The Greater Auto Sector
The Alabama-based plants that supply Alabama’s big five assembly and engine manufacturers number in the hundreds, with thousands upon thousands of employees.
Gov. Robert Bentley tours the axle line at the Tuscaloosa plant of Mercedes supplier ZF Lemforder Corp.
They make car seats, car doors, braking systems, headlights, gaskets and more. If it’s a component of a modern automobile, odds are somebody’s making it in Alabama.
They may not carry the glitz and glamour of the big five — Mercedes-Benz, Hyundai, Honda, Toyota and Navistar — but they represent an enormous industrial sector in the Alabama economy.
They are the Tier One and Tier Two suppliers, spread across the state from major cities to towns as small as Luverne, Elba, Cusseta and Haleyville.
Some have been in the state almost since the announcement that Mercedes was on its way; some for just a few months.
In total, they are a force to be reckoned with.
The Big Five may be the “mother bee” of Alabama’s automotive sector, as described by David Bronner, of the Retirement Systems of Alabama. But the suppliers are the worker bees that support the effort.
Together, some 80 key firms employ in the neighborhood of 20,000 workers, according to Alabama Department of Commerce figures.
Faurecia, among the state’s largest suppliers by number of employees, is a great example. The French firm opened in Tuscaloosa in 2010, then added a second plant there and an additional plant in Cottondale. Along with others in the state, Faurecia supplies seat assemblies to Mercedes and auto plants in neighboring states.
Like many other suppliers, the Alabama operation is part of a global company. Automotive News ranks Faurecia as 7th in the world in 2012, with $22.5 billion in sales in 2012 and 94,000 employees in 34 countries.
Other big players include:
- Johnson Controls, in Cottondale. Among the nation’s largest automotive suppliers, Johnson Controls also is among Alabama’s oldest supplier firms, opening its plant in 1995. Like Faurecia, Johnson Controls makes seats for Mercedes. Automotive News ranks it 6th on the international list.
- Mobis America, in Montgomery. Opened in 2005, Mobis makes cockpit and chassis systems for Hyundai’s neighboring plant in Montgomery and for the sister Kia plant in West Point, Ga. Automotive News ranks it 8th among international supplier firms.
- Nemak USA Inc., in Sylacauga. Nemak has two facilities in Sylacauga, which it describes as using “different production technologies: Lost Foam and High Pressure Die Casting.” The Alabama plants employ nearly 700 workers of a worldwide 20,000-employee team.
- Smart Alabama LLC, in Luverne. A principal supplier for body parts for Hyundai, the 700 workers in Luverne make parts for Hyundai’s Sonata sedan and Santa Fe SUV models. Smart Alabama is the largest employer in Crenshaw County.
- TS Tech Alabama LLC, in Boaz. Another automotive seat maker, TS Tech Alabama’s principal customer is Honda, with its plant just an hour away in Lincoln.
The influx of suppliers began almost immediately after the Mercedes announcement, when Alto came to town.
- Alto Products opened in 1993 in Atmore. A 50-year-old manufacturer of friction clutches and related equipment, Alto moved its headquarters to Atmore in 1997.
- Rehau Automotive LLC opened in 1994 in Cullman. A worldwide corporation, Rehau’s Alabama operations specialize in automotive parts, plastic injection molding, painting and assembly. In November, Rehau announced plans for a new technical center— its first in North America — adjacent to its existing Cullman plant. The new center, estimated to cost $2 million to $3 million, will house about 45 engineers, who will work on injection molding, paint, fabrication and supply chain issues, as well as offering space for technical training. It followed close on the heels of news of a plant expansion to facilitate a new bumper system for Mercedes.
- ZF Lemforder Corp., which opened in 1994 in Tuscaloosa, is a key supplier for Mercedes, making automotive front and rear axle systems. Like Mercedes, the company is based in Germany. And like Mercedes, it recently has completed a significant expansion.
- Kamtek Inc., which opened in 1995 in Birmingham, operates an auto body metal stamping plant. Like many other Mercedes suppliers, it has expanded recently.
Each new automaker has brought its own rush of suppliers, which come to be close to their customers. Says Ashley Frye, vice president of production at the Hyundai plant in Montgomery, about half of the company’s 70 major suppliers are headquartered in Alabama.
Hwashin America is typical. The company produces chassis and body components, primarily serving Hyundai and its other suppliers. The company has expanded twice since opening in 2004 in Greenville.
Mando America Corp. Alabama, a Korean-based provider of brake, steering and suspension systems, completed construction of its Opelika plant in 2005.
Yachiyo opened its Alabama plant almost in concert with Honda’s plant in Lincoln in 2000. Located in Steele, the plant has expanded several times, including a 2012 expansion to support the new Acura MDX at Honda.
And the influx continues today. Among the newest industries in Alabama’s Interstate 22 corridor is Fayette Fabrication. The plant, first in its tri-county regional business incubator, will make steel racking systems for use on the production floor of manufacturing plants. Suppliers also use these assemblies to transport products to their customers. Fayette Fabrication opened in December, 2013.
Over in Lee County, Donghee America Inc. joined the strong supplier force in 2013 when it announced a $48 million investment for a plant to make automotive fuel tanks. The plant, in the Auburn Technology Park West, joins German supplier RAPA, Seung Chang Airtech and Mando as new and expanding players in the Auburn-Opelika area.
RAPA, a nickname for German-based Rausch and Pausch LP, was the 2012 headline maker there with the announcement of an $18 million plant and headquarters. A maker of precision auto parts, including solenoid valves and control blocks, RAPA supplies Chrysler and German transmission manufacturer ZF.
“We are now an Auburn company,” Chairman of the Board Horst Pausch Sr. said of the Auburn location. “Over time, we want to build a company in Auburn that is independent from Germany, with its own research and development capabilities and its own set of North America-based customers.”
Nedra Bloom is a copy editor for Business Alabama.