Since 1998, the trend lines were clear. Vehicle production in Detroit’s Midwestern backyard was trailing off while Southern and Mexican facilities ramped up new capacity for Asian and European auto makers.
The migration was expected to continue for years to come, but the Midwest would not be the biggest loser, according to a 2005 Ward's forecast. Even with the plant closings announced Nov. 21, 2005, by General Motors Corp., parts of the South actually were expected to lose more vehicle production than their neighbors to the North.
For instance, the South Atlantic region, which encompassed Georgia, South Carolina, North Carolina, Virginia, Maryland and Delaware, was forecast to produce 458,771 fewer vehicles in 2008 than in 1998, a 34.9% drop.
Vehicle production in the Middle Atlantic region, which included New Jersey, New York and Pennsylvania, was expected to drop by 324,730 units. By 2008, the region was predicted to manufacture a mere 13,818 vehicles – a whopping 95.9% decline in output.
The West North Central region – Kansas, Minnesota and Missouri – was forecast to lose 299,116 units in vehicle production by 2008, which meant an 18.6% dip in output.
Meanwhile, the East North Central region – Illinois, Indiana, Michigan and Ohio – was projected to lose a mere 0.5% of its vehicle output by 2008. That represented 30,800 fewer vehicles manufactured in the Big Three’s stronghold in 2008 than in 1998. In 2005, the region’s tally was 5,783,291 units, according to Ward's.
| 1998 Actual | 2005 Estimate | 2008 Forecast | % Change 1998-2008 | Vol. Change 1998-2008 | ||
|---|---|---|---|---|---|---|
| Canada | 2,570,321 | 2,695,460 | 2,798,174 | 8.9 | 227,853 | |
| Mexico | 1,459,891 | 1,637,055 | 1,962,393 | 34.4 | 502,502 | |
| New England | 0 | 0 | 0 | – | 0 | |
| Middle Atlantic | 338,548 | 27,457 | 13,818 | -95.9 | -324,730 | |
| South Atlantic | 1,315,605 | 1,013,376 | 856,834 | -34.9 | -458,771 | |
| East North Central | 5,965,142 | 5,831,508 | 5,934,342 | -0.5 | -30,800 | |
| East South Central | 1,819,397 | 2,636,303 | 3,007,706 | 65.3 | 1,188,309 | |
| West North Central | 1,608,671 | 1,495,886 | 1,309,555 | -18.6 | -299,116 | |
| West South Central | 535,923 | 500,584 | 572,261 | 6.8 | 36,338 | |
| Mountain | 0 | 0 | 0 | – | 0 | |
| Pacific | 419,377 | 479,030 | 415,889 | -0.8 | -3,488 | |
| Total | 16,032,875 | 16,316,659 | 16,870,971 | 5.2 | 838,096 | |
| Source: Ward's AutoForecasts. | ||||||
On a percentage basis, the biggest gainer was the East South Central region – Alabama, Kentucky, Mississippi and Tennessee. In 1998, those states produced 1.8 million vehicles. Ward's forecast output of 3,007,706 units, a 65.3% gain by 2008.
Alabama was charting the fastest production growth of any state. In 1998, its only vehicle assembly plant was in Vance, where Mercedes-Benz U.S. International Inc. was launching the M-Class SUV. Alabama was anticipated to produce nearly 800,000 vehicles annually, giving it a 4.7% share of North American output by 2008.
In 2005, Hyundai Motor Co. Ltd. was ramping up Sonata car production in Montgomery, AL, and was slated to add the Santa Fe cross/utility vehicle to the plant’s mix in 2006. At the same time, Mercedes was adding capacity in Vance with the ramp-up of its new R-Class CUV in 2005 and a G-Class replacement that was due in 2006.
| 1998 | 2008 | ||||||
|---|---|---|---|---|---|---|---|
| % Share | % Share | ||||||
| 1. | Michigan | 2,782,377 | 17.4 | Ontario | 2,789,673 | 16.5 | |
| 2. | Ontario | 2,475,468 | 15.4 | Michigan | 2,601,630 | 15.4 | |
| 3. | Ohio | 1,945,522 | 12.1 | Ohio | 1,763,290 | 10.5 | |
| 4. | Missouri | 1,189,977 | 7.4 | Kentucky | 1,173,372 | 7.0 | |
| 5. | Kentucky | 1,185,864 | 7.4 | Missouri | 963,502 | 5.7 | |
| 6. | Illinois | 615,533 | 3.8 | Alabama | 796,488 | 4.7 | |
| 7. | Tennessee | 564,806 | 3.5 | Indiana | 760,724 | 4.5 | |
| 8. | Georgia | 514,271 | 3.2 | Tennessee | 606,910 | 3.6 | |
| 9. | Indiana | 373,797 | 2.3 | Illinois | 586,015 | 3.5 | |
| 10. | California | 361,859 | 2.3 | Puebla | 444,314 | 2.6 | |
| Total | 12,009,474 | 74.9 | 12,485,917 | 74.0 | |||
| Source: Ward's AutoForecasts. | |||||||
GM’s plant closings were spread across several regions. Oklahoma City; the Lansing, MI, Craft Center; and the Spring Hill, TN, plant’s No.1 line were scheduled to cease production in 2006.
Also in 2006, the Oshawa Car Plant No.1 in Ont., Canada, was set to lose its third shift, while Oshawa car plant No.2 was slated to close after Buick LaCrosse and Pontiac Grand Prix production ran out in 2008.
Doraville, GA, was scheduled to cease production in 2008 as the stable of GM minivans (there were four in 2005) reached the end of their lifecycle.
Mexico and, to a lesser extent, Canada were forecast to maintain steady production growth.
Mexico was expected to manufacture 502,502 more vehicles in 2008 than in 1998, a robust 34.4% gain, according to Ward's. For the same period, Canada was projected to gain 227,853 units, an 8.9% boost in output.
In 2006, Nissan Motor Co. Ltd. was set to add production in Mexico of the Versa small car to be sold in the U.S. Volkswagen AG was forecast to increase overseas exports from its Puebla plant, which built the Jetta/Bora, Beetle and medium- and heavy-duty trucks.
GM was expected to add production of Silverado and Sierra pickups to its Silao, Mexico, plant and move production of the Suburban and Yukon XL from Silao to Janesville, WI, and Arlington, TX.
If GM’s crucial next-generation GMT900 fullsize pickups and SUVs stumbled in the marketplace, the Pontiac East plant in suburban Detroit, rather than Fort Wayne, IN, and Oshawa Truck in Ontario, was the most likely plant to be closed, Ward's said.
In Canada, Toyota Motor Corp. was expected to add production of the Highlander CUV at its Cambridge, Ont., plant in 2007. Nearby in Woodstock, Toyota was busy planning a new plant to manufacture 100,000 RAV4s annually, beginning in 2007.
Ford Motor Co. was forecast to increase output at its Oakville, Ont., plant with the addition of the redesigned Lincoln Aviator and new Ford Edge CUVs in late 2006.
–with Haig Stoddard
