More Camry production
In related news, Kia has selected Georgia as the site of its first North American assembly plant. Kia had been strongly wooed by the state of Mississippi, but the new Kia assembly plant will be built in West Point instead, on the western edge of Georgia. The Korean automaker will invest 1.2 billion dollars to get the facility up and running, and plans to employ about 2,500 people when it starts operations in 2009.
DaimlerChrysler is making investments in production facilities, too, but not in North America. Instead, the company’s Toluca, Mexico assembly plant is getting a one billion dollar upgrade, including two new industrial parks to serve suppliers. Toluca has produced more than one million PT Cruisers, and will be re-tooled to make the PT Cruiser’s replacement – and to be more flexible so that it can react quicker to market shifts.
Fuel prices and E85
Toyota Camrys, Kias, and small Chryslers all get decent fuel economy, which continues to be a consumer hot button because fuel prices continue to fluctuate. Last week, despite a drop in the cost of crude oil, gas prices rose nearly a dime, according to the Automobile Association of America (AAA). The average price for a gallon of unleaded last Friday was $2.35. One year ago, it was $2.00.
To help Americans find ways to curb their dependence on foreign oil, Ford Motor Company’s vice president of environmental and safety engineering, Susan Cischke met with members of Congress this week. She explained that oil companies need to install thousands more ethanol pumps to feed the increasing numbers of E85-capable vehicles on the market. With millions of the cars, trucks, and SUVs already on the road, and millions more to come, the nation’s 600 E85 fuel pumps aren’t near enough.
The American Petroleum Institute says that an E85 pump and the underground tank used to store the ethanol-based fuel would cost $200,000 to install, a large investment to make for a product without a guaranteed market. Ford claims that if the six million E85-capable vehicles that have already been produced could be fueled properly, 2.5 billion gallons of traditional unleaded could be saved, cutting the country’s dependence on foreign sources of crude oil. Given ExxonMobil’s recent record-shattering quarterly profit results, we’d say there’s no reason more E85 pumps cannot be installed. Pick a few high-volume gas stations in major metro markets, advertise the fuel’s availability, and when cars and trucks line up to get E85, the business case will prove itself.
GM recalls trucks
Meanwhile, the UAW continues to fight GM and its major parts supplier, Delphi, which has declared bankruptcy. GM lost 8.6 billion dollars in 2005, and a strike by workers at Delphi could essentially shut the automaker down, forcing it to burn billions more for every week it isn’t producing cars and trucks. The news gets worse: union members at several Delphi plants around the country have already authorized such a strike. At issue: retirement benefits, early retirement incentive plans, lower wages, and job cuts. GM’s salaried employees and executives see the writing on the wall and took steps this week to slice $1.6 from the company’s pension liability this year as it shifts more of the retirement burden onto workers and 401K programs. By contrast, the UAW apparently believes that it is better for its members to have no job and no benefits rather than some jobs and some benefits.
Hey, we hear that Toyota and Kia are in need of a few good men and women.
Photos courtesy of the automakers