off-road recovery. In the classroom, the group learned that dropped wheels, or driving off of the road surface (usually due to distracted driving), is by far the most common cause of singlecar wrecks. There is even a group of cars outfitted with plastic tires that have almost no grip, approximating the loss of control experienced on wet or icy roadways. “The driving was fun, especially the drifting part where you spun out,” said Valduga. “We also got to drive with the drunk goggles on,” he said, referring to the alcohol impairment vision goggles used in one of the challenges. Parents are included, too. A few cars are reserved for parents to try their hand at some of the driving drills, and 52 | Southern Automotive Alliance / SUMMER 2019
a representative from the local KIA dealership is right there in case anyone decides they’d like to drive home in a new car (or buy one for their kid). Many of the parents are excited about the opportunity the B.R.A.K.E.S. program is giving their kids. John’s parents, Billy and Lisa, brought him to the program from Augusta, Georgia, a little less than three hours away from Atlanta Motor Speedway. The younger Valduga still has a learner’s permit that limits him to driving only with an adult in the car in Georgia, but his dad appreciates the opportunity for him to learn from a professional instructor. Valduga, an insurance agent for State Farm, is especially aware of the risks inherent to driving. “Any time you can get two or three hours behind the wheel, even if you’re rotating out the drivers, it’s amazing,”
said the elder Valduga, who was watching his son’s vehicle from the edge of the tarmac. “It’s unique; the high-speed maneuvering, where you don’t have to worry about hurting yourself or someone else - it’s great. You put yourself in a situation that’s uncomfortable so that when you see it again, you become comfortable.” It also helps that the course technically costs nothing, though the reality is a little more complicated. Families make a $99 deposit in order to register their teenagers for the program, a tactic that helps reduce the number of no-shows that could throw off the three-to-one student-instructor ratio. At the end of the course, they can choose to have their deposit refunded or allow the B.R.A.K.E.S. organization to keep it as a donation since it’s a 501(c)3 nonprofit. Verduga and other parents said they felt the course was well worth their $99 donation. In addition to accepting donations, B.R.A.K.E.S. has a wealth of corporate sponsors, from OEMs like KIA and Tier 1 suppliers like DENSO to local highway patrols and car insurers. All that support makes for an impressive setup that helps keep the teenage students’ attention. The fleet of instructional vehicles are all nearly-new KIAs in a variety of colors, and there’s a hospitality tent with snacks, coffee and chairs for the parents. There’s even a parked semi-truck
provided by a local FedEx hub with experienced drivers on hand. Real cars have been placed in blind spots on either side so that parents and students can see exactly what a truck driver on the highway would see. It’s a good reminder that driver safety extends beyond the driver’s own cockpit; interpreting different driving scenarios is much easier when you understand the perspectives of other drivers. As the morning winds down, the cars that were previously skidding, sliding and screeching over the expanse parking lot are noticeably more controlled. Even the cars with the plastic rear tires resist swinging into a full spin. “I did get it after a few tries,” said John Valduga. “The cars were fun; we had the traction control turned off.” At this point, every student has completed each of the five driving challenges and received personal, professional instruction for how to navigate them. The entire group heads back to the classroom for a debrief, and the teenagers appear decidedly more chipper than they had at 8:00 a.m. Maybe that’s because they’ve had the chance to wake up, or because the weather has cleared over the course of the morning. Or maybe it’s because they’ve had a thrilling few hours behind the wheel, expanding their comfort zones with the help of professional drivers. Maybe they’re excited to have learned a few new practical skills. You can never tell with teenagers. n
SUMMER 2019 / Southern Automotive Alliance 53
EXHIBITOR PROFILES: ENGINES OF SAC2019
H
gives the industry a collective boost. Making the most of the SAC2019 experience this September promotes contact within the industry, building upon existing relationships and producing new connections. Look for these exhibitors in Nashville September 25th-27th at the 2019 Southern Automotive Conference, or contact them today to get your business engine started. To participate in Southern Automotive Alliance programs like Exhibitor Profiles, contact:
ow exciting that another Southern Automotive Conference is right around the corner! The American South continues to be the most productive region for automotive Industry in the world, and while Southern Automotive Alliance brings this community together here and in your inbox, the importance of raising all ships with the tide of our annual regional event cannot be overstated. With SAC2019 excitement growing, Southern Automotive Alliance would like to recognize two companies that are consistently involved in the South’s key automotive conference. The featured companies are beyond worthy of their accolades, and participating as conference exhibitors
SAC EXHIBITOR PROFILE 2019
Chandler Busby • Southern Automotive Alliance Magazine 205.915.9741 • cbusby@pmtpublishing.com
2
019 marks S-2international’s 15th year of Service Delivered with Heart. Founded by Jennifer
Mead, S-2 has built a strong reputation for service
excellence as a premier, single-source transportation management company.
