Transplants keep rolling in N. America

The rise of foreign automakers in North America gained huge momentum during the dark days of the recession, accelerating the decline of Detroit 3 dominance.

Today 39 percent of all auto company employees in North America work for companies other than the Detroit 3, according to an Automotive News survey. That's up from 25 percent in 2005 -- the last time we counted -- and 15 percent in 2000.

The totals include hourly and salaried workers in all departments, including captive finance companies.

The surge of Asian and European carmakers began in earnest 31 years ago when Honda launched production in Marysville, Ohio, at the first Japanese car plant in the United States. A year later Nissan began building cars in Smyrna, Tenn., and the North American industry has undergone a steady transformation ever since.

But it is no longer a slow transformation.

Overall, carmaker employment in North America is down by 104,524 jobs since 2005. Yet Asian and European companies added 28,654 jobs during that stretch as they built plants, installed r&d centers and put in other facilities in the United States, Mexico and Canada.

Nondomestic automakers have opened seven assembly plants in North America in the eight-year-span, while the Detroit 3 closed 21.

In the first quarter of this year, transplants accounted for 46 percent of North American vehicle production, up from 31 percent in the first quarter of 2005 and 22 percent in the same period of 2000.

IHS Automotive analyst Michael Jackson predicts that by 2017 nondomestic carmakers will account for half of total North American output.

"They'll be neck and neck," said Jackson.

The Center for Automotive Research in Ann Arbor, Mich., says the addition and expansion of Asian and European factories in Mexico soon could push capacity for non-Detroit 3 companies above that of the Detroit 3. But CAR says non-Detroit 3 employment isn't likely to be surpassed because of GM, Ford and Chrysler's substantial product development and r&d activity in North America.

CAR expects the Detroit 3 to add 14,000 jobs in the United States in the next four years, bringing their U.S. head count to 201,000 workers.

Altogether, automaker employment in North America totaled 416,691 at the end of the first quarter, down from 521,215 in the first quarter of 2005. The number of vehicle assembly plants declined from 80 in 2005 to 70 at the end of 2012. During that time Chrysler closed four plants, Ford closed seven, General Motors moth-balled 10, and Mercedes shuttered its Sprinter plant in Gaffney, S.C.

Twelve new vehicle assembly plants have been opened in North America -- six by Asian automakers, two by European automakers and four by the Detroit 3. Two of the Detroit 3 plants were built in Mexico.

But even as the industry slid into recession, it has been a period of rapid expansion for several Asian and European carmakers.

Volkswagen's North American employment rose from 18,714 in 2005 to 25,100. VW expanded its assembly plant in Puebla, Mexico, in 2009, adding nearly 2,500 jobs to bring Volkswagen de Mexico employment to 18,756 workers. With an annual production capacity of more than 600,000 units, Puebla is now VW Group's largest assembly plant outside of Europe.

In addition, Volkswagen opened an engine plant in Silao, Mexico, in January adding 700 jobs, and an assembly plant in Chattanooga in 2011, creating 3,000 jobs.

BMW's North American employment has grown 59 percent since 2005, to 9,375. The company expanded its Spartanburg, S.C., assembly plant in 2008 and again in 2010, bringing employment to about 7,000.

The plant, which now builds three of the four crossovers BMW sells worldwide, will add production of the X4 crossover next year. Capacity will grow from 300,000 units to 350,000, though BMW has not said how many jobs will be added.

Daimler Group's North American job count now stands at 7,838 after expansion of the Mercedes-Benz factory in Vance, Ala., that produces the M-class, R-class and GL-class crossovers.

About 1,000 jobs will be added at the plant when production of C-class sedans begins next year. A new crossover goes into production in Alabama in 2015.

Hyundai has added about 3,000 jobs since opening its assembly plant in Montgomery, Ala., in 2005. Kia's factory in West Point, Ga., which opened in 2009, employs 3,000 people.

Toyota shed 5,000 jobs in 2010 when it closed its NUMMI joint venture with General Motors in Fremont, Calif. Tesla now builds its Model S electric car at the plant, employing 2,964 people.

Toyota has added 3,500 jobs in the past 18 months, including 2,000 at the Blue Springs, Miss., plant that opened in 2011 for production of the Corolla.

Nissan's North American work force has grown by 25 percent to 30,000 in the past eight years as it added capacity at its four production facilities.

As the industry bounces back, the domestics are adding jobs, too.

Chrysler said that since June 2009 it has hired more than 8,200 workers, mainly second and third shift crews.

Four Chrysler group plants are running three shifts, and five are on two shifts.

A Ford spokesman said its 2011 UAW contract agreement included a commitment to "add 12,000 hourly jobs in its U.S. manufacturing facilities by 2015, which we've more than halfway accomplished."

A GM spokesman said since it came out of bankruptcy it has committed to investments of more than $8.5 billion in its U.S. operations, "creating or retaining more than 24,700 jobs."

Asian and Japanese carmakers are planning to add thousands of jobs in Mexico. Honda is spending $800 million to build a plant in Celaya, Mexico, where it will employ 3,200 people to build subcompact cars starting in 2014.

In 2015 Mazda will open a $650 million plant in Salamanca, Mexico, employing 4,500 workers to build the Mazda2 and Mazda3. Toyota will take some of the Mazda factory's production.

Nissan is building a $2 billion plant in Aguascalientes, Mexico, to build small cars. It will have 3,000 employees and begin production in November. Audi will assemble the Q5 crossover at a new plant in San Jose Chiapa, Mexico, that will employ 3,000.

John Casesa, head of the automotive practice at Guggenheim Partners, says the trend will continue because the Detroit 3 were slow to counteract competition from abroad.

"It took a very long time, over a quarter of a century, for the start date of the serious Detroit restructuring efforts," he said. "That gave [the transplant companies]a lot of time to gain share and build production here.

"The economic reality of the auto business is that it is most efficient to produce cars in the markets where they are sold, and that is what has drawn all these automakers to the U.S."