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Key vehicles generate K.C. supplier boom

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KANSAS CITY, Mo. — Supplier factories are multiplying rapidly in suburban Riverside, Mo.

Riverside is a short drive from two major auto assembly plants: General Motors’ factory in Fairfax, Kan., and Ford Motor Co.’s operation in Claycomo, Mo. Suppliers are converging here because key vehicles are reinvigorating Kansas City’s auto manufacturing.

  • The new Ford Transit commercial van began production last year in Claycomo.
  • The aluminum-bodied Ford F-150 pickup started production this year in Claycomo.
  • The redesigned 2016 Chevrolet Malibu is to begin output in October in Fairfax, while the Malibu’s sibling, the next-generation Buick LaCrosse, is due to crank up in the fall of 2016.

Eleven suppliers — some with contracts for both Ford and GM — have opened plants in the area since 2013, generating 1,800 jobs and $75 million in new payroll, according to Chris Gutierrez, president of KC SmartPort, an economic development organization that focuses on logistics investments.

Among those suppliers and their products:

  • Grupo Antolin, headliners.
  • Inergy Automotive Systems, fuel tanks.
  • Martinrea International, engine cradles and other steel parts.
  • US Farathane, plastic injection-molded parts.
  • Yanfeng USA, floor consoles, instrument panels and door panels.
  • LMV Automotive Systems, a unit of Magna International Inc., stamped and welded underbody assemblies for the Transit.

Many suppliers received contracts for all vehicles produced in area factories and built plants here to be nearby.

“This facility was put here for the Malibu,” says Rocco Marinaccio, Martinrea director of modular assembly. London, Ontario-based Martinrea’s strategy to win the Malibu contract was based on sending engine cradle parts to Kansas City and assembling them here, rather than assembling the cradles hundreds of miles away from the Fairfax plant and shipping them whole, which would have meant lots of air in the shipping containers, he says.

GM spokesman Klaus-Peter Martin said the company does not comment on specific arrangements with suppliers, but he said: “Wherever it makes sense, we encourage our suppliers to locate their production as close as possible to our plants.”

Last year, GM called on suppliers to build factories close to GM assembly plants, part of a drive to cut $900 million a year from its North American logistics spending.

Kansas City’s place as a hub for Ford, GM and their suppliers did not seem so secure a few years ago. In 2010, for instance, Ford said it was moving Escape crossover production to Louisville, Ky., from Claycomo. It wasn’t until 2011 that Ford ended the suspense by saying it would build the Transit in Claycomo.

“We were very fearful of what was going to happen, especially when they moved the Escape out,” says Gutierrez. “We were very fortunate GM and Ford both reinvested.”

The governments of Missouri and Kansas have aggressively pursued further automotive investment.

Said Missouri Gov. Jay Nixon at the opening of US Farathane’s plastic molding plant this spring: “If there’s an auto plant being built anywhere, we’re going to compete for it.”

[Automotive News]