Not only is S-2 celebrating 15-years of service, but also
its recent recognition as a “Top Women-Owned Business in Transportation” by Women in Trucking (WIT).
S-2 provides transportation management solutions
across multiple modes, specializing in the management of time and service sensitive ground shipping solutions.
operations@S-2international.com 395 McDonough Parkway | McDonough, GA 30253 Tel (678) 432-9502 Ext 105 | Fax (866) 303-0432 SAC 2019 s o uth e r n au to m ot i v e c o n f e r e nc e
54 | Southern Automotive Alliance / SUMMER 2019
SAC EXHIBITOR PROFILE 2019
N
SAC 2019 AOS On-Site Staffing is a certified
southe rn autom oti v e c on fe r ence clients’ communities.
operated business specializing in on-site
sponsored SAC and this year we are thrilled to
automotive industry. For over 35 years, NAOS
Seed in Nashville. We are hosting a Scavenger
woman-owned (WBE), family-owned and
management of contingent workforces for the provides knowledge, tenure and experience to automotive OEMs and their Tier 1 and Tier 2 suppliers in order to create a streamlined,
productive workforce. Our dedicated approach
ensures that we always provide the best possible
candidates for our clients, sourced from within our
For the past 5 years, NAOS has proudly
sponsor the Thursday Gala at the Acme Feed & Hunt that includes lots of fun clues on how to
uncover and collect items at locations throughout the conference. The hunt culminates on Thursday and winners are announced at the Gala. Prizes are given to the first attendees to complete the Scavenger Hunt!
6455 E. Johns Crossing, Suite 425 Duluth, GA 30097 Phone: 678-387-2880 Email: sales@naosstaffing.com Website: www.naosstaffing.com
REGIONAL REPORTS The Georgia Automotive Manufacturers Association, Inc. (GAMA) is a non-profit trade association which passionately promotes the interests of Georgia’s automotive and ground transportation industry. GAMA is a community of businesses with common interests and goals which provides a highly interactive forum to help members achieve the following: • continual improvement in their businesses • higher levels of innovation, quality, and profitability
• professional success through unique educational opportunities • successful networking among customers and peers
will be the eighth time Mr. Strauss has addressed GAMA members and guests. Mr. Strauss’ information is always extremely relevant and timely, and includes his views on the economy in general, manufacturing in general, and, of course, the automotive industry in particular. The meeting is timed to fit well with most companies’ annual budget planning processes. Additional speakers are planned.
GAMA is off to a very successful start for 2019, and has already confirmed events in 2020:
Events held so far this year include: • MARCH 12, 2019 - “Critical Issues Regarding OSHA” – held in West Point, GA/Lanett, AL near the Kia assembly plant in West Point, Georgia. • MAY 22, 2019 - “Critical Issues Regarding OSHA” – held in Rome, Georgia. • MAY 7, 2019 – Annual Golf Tournament Benefiting the Southern Automotive Women’s Forum (SAWF) – held at Callaway Gardens in Pine Mountain, Georgia (near Columbus, Georgia).
• FEBRUARY 5, 2020 – Cybersecurity and the Supply Chain, featuring AIAG – Alpharetta, Georgia
Upcoming events planned:
•
• AUGUST 6, 2019 – Annual Plant Tour – Kia Motors Manufacturing Georgia (KMMG) assembly plant in West Point, Georgia. • NOVEMBER 13, 2019 – Annual Economic Update/ Technology Meeting featuring Bill Strauss, Senior Economist and Economic Advisor, from the U.S. Federal Reserve Bank. This
APRIL 28, 2020 – Annual Golf Tournament Benefiting the Southern Automotive Women’s Forum (SAWF) - will be held at Callaway Gardens in Pine Mountain, Georgia. GAMA is committed to delivering value-driven events year-round.
For further information, please contact Rick Walker, GAMA President, at rwalker@GAMA-Georgia.org or 770-314-9040.
SUMMER 2019 / Southern Automotive Alliance 57
REGIONAL REPORTS
Alabama Automotive Manufacturers Association
AAMA’S MISSION is to promote growth and continuous improvement of automotive manufacturing in Alabama.
ALAUTOINDUSTRY.ORG
GET MORE MILEAGE WITH AAMA MEMBERSHIP! AAMA HELPS YOU BE COMPETITIVE. Work with statewide partners who represent your interests to further job creation and develop a promanufacturing economy.
AAMA HELPS YOU CONNECT.
Get connected to the people, programs, information and resources that can help you improve your business and grow your team.
AAMA KEEPS YOU INFORMED.
AAMA delivers events, newsletters and training opportunities focused on the issues that have the greatest impact to Alabama’s automotive manufacturers and suppliers. Gain access to the biannual survey of the automotive industry in Alabama, the AAMA “members-only” website, and Southern Automotive Alliance magazine.
