Automakers have long toyed with outsourcing the assembly of niche vehicles. And coachbuilders are happily standing by to do the work.
But will the North American auto industry ever follow the European practice of turning niche vehicles over to outside assemblers? The idea has been under scrutiny for years - and could become a North American factory of the future.
One company eager to move forward is Magna Steyr. The Austrian business unit of Canada's Magna International Inc. builds vehicles in Graz, Austria, for the Chrysler group, Mercedes-Benz and Saab. Other European vehicle outsourcers include Valmet Automotive in Finland, which builds the Porsche Boxster and Cayman cars; and Karmann GmbH of Germany, which makes the Chrysler Crossfire car and Audi A4 Cabriolet.
The basic idea: An independent outsourcing shop can start and stop production with more flexibility and at lower cost when building low-volume niche vehicles.
Magna Steyr is shopping
Magna Steyr wants to set up shop in North America and is looking for a plant site.
In June, the unit received its first U.S. manufacturing job, taking over the paint shop at the Chrysler group's new Jeep Wrangler plant in Toledo, Ohio. Magna will operate like it is part of Chrysler.
"Our recent announcement is a significant first step in assembling vehicles in North America," says Mark Hogan, Magna International president.
U.S. automakers are at least warm to the idea. They have been turning over larger parts of their production to suppliers in recent years. The Toledo Jeep plant relies on Hyundai Mobis, of South Korea, to build the Wrangler's complete chassis in a part of the plant that Mobis owns. Trends in North American supplier parks have seen suppliers move onto campuses that are integrated into assembly plants operated by Ford Motor Co., Nissan North America and Toyota Motor Corp.
But that's still a long jump from turnkey vehicle assembly.
One problem is the financial downturns for both Ford Motor and General Motors. Both automakers are closing North American plants and eliminating tens of thousands of factory jobs. Outsourcing assembly jobs to other companies would be a bitter pill for the UAW.
For Ford and GM, at least, the odds of bringing in a third-party assembler anytime soon are nil.
The more likely scenario for outsourcing vehicles involves urgent need and tight capacity. That combination prompted Toyota this year to outsource 100,000 units of Camry production to Fuji Heavy Industry Ltd.'s plant in Lafayette, Ind. Even in that case, Toyota will maintain management control of the assembly line.
Toyota's underlying message, which may apply to the traditional Big 3 for some time, is that a little outside help is nice, but we still know our product best.
You may e-mail Lindsay Chappell at [email protected]