Missouri is home to more than 100 auto manufacturers, including Ford and General Motors. The automakers are investing more than $1 billion dollars into their Missouri operations.
Ford recently announced plans to build its new E-Transit van in Kansas City, Missouri. The auto giant already manufactures the Ford F-150 at the Missouri plant. On the other side of state, near St. Louis, General Motors builds several vehicles, including the Chevrolet Colorado and GMC pickups and vans. In 2019, GM announced plans to invest $1 billion in its Missouri plant.
Our CEO, Subash Alias, joined the Automotive News team for its Daily Drive podcast to discuss why Missouri is appealing to automakers and suppliers, and how the state supports its auto manufacturers. We’ve highlighted a portion of the interview below. You can listen to the entire podcast here.
Automotive News: So, big news from Ford Motor Company recently, $100 million investment into the Kansas City plant to support the upcoming E-Transit van. What’s that mean for the state of Missouri?
Subash Alias: First, from an economic development standpoint, we’re all about jobs and investment. This news is about as good as it gets. Given the large role the automotive industry plays in Missouri’s economy, we are thrilled that Ford is doubling down in our state. Right now Ford employs over 7,000 people at the Kansas City plant in Claycomo. The plant already makes the wildly successful Ford F-150 and of course this gasoline transit program, another huge seller, started in Claycomo a few years ago. So, having two very successful programs in one plant helps cement Ford’s already sizable investment in our state. This is testament to both the good people working at the plant and the supportive automotive ecosystem we have in Missouri.
Automotive News: You had mentioned early on that the economic impact in Missouri is all about bringing about jobs, an important factor in this discussion. I think Ford is estimating 150 new jobs as a result of this investment. Overall, what is the economic impact that the state of Missouri is expecting from this investment?
Subash Alias: I think what sometimes gets lost in some of these major economic development news stories is what that spillover benefit could mean for an economy. This generation transit itself is a relatively new van, so I think it started as a 2015 model year vehicle. But, a couple years before that release, we saw a healthy amount of new supplier activity coming to the Kansas City region along with the retooling that Ford did to accommodate the transit as a new model. So, some of that activity included new upfitters to accommodate various customer segments. Ford noted that E-Transit will continue to allow for some of the same dimensions that some of these upfitters are already accustomed to. That means it could be rather seamless for these existing upfitters to increase their production for an anticipated increase in sales. In other words, they may be able to serve the same markets without having to retool themselves. That’s great news for us because a lot of these upfitters also employ Missourians. It may be too early to tell, but we could potentially see hiring by the nearby upfitters or the suppliers to support this new investment by Ford.
Automotive News: So, let’s dive a little bit further into that, when you think about the basis for competition, if I’m an OEM, if I’m a supplier and thinking do I make investments into a state whether there are existing facilities, whether there are new facilities, you think about workforce, you think about access to, you know, highways and waterways etc. Why is Missouri interesting for automakers? What’s Missouri’s competitive advantage?
A: In addition to being centrally located, we’ve got attractive electric rates. Missouri is an automotive state. There’s an ecosystem here. In addition to the Ford F-150 and Transit and soon to be E-Transit, Missouri also has a GM plant on the eastern side of the state in Wentzville just outside of St. Louis. So there, they make the Chevy Colorado and the sister vehicle, the GMC Canyon, two very successful mid-size trucks. And in the Wentzville van plant, they make the Chevy Express and GMC Savannah full-size vans. So, coincidentally two different automakers, this is kind of interesting, make both trucks and vans in two different plants on two different sides of the state. Last year, we produced over 770,000 vehicles at both of those plants. If you look at the two major metro areas, from Kansas City on the western side of the state, so that includes Kansas and Missouri, all the way to St. Louis on the eastern side of the state, which would include both Missouri and Illinois, we have seen a combined $5 billion in auto investment in the last decade.
Automotive News: The state is also home to Boeing, it’s also home to Enterprise, right? It just seems to me that as we look at the future mobility and we see all of this ecosystem kind of coming together and working collaboratively, there’s a lot of competitive advantage that Missouri offers.
Subash Alias: We do have a long-term strategy when it comes to automotive manufacturing and manufacturing in general and really supporting mobility and advanced manufacturing. My organization, we work to attract new companies, but a big part of really supporting that ecosystem is encouraging and taking care of who we already have in the state, taking care of our existing industries. To encourage OEM investment in the state, the state legislature passed, and Governor Mike Parson signed a really attractive automotive incentives bill to entice very large-scale investments by automakers. Part of that bill included some really robust workforce development programs that foster the recruitment and training of highly sought-after positions such as the types of positions needed with OEM’s and auto suppliers. I think anyone that is listening and is working in the auto industry knows that we have a significant skills gap in this country. Unfortunately, we have many open, unfilled positions all over the country, but not enough workers to fill them. We took a look at our workforce development programs and saw that we needed to enhance them. And that’s why I would say that workforce development is at the heart at our kind of economic development growth strategy to support auto and all industries, frankly.