AAMA SAVES YOU MONEY.
AAMA’s efforts focus on eliminating unnecessary cost burdens while low cost training programs are offered to AAMA members through ATN, AIDT, Alabama Community Colleges and Universities. You can also request a plant assessment or training program within your facility.
AAMA GIVES BACK. AAMA awards
scholarships annually to students enrolled in automotive manufacturing programs at Alabama’s two-year colleges. Members can participate in the AAMA Supplier of the Year Award with our partner, the Business Council of Alabama (BCA).
AAMA LETS YOU ENGAGE.
AAMA’s Corporate Partners and Board Members are among Alabama’s most respected thought-leaders for our industry. Active AAMA members can work alongside these automotive icons to make a difference for our state and industry.
BENEFITS OF AAMA MEMBERSHIP INCLUDE: • Business networking opportunities • Leadership opportunities • Sharing of manufacturing best practices • Information on issues impacting the industry • Information on advances in technology and continuous improvement • Access to internet database of Alabama automotive-related companies • Listing on AAMA website • Members Directory • Promotional opportunities for company news • Factory floor assessments (participating companies are eligible for AAMA Supplier of the Year Award) • Member discounts for training • Membership to AIAG • Membership to BCA • Invitation to annual Appreciation Dinner
Join AAMA today! Start now taking part in Alabama’s dynamic automotive manufacturing association. If you are interested in learning more about AAMA and how you can help advance Alabama’s automotive industry, please visit ALAutoIndustry.org. Contact: Madison Bosc | 205.201.8682 madisonaama@gmail.com, Ron Davis | 205.657.5101
REGIONAL REPORTS TAMA helps Tennessee automotive companies, especially suppliers, react to the challenges of the global automotive marketplace. TAMA is a membership organization with a mission to strengthen and expand Tennessee’s automotive industry. TAMA’s diverse membership includes OEMs, Tier 1, 2, and 3 suppliers, government agencies, and professional service organizations that have expertise in the automotive industry. Members enjoy access to some of Tennessee’s top automotive executives, strong support from the state’s economic development team, and discounted fees to membership meetings and other TAMA events.
TA M A’ S ANN U A L S P ON S OR S
TAMA is a proud sponsor of the Aluminum USA Aluminum Expo
MUSIC CITY CENTER NASHVILLE, TN USA SEPTEMBER 12-13, 2019
ALUMINUM USA is the leading exhibition and technical conference for aluminum products, technologies and investments in the United States. Bringing the industry together every two years, ALUMINUM USA is the place to be to get a comprehensive overview of the entire aluminum industry.
TAMA 2019 BOARD OF DIRECTORS President, Rick Youngblood, Nissan North America Vice President, Daniel Davidson, Calsonic Kansei North America, Inc. Treasurer, Jim Leyhew, Kasai North America, Inc. Dex Battista, Magna International Luca Bovalino, Magneti Marelli Ed Carter, C&S Plastics
Andre Gist, Manufacturers Industrial Group Lynda Hill, Frost Brown Todd Victoria Hirschberg, TN Dept. of Economic & Community Development Barry Owens, Bridgestone Americas, Inc. Marius Sipos, YAPP USA Automotive Systems, Inc. Kim Williams, Tenneco
To join TAMA, visit www.tennauto.org. For questions about membership, contact Ashley Frye 615-525-4533 email: ashley@tennauto.org 60 | Southern Automotive Alliance / SUMMER 2019
SUMMER 2019 / Southern Automotive Alliance 61
I N D U S T R Y I N D I C AT O R S
Southern Utilities If you think you see a lot of SUVs and CUVs on the road, you’re not imagining things. That segment of vehicles made up almost half off all car sales in most southern states in 2018 according to Auto Alliance.com.
Southeast Auto Stocks Company/Security
Headquarters
Southeast U.S. Operations
Ticker
Exchange
Closing Price 6/14/2019
Closing Price Stock Price Growth 6/15/2018
BMW
Munchen, Germany
SC
BMWYY
OTC
23.37
33.305
i -29.83
Ford Motor Co.
Dearborn, Michigan
KY
F
NYSE
9.98
11.88
i -15.99
General Motors Co.
Detroit, Michigan
KY, TN, TX
GM
NYSE
35.66
43.91
i -18.79
Honda Motor Co. Ltd.
Minato, Tokyo, Japan
AL, SC
HMC
NYSE
25.34
31.82
i -20.36
Hyundai Motor Co. Ltd.
Seoul, South Korea
AL
HYMLF
OTC
89
120
-25.83
Kia Motors Corp.
Seoul, South Korea
GA
KIMTF
OTC
30.3
30.3
0.00
Mazda Motor Corp.
