November 1, 2017

Automotive investment in Kentucky surging in 2017 with aluminum, steel, plastics

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As automakers employ more lightweight materials to improve their vehicles’ efficiency, Kentucky has clearly become a go-to location for companies that produce parts, assembled components and entire vehicles.

This year, through the end of September, the numbers are eye-popping: 30 new motor vehicle-related projects plan to invest $4.1 billion in new facilities and existing-plant expansions, creating more than 3,400 full-time jobs.

State leaders credit Kentucky’s improved business climate and strategic location for attracting investments from automotive parts suppliers, which often function as both customers and vendors for other members of the automotive industry.

The new and expanding facilities join one of the commonwealth’s strongest industries and a key pillar in Kentucky’s broader manufacturing sector. The state’s automotive industry alone includes more than 500 facilities employing 100,000-plus people full time.

A few mammoth projects boosted this year’s numbers. Toyota Motor Manufacturing Kentucky Inc., and Gov. Matt Bevin announced in April the automaker will spend $1.3 billion to revamp its Georgetown plant. And, in late September, Toyota said it plans to increase the plant’s engine-building capacity with an additional $121 million investment.

Braidy Industries will pour $1.3 million into aluminum melting and rolling mill in northeast Kentucky near Ashland. The massive industrial project will create a projected 550 new jobs and produce aluminum sheet and plate for the automotive, aerospace and defense industries.

Ford Motor Co. will invest $900 million into its Kentucky Truck Plant in Louisville, to support production of the 2018 aluminum-alloy bodied Lincoln Navigator and Ford Expedition. The new-generation SUVs move to high-strength aluminum-alloy bodies cut weight, and increase capability, performance and fuel economy.

In addition to these outsized investments, this year is seeing more than two dozen projects by a wide range of automotive suppliers. Their galaxy of parts products include glass and mirror-systems, bearings, rubber moldings, braking systems, fully assembled interior components, forged aluminum suspension components, springs, hose clamps, aftermarket performance parts, steel pickup frames and bonded rubber components for noise, vibration and shock control.

The list includes several all-new facilities, demonstrating how companies view Kentucky as a prime place to manufacture and efficiently distribute their products to new markets.

Two announcements made earlier this year that illustrate the point:

Stratus Plastics International Inc.

The privately held Canadian company, which produces automotive and consumer goods, will spend nearly $4 million to acquire a 165,000-square-foot factory in Western Kentucky’s Butler County.

Stratus’ new Morgantown facility, its first in Kentucky, will operate as Stratus Plastics KY LLC.

Windsor, Ontario-based Stratus supports multiple tier-one automotive suppliers as well as non-automotive customers. Its Windsor operation offers injection-molding capabilities, state-of-the art machining, 3D printing, robotics and auxiliary processing equipment.

The Morgantown plant will allow the company to focus on supplying the automotive and appliance industries in the US Southeast and Midwest as part of its plan to become an established global leader in injection molding.

“The decision by Stratus executives to locate in Butler County further strengthens Kentucky’s manufacturing base, and its facility will be a great addition to the region’s economy,” Gov. Bevin said. “Our state’s leadership in the automotive industry is increasingly well recognized in North America and around the globe.”

Adkev Inc.

If Boyle County officials are having visions of butterflies, perhaps it’s because this family-owned Indiana company plans to spend nearly $16 million to revamp a Danville plant that was recently vacated by Caterpillar Inc.

Gary and Cathleen Rheude founded Adkev 30 year ago in their hometown of Goodland, Ind., between Indianapolis and Chicago. The company, which manufactures plastic injection molding for automotive, appliance and industrial uses, has grown into one of the nation’s top 100 molders out of thousands ranked by the industry publication Plastics News.

Adkev currently employs 350 people at plants in Goodland and Monticello, Ind. Company leaders are set to buy the 190,000-square-foot Danville facility, where it will make automotive HVAC, electronic and trim components there. The project is expected to create 70 full-time jobs.

Adkev plans a mid-2019 opening after refurbishing the facility that will provide greater access to the Southeastern U.S. market and improve proximity to customers.

“Expanding into a third facility in the Southeast region is in response to our core mission to provide stability and opportunity to our employees, communities and customers,” Rheude said.

Danville Mayor Mike Perros said the announcement comes at the perfect time, as the local workforce looks for new opportunities.

“Adkev’s investment captures a superb manufacturing facility just as Caterpillar transitions out of it,” Perros said. “This new industry will also produce job opportunities for area workers impacted by corporate business changes leaving to closures at both Caterpillar and Panasonic.”

Click here for a full report on new investments in Kentucky’s automotive sector.

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