The European and Japanese transplants may be models of manufacturing efficiency, but history offers a valuable lesson: Sometimes plants fail.
For proof, look to Volkswagen AG.
VW was the first high-volume foreign automaker to set up a North American manufacturing operation. The year: 1978. The place: Westmoreland County, Pa., about 35 miles southeast of Pittsburgh.
There, the first U.S.-built Rabbit, the replacement to the popular Beetle, rolled off the line. From 1978 to 1988, VW cranked out more than 1.1 million cars before declining demand forced the automaker to shut the factory. VW remained in North America but shifted production to lower-cost Mexico.
Sony bought the Pennsylvania site to make picture tubes for TVs. In 2002 Penn State Tool and Die Co. turned the plant into a tool and die operation.
While VW made history as the first foreign automaker with a large-scale operation, it should be noted that both Mercedes-Benz and Rolls-Royce had small assembly operations in the United States decades before that. Mercedes models were built in Long Island, N.Y., from 1905 to 1907, under license from Germany's Daimler, and Rolls-Royce built nearly 3,000 Ghost and Phantom models at a Springfield, Mass., plant from 1921 to 1931. The list of failed operations does not stop with these three companies.
Volvo Canada Ltd.'s Halifax, Nova Scotia, plant had a long run assembling kits that were shipped from Sweden. The plant opened in 1963 and closed in 1998 after assembling more than 260,000 cars. At the time of the closing, Volvo said it was no longer economically feasible to produce cars in Halifax for the Canadian market.
Hyundai, which is building a plant in Alabama, also had to close its first North American factory. In 1989 the Korean automaker opened a $400 million plant in Quebec to build the Sonata sedan and the Excel. Sliding sales forced the carmaker to close the plant in 1995.