Hiroshima, Japan
AL
MZDAF
OTC
10.32
12.7232
i -18.89
Mercedes-Benz (Daimler AG)
Stuttgart,, Germany
AL, GA, SC
DDAIF
OTC
53.19
72.57
i -26.71
Mitsubishi Motors Corp.
Minato, Tokyo, Japan
KY
MMTOF
OTC
4.6
7.96
i -42.21
Nissan Motor Co. Ltd.
Nishi-ku, Yokohama, Japan
MS, TN
NSANF
OTC
6.99
9.88
i -29.25
Porsche Automobile Pfd.
Stuttgart, , Germany
GA
POAHF
OTC
63.48
71.39
i -11.08
Toyota Motor Corp. Ltd. Ord.
Toyota, Aichi, Japan
AL, KY, MS, TX
TM
NYSE
124.39
135.81
i -8.41
Volkswagen Ag Ord.
Wolfsburg, Germany
TN
VLKAF
OTC
162.11
186.35
i -13.01
Volvo AB ADR
Gothenburg, Sweden
S.C.
VLVLY
OTC
14.79
16.79
i -11.91
62 | Southern Automotive Alliance / SUMMER 2019
BY T H E N U M B E R S
4.4% 254 Number of Volvo S60 vehicles distributed during the last two months of 2018, after being produced at the company’s facility near Ridgeville, S.C. postandcourier.com
1919 Year when the first “Anderson” vehicle was produced in Rock Hill, S.C., which was the first successful automobile in the Southeastern U.S. greenvilleonline.com
1,000 Number of additional workers anticipated to be hired by Volkswagen in connection with production of the company’s first electric vehicle at its Chattanooga, Tenn. plant. tennesseean.com
Proportion of Mississippi’s workforce employed by the automotive industry as of 2017. autoalliance.org
$6+
$100
MILLION Investment planned by auto supplier Hitachi Automotive Systems Americas to expand its operations in Walton County, Ga. apnews.com
$1.5
MILLION MILLION Investment planned by Germanybased Wagner Turning in connection with the relocation of a parts plant from California to Kilgore, Tex. southernautocorridor.com
Investment planned by auto components supplier Piston Automotive, L.L.C. to expand its Louisville, Ky. operations. kyautoindustry.com
$1
$300
BILLION
Investment planned by General Motors in connection with production of the Cadillac XT6 at the company’s Spring Hill, Tenn. plant. tennesseean.com
Investment planned in connection with production of electric vehicles at Mercedes-Benz U.S. International in Vance, Ala. autonews.com
MILLION
SUMMER 2019 / Southern Automotive Alliance 63
KUDOS
Closing The Literacy Gap In Texas And Beyond
Ford Fund and First Book expand partnership to advance student success with a focus on STEAM skills, an effort championed by Elena Ford TEXT BY LAWRENCE ELIZABETH KNOX // PHOTOS COURTESY OF FORD
I
lliteracy has far-reaching consequences, including poverty and unemployment, all detrimental to the success of the global economy. The automotive industry is not immune, which led the Ford Motor Company to work toward a remedy. In March, the automaker’s philanthropic Ford Fund announced a new collaborative initiative with First Book, a nonprofit that provides learning essentials to children in need, to improve access to quality education. Championed by Elena Ford, the automaker’s chief customer experience officer – and Henry Ford’s greatgreat granddaughter— the program will promote literacy while focusing on STEAM (science, technology, engineering, arts and mathematics). “Literacy is the base for everything,
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especially in education,” says Joe Avila, who has worked for the Ford Fund since 2011. “We know education opens doors to opportunities for the kid that doesn’t know how to read very well.” As community development manager, Avila oversees Ford Driving Dreams, a signature program involving Ford dealers and nonprofits worldwide, including the Boys & Girls Club, the Dallas Independent School District, the Congressional Hispanic Caucus Institute, United Way Panama and Mexico and First Book. First Book has partnered with Ford Driving Dreams since 2015, distributing over 100,000 new books to programs and schools serving children from low-income families across the country, Avila explains. Avila says the program, Operation Better World, is a continuation of
founder Henry Ford’s vision and legacy. “He believed that in order to have a sustainable business, we needed to have a sustainable community,” he says. Since 1949, two years after Ford’s death, the fund has invested over $2 billion in four key areas – supporting education, promoting safe driving, improving community life and encouraging employee volunteerism in over 60 countries. Ford Driving Dreams was established in 2012 to support students and improve graduation rates among multicultural, underprivileged communities. In Texas, Avila explains, this population is largely represented by Hispanics, who have found that dropping out of school carries long-term effects— and is largely preventable. The risk of not developing necessary language skills begins in early childhood. According to a 2010 report by the Annie E. Casey Foundation, citing the National Research Council, a student who reaches the end of third grade with low reading proficiency is unlikely to complete high school. “With that mindset, Ford Driving
Dreams not only provides scholarships, but also brings inspiration to multivaried students and young people to connect their dreams with academic achievement,” Avila says. Alongside financial assistance and book donations, Ford Driving Dreams supplies career-building activities, tutoring, networking programs, college prep tools and motivational events. Thus far, the program has helped more than 200,000 students by delivering over $10 million in educational resources, according to last year’s annual report. The new initiative is expected to further this work. Although it launched in Dallas, its efforts will spread to Kansas City and Phoenix later this year. All three cities share a need for more reading programs. Ford’s March press release cites Literacy Instruction for Texas, which notes there are over 800,000 adults in Dallas County who are illiterate, and by 2030, that number could jump over 1 million - one-third of the area’s projected population. In Arizona, according to a 2015 impact report released by Read On Arizona, 84 percent of children from low-income families read less than proficiently. Despite this, the number of STEAM career opportunities is expected to keep increasing over the next decade, Avila explains. In fact, Texas is expected to have the second-highest percentage of the nation’s future jobs requiring such specialized skills, according to Ford’s press release and Educate Texas. “There is a big, big gap, and in the automotive industry, the gap is even higher,” Avila says. “Being an automotive company, we definitely need to continue doing our part to help to close the gap.” Ford and First Book will distribute an additional 30,000 STEAM-related books by the end of the year – 10,000 to each of the aforementioned cities under the new initiative. “First Book built a curated collection of STEAM titles on the First Book marketplace to spark that curiosity and
