Auto gathering weighs recovery prospects

Auto gathering weighs recovery prospects

October 29th, 2009 in Businesstopstory

Ted Pratt of Honda's manufacturing plant in Lincoln, Ala., says it's been a tough 18 months for the auto industry amid the worst economic downturn in decades.

"A number of manufacturers are trying to read and determine where the market is going," he said. "The market we had three years ago has changed dramatically."

Mr. Pratt and about 500 other auto industry veterans are taking part in a two-day conference in Murfreesboro, Tenn., that will try to answer questions facing car companies, suppliers and economic development officials.

The Southern Automotive Conference that opens today is expected to draw companies from across the country and Canada.

Joe Conner of the Chattanooga office of the law firm Baker, Donelson, Bearman, Caldwell & Berkowitz said the Tennessee Automotive Manufacturers Association's membership has probably doubled in the past year.

"It's amazing to me to see new companies at the meetings," he said. "Many are trying to get into the game in what form the new supplier network is going to take."

Mr. Conner, whose firm does legal work for auto industry companies and is helping present the conference, said many new companies in the trade association are from out of the state.

They are interested in "how do you survive. ... Where are you going to be when the upcycle comes and how (can the company) stay viable?" he said.

Matt Kisber, Tennessee commissioner of economic and community development, said it's no secret the last year was challenging for the auto industry.

But the Southeast continues to differentiate itself as the region most attractive to automakers and suppliers planning for long-range growth, he said.

While the cash for clunkers incentive program gave automakers an uptick this summer, many experienced a drop in September.

Last month, 22.7 percent fewer cars were sold in the American market than in August, with General Motors and Chrysler suffering steep declines.

Volkswagen, building a plant in Chattanooga, reported its sales were 1.5 percent higher in September in the U.S.

"Some companies experienced losses above 40 percent," said Frank Fischer, chief executive of VW's operations in Chattanooga. "VW was in a lucky position to have a slight increase in sales."

Still, year to date, the automaker's sales are down 8.9 percent.

AUTO MEETING

Southern Automotive Conference:

* Friday: Industry analysts, state economic development officials, company reps talk about the auto business.

* Saturday: Volkswagen's Chattanooga CEO Frank Fischer outlines VW's plans.

* Monday: Officials for major auto companies with plants in the South talk about its continuing shift to the region.


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