New auto plants open doors despite cutbacks
— -- While Detroit automakers close factories and zap jobs in the face of the dramatic drop-off in U.S. auto sales, Asian and European rivals continue to add plants in the U.S. and Canada.
Toyota opened a plant this month and Honda one last month even as both pare production at existing plants. Hyundai has snipped production even as it works on a new Kia plant in West Point, Ga., to open late next year.
Overcapacity "is hitting everybody," says Ron Harbour, partner at consulting firm Oliver Wyman. "It is an industry problem because the economy is in the tank."
No-layoff policies soften the production cuts for workers at some U.S. plants of foreign brands. Toyota's permanent workers, for instance, are paid on shutdown days and take training classes or perform maintenance. The Detroit 3 and the United Auto Workers union have been criticized for a similar but more formal program called the jobs bank while they seek a federal bailout.
"Toyota has more people in its jobs bank than the Big 3 do, but they don't call it a jobs bank," says Dave Cole of the Center for Automotive Research.
Cutting even as some add capacity:
•Toyota. Production cuts of up to 10 days this month and next will halt key plants in North America. The plants, making Camrys to SUVs, are in Georgetown, Ky.; Princeton, Ind.; the Toyota/General Motors factory in Fremont, Calif.; and Canadian plants, including the Woodstock, Ontario, plant that opened Thursday.
A Blue Springs, Miss., plant to make Prius, set to open in 2010, could be delayed, says Craig Hutson, debt analyst at Gimme Credit, in a new report.
•Honda. Even as a plant for four-door Civics opened last month in Greensburg, Ind., Honda announced non-production days for other plants. The Greensburg plant runs on a single shift. Another may be added next year, spokesman Edward Miller says.
•Mercedes-Benz. The Vance, Ala., factory is shuttering for two days this month and two weeks in January.
•Hyundai. The South Korean maker of Hyundais and Kias has sharply cut production at its $1.4 billion factory in Montgomery, Ala.