encourage students to see themselves in STEAM careers,” says Kyle Zimmer, president, CEO and co-founder of the nonprofit, in Ford’s press release. “We could not be more grateful to Ford for its investment in expanding the breadth and the reach of the collection. It will yield benefits for an entire generation.” Many of those STEAM titles feature protagonists who overcome obstacles, including racism, sexism and poverty, to follow their dreams. Importantly, Avila explains, these topics are relatable to the initiative’s target community – children from low-income families in underserved neighborhoods. “The Doctor with an Eye for Eyes: The Story of Dr. Patricia Bath,” by Julia Finley Mosca, for example, depicts the pioneering scientist as a young girl during the Civil Rights Movement, who dreams of becoming a doctor. Among many accomplishments, Bath became the first African-American female ophthalmologist to patent a medical invention, a new device and technique for cataract surgery. Besides book donations and monthly reading parties, Avila explains, the literacy effort will also engage more employees in mentoring students through STEAM Camp. That program will help students explore and
understand potential options for their future, by participating in interactive STEAM-related activities. At one event, they built a small vehicle with the resources provided, not knowing that their finished product would be involved in a crash test, Avila explains. “We actually gave them an egg, and with that egg, whoever crashed the vehicle more times without breaking the egg was the winner,” he said. “Yes, it was a little messy, but it was a lot of fun.” The impact of this particular initiative, like Ford Driving Dreams, may not reach every state, but that’s not necessary the goal, Avila says. The aim is to simply listen and meet specific community needs. Each year, the Ford Fund invests more than $16 million to support educational initiatives, such as this, so that students may pursue their highest potential through their academic years and beyond. Its impact, in turn, will help solve challenges that might otherwise hinder economic development. “By engaging students at a younger age, we’re providing them more opportunities,” Avila says. “We’re opening their eyes to learn about fields that hopefully they can pursue in the future and help us to close the gap.” n
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CAREER NOTES ROSA SANTANA, founder and CEO of the San Antoniobased Santana Group was named entrepreneur of the year in the Diversified Services category in Central Texas. The award was given in June by Ernst & Young. The award recognizes entrepreneurs who are excelling in areas such as innovation, financial performance, and personal commitment to their businesses and communities, while also “transforming our world,” as noted on santanagrp.com. Rosa Santana has worked the staffing industry in both the U.S. and Mexico for 35 years, and her company now includes units devoted to managed services and business process outsourcing. In 2014, after more than a decade working with Toyota, Santana created the Tier 1 supplier Forma Automotive LLC, which provides fully assembled beds for the Toyota Tacoma. Santana will participate in the Strategic Growth Forum in Palm Springs, California, and will compete for a national entrepreneur award. MICHAEL JUDD has been appointed as executive vice president and chief operations officer at Milton, Georgia-based Exide Technologies. Exide is a global provider of stored energy solutions for the transportation and industrial markets. Judd will report to Tim Vargo, the chairman, president and CEO of the company. Judd, who was most recently vice president of operations at Dover Food Retail, has a lot of transportation experience under his belt. Among other roles, he has held various leadership positions over 25 years in the automotive battery side of Johnson Controls, including vice president of operations, power solutions for the U.S. and Canada, with responsibility for all battery manufacturing and distribution in the U.S. 66 | Southern Automotive Alliance / SUMMER 2019
Also at Exide, JOHN J. GASPAROVIC has become executive vice president, chief legal fficer and secretary. Gasparovic will report to Vargo, and will serve as an advisor to the board of directors and management on all legal and governance matters and will direct the global legal function of the company. Gasparovic retired from BorgWarner Inc. in 2018 after serving as its executive vice president and chief legal officer since 2007. Before that, Gasparovic worked as the senior vice president and general counsel of FederalMogul Corporation and executive vice president and general counsel of Roadway Corporation; vice president Business Development and general counsel of Guardian Automotive; and assistant general counsel of Guardian Industries Corp. SCOTT COOKE has become the chief financial officer of Toyota Financial Services (TFS)Cooke first joined TFS in 2003 and has held a variety of leadership positions at Toyota most recently serving as group vice president of treasury, business intelligence, analytics and finance. In that role, Cooke was responsible for analytics, funding, capital and liquidity risk management, and treasury operations. Earlier in his career, Cooke served as group vice president and chief risk officer, responsible for establishing and implementing risk-based policies and metrics for TFS affiliates in Argentina, Brazil, Canada, Mexico, Puerto Rico, and Venezuela. Before that, Cooke’s positions included serving as corporate manager, product planning for North American Products at Toyota Motor Sales, USA, Inc. Cooke reports to MARK TEMPLIN, president and CEO of Toyota Financial Services. In his new role, Cooke will oversee the full range of financial planning and reporting activities for the company.
