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Local auto supply jobs get boost from sales rebound

Clark, Champaign workers benefit.

KTH is already one of Champaign County’s largest employers, but last fall the company announced plans for a roughly $29 million expansion to create as many as 90 new full-time jobs and add more than 40,000 square feet to the plant near St. Paris.

It’s one example of how a rebounding auto industry rippling through the region has translated to more orders — and greater hiring — at local companies that supply parts.

U.S. auto sales have now climbed four consecutive years to 15.6 million vehicles sold in 2013, according to Autodata Corp. That was the most since 16.1 million passenger cars and light trucks sold in 2007.

Ford Motor Co., General Motors Co., Honda of America Manufacturing Inc., Toyota Motor Sales U.S.A. Inc., Mitsubishi Motors North America Inc. and other major carmakers have suppliers embedded locally to provide parts to assembly plants in Indiana, Kentucky and Ohio.

KTH Parts Industries supplies auto body frame assembles for Honda at its facility on Ohi0 235. The company is currently working on an expansion that includes adding more space for storage, adding training and locker rooms, a trailer yard expansion and space for a 3,000-ton servo press designed to produce strong but lightweight auto parts as Honda tries to improve gas mileage and crash test ratings.

KTH’s recent success is closely linked to gains at Honda, said Art Liming, vice president and plant manager for the company.

“We wouldn’t be busting out the walls if it wasn’t for the capacity forecasts that we see with them,” Liming said of Honda. “They happen to be our only customer at the moment, so all of our plans here are certainly tied to what they are forecasting.”

After consumers delayed car purchases for several years, job growth, rising property values and a strong stock market drove car buyers back to dealerships, said Alec Gutierrez, senior analyst for Kelley Blue Book, a California company that publishes data comparing car values. Kelley Blue Book is a subsidiary of AutoTrader Group. Cox Enterprises owns a majority stake in AutoTrader, and owns this newspaper.

“Those consumers that have come back to the marketplace have been a significant boom to the industry in 2013,” Gutierrez said.

“The fact that we are now back to the type of sale volumes that was part of the norm prior to the recession says the economy and the auto industry is getting back to full recovery,” Gutierrez said.

Honda spokesman Ron Lietzke said the Japanese company’s Ohio assembly plants have returned to pre-recession production levels. Honda’s U.S. sales totaled 1.5 million vehicles in 2013, up more than 7 percent from the year before, according to Autodata.

“We’re coming off a year of very good production and sales. What it does at least for us is sustain our production,” Lietzke said.

Other auto suppliers across the Miami Valley are seeing similar success.

Canadian company Advanced Design Solutions Inc. opened in 2011 a Middletown location on Reinartz Boulevard. Workers make steel material handling racks used by automakers to ship body panels, bumpers, gloveboxes and other car parts.

When Honda, GM, Chrysler and other customers launch a new car model, Advanced Design is contracted to make racks designed to hold those car parts. And the more cars the auto companies expect to sell, the more racks they order, said President and Founder Mark Booker.

The same growth seen at Advanced Design is happening at other local manufacturers recovering from the recent recession of Dec. 2007 to June 2009.

In St. Paris, Liming said it’s possible the company could exceed the 90 full-time positions it expected to create as part of the expansion. Some of those are highly skilled positions that are sometimes difficult to fill. Honda has a significant footprint in Ohio, and any additional investments the company makes could potentially lead to additional jobs as well, Liming said.

“We’ve continued to have a good number of hires, and we’ll be on track for that,” Liming said. “With our economy still plugging, we’re ready for them to announce something any day that could increase that even more.”

Honda also plays a significant role in Clark County, providing numerous jobs directly for local employees, but also indirectly at several other manufacturing firms across that county that supply a variety of parts for the company, said John Detrick, Clark County commissioner.

In Clark County, Trutec performs heat treating for steel components found in automotive parts such as transmissions and brake assemblies, along with working with customers in other industries. Trutec has not necessarily seen a direct impact from the auto industry’s rebound, said Joe Gummel, the company’s vice president.

However, he said the company’s business has picked up since the worst of the recession.

“I expect most suppliers to Honda have seen steady business because manufacturing has been stronger for really two to three years,” Gummel said.

Analysts at Kelley Blue Book are forecasting sales of 16.3 million vehicles in 2014. Sales are expected to grow 4.3 percent, compared to 7.6 percent in 2013.

“I think we can look at ’14 and assume it’s going to be more competitive,” Gutierrez said.

“All the automakers have put such a renewed focus on engineering and ensuring they’re delivering quality products … it will be competitive and far more difficult for automakers to grow market share,” Gutierrez said. “In terms of selection, consumers have more credible options than they have in the past.”

The automakers will not want to fall in the trap of overproducing, and then pushing price deals to move inventory at the end of the year, he said.

“The question remains as to whether or not they’ll be able to manage production and be able to pull back when necessary if sales don’t live up to expectations,” he said.

Liming said companies like KTH were hit hard early in the recession, but so far have also rebounded more quickly than in some other industries.

“Maybe coming out of the worst part of the recession the auto industry seemed to be the one that benefited with those increased sales again,” Liming said. “Maybe the automotive side suffered first and so we were one of the first back.”

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