The heads of auto plants in Alabama and Mississippi spoke candidly about the challenges and successes of building cars in the South during the 2014 Southern Automotive Conference at the Birmingham-Jefferson Convention Complex.

Jason Hoff, CEO of Mercedes-Benz U.S. International in Vance; Jeff Tomko, president of Honda Manufacturing of Alabama in Lincoln; Jim Bolte, president of the Toyota Motor Manufacturing Alabama engine plant in Huntsville; and Donald Stoegbauer, director at Nissan North America in Canton, Miss., made up the panel moderated by Bill Taylor, president of the Economic Development Partnership of Alabama.

The panelists seemed to agree that being part of the auto industry’s emergence in the South has been beneficial to their operations versus other regions of the country. However, that doesn’t mean it has been without challenges.

For instance, the automakers know they are putting intense pressure on their suppliers to produce parts that meet their quality standards at the lowest possible price and with the speed to meet demanding production schedules.

“The complexity of producing three different models at the same time and have a changeover without quality issues is a challenge for us and we know it is for our suppliers as well,” Tomko said.

In a world filled with product recalls, often over a single part, automakers work more closely than ever with suppliers to keep quality at a high level.

“Think about where we’ve come as it relates to quality,” Stoegbauer said. “The bar has been raised and that applies to us and our suppliers.”

All involved with producing vehicles have to share the goal of satisfying the customer, Bolte said.

“We are trying to build the safest, highest-quality, best-value vehicles we can,” he said.

They do that by hiring and training the best employees and constantly challenging them to remain motivated, safety conscious and innovative.

In the case of the Mercedes, Hoff said they take time to celebrate milestones and vehicle launches and make sure team members take part. They send workers to Germany for training when necessary and reward workers who come up with ways to improve the manufacturing process.

Tomko said the company’s community involvement and that of its employees go a long way in building camaraderie.

“They really love to see our corporation give back to the community,” he said. “That buys a lot of loyalty.”

When it comes to managing their plants, all agreed that more is accomplished by spending time on the assembly line than in the boardroom.

“I can sit in the office and read a report, but to get up and to go the floor to see it is immeasurably more impactful,” Bolte said.  Hoff agreed.

“When you get out on the floor and see the light in their eyes, I can’t think of anything more rewarding than that,” he said.

Tomko said he believes employees appreciate seeing management on the factory floor and genuinely seeking their input about the process. Employees provide the most important feedback, he said.

“That information is absolutely invaluable,” Tomko said.

Bolte said it is important that every employee feels empowered to do what is necessary when it comes to both safety and quality. He said Toyota workers know they can stop the production line at any time.

“There is always enough time to do the right thing,” he said.

The executive panelists said they prefer workers feel free to challenge the status quo and share their ideas.

The automakers have developed strong worker and management training programs, often teaming with two-year and four-year colleges in their communities and across the state.

Global competitiveness creates a need for constant improvement at their Southeastern plants, the panelists said. Mexico’s emergence in the region is adding to that competition, they said.

Hoff said some second- or third-tier suppliers – those that supply other suppliers or produce parts not required for just-in-time delivery at the original equipment manufacturer plant – may find locating in Mexico an option. But states that are more competitive in their economic development efforts, like Alabama, can still land those important supplier plants and the jobs they bring.

Since Mercedes first started producing vehicles in 2007, the automotive industry in Alabama has grown to more than 50,000 direct jobs and nearly $8 billion in capital investments. The automotive industry has become the key driver to economic development in Alabama, said Ken Novak, vice president of Economic and Community Development at Alabama Power Company.

“It’s hard to imagine a single industry being as important to Alabama over the past two decades as the automotive industry has been,” he said. “The Southeast in general and Alabama in particular are home to some of the greatest automakers in the world. The automotive supplier companies are also second to none.”

Mercedes-Benz recognizes the significance of Alabama’s role in the global industry. Hoff said with the possible exception of its China plant, Mercedes has invested more in its Vance plant than any of its other operations in the world.

–Mike Tomberlin