Women in Manufacturing STEP (Science, Technology, Engineering and Production) Ahead Awards from The Manufacturing Institute were given to three Toyota team members in April. RENEE ROBERTSON, general manager Production Control, Toyota Motor Manufacturing Kentucky, SHAMAYA MORRIS, production engineering specialist, Toyota Motor Manufacturing West Virginia, and MARIE KENDRICK, powertrain engineer, Toyota’s Bodine Aluminum, Troy, Mo. (Posthumous)were named in the ceremony in Washington, D.C. The STEP Ahead Award winners represent all levels of the manufacturing industry, from the factory floor to executive leadership. The STEP Ahead Awards are part of the larger STEP Ahead initiative, launched to examine and promote the role of women in the manufacturing industry through recognition, research and leadership. Nissan announced that JEFFREY WEBSTER, director, Diversity and Inclusion, is retiring Aug. 1 after 34 years. His successor will be RODNEY FRANCIS, currently human resources director, Nissan Canton (Mississippi) Vehicle Assembly Plant. During Webster’s tenure, Nissan received numerous awards for its diversity efforts, including DiversityInc’s “Top 25 Noteworthy Companies” list for six consecutive years. Francis will now lead Nissan’s strategic programs that support diversity and inclusion, as well as recruiting, developing and retaining top talent. Francis joined Nissan Canton in 2014 as senior manager, Human Resources. n
Index AAMA............................................... 38, 59
Hyundai...............13, 14, 15, 17,18, 19, 40
Philip Lutzenkirchen................................. 15
AIAG......................................................... 2
Jaguar.................................................... 14
Piston Automotive............................... 63
AIDT....................................................... 22
Jeffrey Webster.......................................... 66
Prince Metal Stampings...................... 43
Alabama Commission on Artificial
John J. Gasparovic..................................... 66
Red Clay Rally.............. 44,45,46,47,48,49
Intelligence........................................... 12
KAIA/KAM.............................................. 61
Reich...................................................... 37
Amazon................................................. 13
Kay Ivey...................................................... 14
Renault.................................................. 15
Andres Manuel Lopez Obrador............... 29
Kia.................................................... 14, 18
Renee Robertson...................................... 66
Autocar.................................................. 17
Kuka College......................................... 12
Rick Walker...........................................36,38
B.R.A.K.E.S................................... 50,52,53
Land Rover............................................ 14
Rodney Francis.......................................... 66
BCA.................................................... 4, 18
Lawson State Community College..... 69
Ron DeSantis............................................. 13
BMW...........................................12, 14, 15
Little Motor Kar Company............. 66,68
Rosa Santana............................................. 66
Brad Newman.................38,39,40,41,42,43
Maaco.................................................... 13
S-2.......................................................... 54
Calhoun Community College.............. 15
MAMA.............................................. 38, 58
SAC 2019................................................ 51
CAVS......................................................... 5
Marie Kendrick.......................................... 66
SCAC....................................................... 57
Center for Automotive Research....... 24
Mark Brazeal.......................... 1, 20,21,22,23
Scott Cooke................................................ 66
Clemson................................................ 12
Mark Zukerberg........................................ 19
Shamaya Morris........................................ 66
Continental Tire................................... 40
Mazda.................................................... 14
South Carolina Ports Authority.......... 19
Cox Automotive Group........................ 25
Mazda Toyota Manufacturing
Staubli................................................... 11
Dabo Swinney............................................ 15
USA....................1, 14, 17, 19, 20,21,22,23
Stenco.................................................... 31
DaikyoNishikawa........................... 17, 21
McAbee.................................................. 23
Systems................................................. 11
Delta Kogyo........................................... 14
Mercedes-Benz..........7, 15, 25, 26, 40, 63
TAMA..................................................... 60
Denso..................................................... 52
Michael Judd.............................................. 66
Terri Bryson.....................................32,33,34
Donald Trump........................ 14, 16, 18, 29
Minact................................................... 27
Terri Sewell..........................................30, 31
Donghee Alabama................................ 16
Motlow State Community
Texmobile........................................ 68,70
Dynetics................................................ 17
College..................................1, 9, 32,33,34
Toyo Seat Co......................................... 14
