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Dayton Business Journal...
Manufacturers
optimistic after strong auto sales
by Joe Cogliano
Saturday, November 5, 2011
Sales of new autos in the U.S. hit an eight-month high in October,
which may signal consumers are ready to buy again in bigger numbers.
Led by increases at General Motors , Ford Motor
Co. and Chrysler Group, the annual selling rate for
the month was above 13.2 million vehicles, the best performance since
February and a 7.5 percent increase compared to last October.
The overall numbers were up even though Toyota Motor and Honda Motor
Co. posted declines in October. Both automakers are still working to
recover from parts shortages caused by Japan’s March earthquake and now
are dealing shortages because of flooding in Thailand.
Note: Click here for a sideshow of the top 10 strongest automotive
states.
Insiders say the future of auto sales is bright as car and truck owners
have delayed purchases and their cars are literally falling apart. As a
result, an industry boom could pump tens of millions of extra dollars
into the Dayton-area economy because of the large number of auto
suppliers still here.
“There’s a big pent-up demand,” said Ron Lamb, president of
Kettering-based auto dealer software and services provider The Reynolds
and Reynolds Co. “The average age of a used vehicle
is more than 10 years, which is far and away the oldest since (that
statistic) has been tracked. Both (car makers) and dealers recognize
“we’ve got to get our house in order’ to go capture this bubble that’s
coming.”
Note: Click here for a slideshow of the top 5 best-selling vehicles.
Greg Millat sees the overall mood as cautiously optimistic that sales
will continue to trend upward. A board member with Dayton Region
Manufacturers Association, which was known until recently as the Dayton
Tooling and Manufacturing Association, Millat also hears that many
local auto suppliers have seen an increase in orders.
“Of course we have fewer competitors now too, so it’s a healthier
environment for those remaining,” said Millat, who also is owner Millat
Industries Corp. , which has 170 employees at
facilities in Kettering and Huber Heights.
Within the past six weeks, the largest auto-related employer in the
region — Honda Motor Co. — made several expansion announcements that
will boost employment and lead to more orders from its suppliers.
Honda said it would invest an additional $50 million its Logan County
transmission plant. The 75,000-square-foot expansion at Russells Point
to increase capacity for the casting of aluminum transmission cases
will support a 200,000-square-foot plant expansion launched late last
year. Russells Point is 25 miles northeast of Sidney. The two projects
will create more than 100 jobs by 2013. Currently, the transmission
plant has more than 1,000 employees.
The Honda engine plant in Anna — located north of Dayton — employs
2,400 and the company has more than 13,400 workers in Ohio.
Honda also launched a second production shift at its Greensburg, Ind.,
plant. The move boosts output at the plant, which began production of
the redesigned 2012 Civic Natural Gas in October. Hiring of 1,000 new
associates began in June, Parts for Indiana-built Civics are supplied
from 225 companies in the U.S. and Canada, including 74 in Ohio.
Within weeks of Honda’s announcements, one of its Dayton-area suppliers
announced it would expand.
YAMADA North America plans nearly $20 million expansion in South
Charleston that would add about 60 new jobs. The company, which already
has about 310 workers at the site, supplies steering columns, drive
shafts, water and oil pumps to Honda.
While Honda’s growth is expected to have a ripple effect on Dayton-area
suppliers, demand from other auto manufacturers is driving local
investments.
For example, Millat Industries — a tier-2 supplier of precision machine
components to a variety of automakers — is on track to invest $1.5
million in new equipment this year to land specific projects. Millat’s
business has incrementally rebounded during the last several years,
improving sales each year, and he sees that continuing.
“We’re also making more tooling, we’re buying tooling, we’re using
local suppliers,” he said.
Other expansions in the works include:
• All-Service Plastic Molding Inc. broke ground last month on a
140,000-square-foot facility in Vandalia that will allow the company to
consolidate and expand operations. The plastic injection molding and
assembly company — which has about 180 employees and 80 temporary
workers across several sites — is seeing much of its growth come from
auto and appliance customers;
• Kotobuki-Reliable Die Casting Inc. in Xenia — which provides aluminum
die casting and machining of parts, mostly for the auto market — has
purchased a second facility and plans to add another 25 to 30 workers
in the next year or so. A sharp increase in business from existing
customers is driving the growth and has the 71-employee company busting
at the seems at its original 54,500-square-foot facility.
Kotobuki-Reliable is a Tier 1 supplier for General Motors and a Tier II
supplier for Toyota and Nissan; and
• BWIGroup, the joint venture that acquired Delphi’s brake and
suspension units in November 2009, has taken steps to build a $20.2
million facility on College Drive in Kettering for BWI North America
Inc. The proposed project would create 130 new full-time positions
paying an average of $40 per hour and retain 225 full-time jobs. At the
new site, BWI would consolidate operations in Dayton and southwest
Michigan into a Customer and Engineering Center. A decision on whether
or not the company will move forward with the project here is expected
in the next few months.
Read this and other articles at the Dayton Business Journal
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