EFC......................................................... 72
Nadia Theodore..................................29, 31
Toyota...................................14,16, 18, 40
Elena Ford.............................................64,65
NAFTA.................................................... 28
Toyota Boshoku................................... 14
Fiat Chrysler......................................... 15
Nancy Pelosi.........................................29,30
UA SafeState......................................... 53
First Book......................................... 64,65
NAOS................................................ 55, 71
UAW....................................................... 15
Focus Fab.............................................. 37
Navistar................................................ 12
US Department of Commerce............ 30
Ford................13, 16, 17, 18, 25, 40, 64,65
Nellie Preston......................................66, 68
US Department of Defense................. 31
GAMA............................................... 38, 56
NHTSA.............................................. 12, 14
USMCA.................................... 28,29,30,31
General Motors............................... 39,63
Nick Saban................................................. 15
UTZ......................................................... 53
GMC....................................................... 17
Nissan.................................................... 33
Volkswagen....................12, 13, 15, 18, 63
Greenville Technical College............... 12
Northwest Alabama Economic
Volvo...........................................18, 19, 63
Greg Canfield............................................. 14
Development Agency.......................... 27
Wagner Turning.................................... 63
Gus Malzahn.............................................. 15
Olympic Steel........................................ 18
Wallace State Community College..... 14
Hanwa................................................... 12
Onin......................................................... 6
Wayne Community College................. 15
Hitachi................................................... 63
OSHA.....................................16, 35, 36, 38
William Principe........................................ 38
Hodges..................................................... 3
Page & Jones......................................... 49
Y-Tec Keylex Toyotetsu................. 14, 21
Honda.................................................... 18
Payton Skeens................................41,42, 43
ZF.................................... 1,18, 38,39,40,41 SUMMER 2019 / Southern Automotive Alliance 67
VINTAGE
Best Little Kar Scandal In Texas
A startup that got Lone Star investors excited a century ago ran off the road and into the federal pen TEXT BY: NICK PATTERSON
W
hile it’s not unheard of for automotive manufacturers to face legal trouble, a company that did business in Texas about 100 years ago faced an existential crisis resulting from what federal authorities called malfeasance. The company was called the Little Motor Kar Company, and it made cars known as the Texmobile. Today, if you Google “Texmobile,” you will come up with results for anything from TexMobile, Inc., a SaaS developer of mobile applications for the CRM market, to TexMobile, the Latvian cell phone repair service, to even T-Mobile, an American enterprise famously known for being a cellphone service provider. An internet search for Little Motor Kar Company will find a chrome plating service for scale models located in Reading, Pennsylvania. Presumably, the 21st century company found the name too on-the-nose for the service they provide to pass up. But the Little Motor Kar Company of yesteryear was a very different kind
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of enterprise. Owned by a man named William S. Livezey of Maryland, the company sold stock for between $1 and $4 a share. “He … advertised heavily in Texas newspapers to sell stock at first $1, then $2, then $4 a share, claimed to have raised $100,000, then $1 million, then $3 million, bought land near the Fowler stop on the interurban line in Grand Prairie, and began construction of the first of five planned fireproof buildings that would keep three thousand workers busy in two shifts,” according to hometownbyhandlebar.com, a history-focused blog site about Fort Worth and related matters. The blog is written by journalist Mike Nichols, a former columnist and travel writer for the Fort Worth Star-Telegram, among many other credits. Nichols, who uses images of news clippings to tell the story, notes that the Texmobile was supposed to come in two models, a sports car that would sell for $350, and a five-passenger touring car that would sell for $750. “As the name of the company
implies, Texmobiles were to be little cars,” Nichols writes. “The touring car, with wire wheels and two side-mounted spare tires, would have a wheel base of 106 inches (same as a 1932 Ford Model A). The four-cylinder engine—which William S. Livezey himself invented and named the “W.S.L.”—developed twentyseven horsepower.” The company knew its market, advertising the TEXMOBILE (they seemed to always capitalize it in their ads) as “a car that characterized the rugged strength of the pioneers who first settled in this great Empire of the Southwest.” The builder bragged about the car’s “exceptional road clearance… strong well-proportioned chassis… classy streamline body” all adding up
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VI N T AGE
Each unit used in the construction of the TEXMOBILE is a masterpiece of design and construction. Every part has been thoroughly tried and tested for years and we know just what is going into these cars. —Ft. Worth Star-Telegram,1919. to “a most pleasing car.” “Each unit used in the construction of the TEXMOBILE is a masterpiece of design and construction. Every part has been thoroughly tried and tested for years and we know just what is going into these cars,” according to an ad that ran Oct. 26, 1919 in the Ft. Worth StarTelegram. The company ads pushed investors with urgent appeals to pony up their money. In fact, that was mainly what the Little Motor Kar Company made — ads — according to Nichols, who writes that “The Little Motor Kar Company produced mostly full-page advertisements to attract investors.” In the same month as the ad just mentioned, the company produced a model of the Texmobile for people to see at the Texas State Fair in Dallas. The Star-Telegram wrote that the company built that first car using its own tools, and it quoted Livezey as saying that the Little Motor Kar Company planned to build all parts “from beginning to end” in Texas to manufacture cars, trucks and tractors. There were huge plans for assembly buildings, bungalows for workers, administration buildings, railroad spurs and more. To believe the advertising and the press, the Texmobile was a sure thing. “Livezey claimed to own the tools—valued at $40,000—necessary to build the Texmobile engines and claimed to have contracted with manufacturers in the North to deliver ten thousand engines the first year for sports cars, touring cars, tractors, and trucks,” Nichols writes. “In early March 1920 sales manager J. H. Judge claimed to have orders for 100,000 Texmobiles. The company claimed to have thirty thousand stockholders.” In March 1920, the Grand Prairie Texan offered a tantalizing look behind the scenes at the Little 70 | Southern Automotive Alliance / SUMMER 2019
Motor Kar Company (as reported in the newsletter of the Grand Prairie Historical Organization): “Day by day we see the Little Motor Kar Company progressing, not as fast probably as some would have liked, but it has been built surely and slowly, yet fastly, much to the very great gratification of those who want their money invested in something that is here to stay, to build them a handsome business that will bring big returns on their investment, both this year and next year, and on and on in the future.” If Texans were favorably impressed by the news coming from Little Motor Kar Company, that would not last. On April 13, 1920, reality bit the Texmobile company. And it did it in the middle of the night. A clipping on Nichols’ blog, sourced from the Dallas Morning News, tells the tale under the headline “Little Motor Kar Officials Arrested”: “Charged with using the United States mails for fraudulent purposes in connection with the business of the company, the following officials of the Little Motor Kar Company were placed under arrest by Post Office inspectors at 1 o’clock this morning: William S. Livezey, president…” The top brass of the company, which included four more officers were all taken into custody. Meanwhile even before the arrests, their company had been placed under federal court-ordered supervision, after stockholders raised accusations of mismanagement. Stockholders were convinced that Livezey and company had lost most of the $1 million in investments they had raised, the news story recounted. As Nichols notes, at Livezey’s fraud trial in Dallas in February 1921, prosecutors pointed out that Little Motor Kar had promised investors
$10,000 for every $10. Not to mention that the company had apparently only completed a handful of cars – hardly the mass production touted in its previous ads. Worse still, there was an even more titillating scandal involved, one which explains where all the investors’ money had gone. The Feb. 12, 1921 edition of the StarTelegram carried a four deck headline, starting with, “Girl Tells of Receiving Gifts” and following with three subheadings below that – “Miss Nellie Preston of Maryland is Witness in the Trial” “COURTROOM IS FILLED” and “Young Woman Tells of Jewels, Automobiles, Furs and Other Presents from Motor Kar Head.” Nellie Preston, 19, and her brother, testified about how Livezey had showered the young woman and her family – but mostly her – with gifts. Her gave her an Overland sedan and a Stutz Roadster (notably, not Texmobiles), two squirrel coats – one a Siberian squirrel valued at $560 – along with jewelry, a saddle horse, a typewriter, $400 in cash and checks, and “much silk underfinery.” Livezey was convicted and sentenced to five years in the federal pen at Leavenworth. “The Little Motor Kar Company closed for a year, then elected new officers and resumed production in 1922,” Nichols writes. “But the dream of the Texmobile was dead. The Little Motor Kar Company instead produced a little truck called . . . wait for it . . . the ‘Little.’ But in 1928 the company filed for bankruptcy. The Little was too little too late.” It might be worth noting, that before Livezey’s doomed enterprise even started, there was a similarly sounding Little Motor Car Company operating from 1912 to 1915. That one, founded by William H. Little and General Motors co-founder William C. Durant (among others), built four and six cylinder cars in Michigan called Littles. The Little Motor Car Company ended up being incorporated into Chevrolet. n
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