Auto supply chain fuels the Kansas City economy

A Ford Motor Co. vice president on Wednesday used phrases such as “unparalleled work ethic,” “seamless cooperation” and “the ultimate, integrated supply chain” to explain why the vehicle manufacturer is very, very happy with the Kansas City Ford Assembly Plant at Claycomo.

Birgit Behrendt, Ford’s vice president for global programs and purchasing operations, led off an automotive supply chain briefing saying exactly what Kansas City economic developers want to hear.

The Kansas City plant, she told more than 400 people at an industry briefing sponsored by KC SmartPort at Bartle Hall, is turning out the F-150 pickup truck and the Transit van, which are “a backbone” of Ford’s growth in a “world-class logistics hub.”

The Ford plant’s 7,000 jobs — coupled with 3,600 jobs at the General Motors Fairfax Assembly Plant in Kansas City, Kan. — have an economic multiplier effect that benefits the entire metro region.

Behrendt said research indicates that each assembly plant job generates nine additional jobs in automotive supply companies, construction, health care, schools, real estate and other positions.

Behrendt, like other Ford executives in recent days, said the company has a positive outlook for 2015 sales, including for the newly redesigned F-150. That outlook is despite lower first-quarter sales reported Tuesday.

Chris Gutierrez, president of KC SmartPort, an affiliate of the Kansas City Area Development Council, said 11 new auto industry suppliers have created 1,800 jobs with a total payroll of $74 million in the Kansas City area in just the last few years.

Ford has poured $1.1 billion into expansions at Claycomo, and GM has upgraded the Fairfax plant with a $700 million investment, Gutierrez said of recent assembly plant upgrades.

Kim Hill, director of economic development strategies at the Center for Automotive Research in Michigan, said industry analysts consider Claycomo’s three shifts to be “running at more than capacity,” signaling its importance to Ford.

But Hill and Brandon Podolski, a partner in a real estate site selection company, emphasized that no plant and no city can rest easy. Auto manufacturers continually re-evaluate product strengths and locations, and sites succeed by being ahead of consumer preferences.

A panel of speakers nonetheless said repeatedly that the Kansas City area is well positioned for continued auto industry strength. In particular, they said, a host of suppliers that make vehicle components have chosen to locate in the area because of proximity to the Ford and GM plants.

The area’s strong rail and highway network also creates a logistical dream for developers marketing the area, Podolski said. If there’s a particular challenge to sustain that kind of growth, he said, it’s to encourage more speculative development of large warehouse-style buildings that can accommodate heavy supply chain machinery.

That means having inventory ready in industrial parks that, for example, have 8-inch poured concrete floors instead of 6-inch, or no poured floor at all, to be able to quickly meet a manufacturer’s needs.

“Our clients don’t always have time for build-to-suit,” Podolski said. “You need to have inventory.”

Aside from available real estate, several speakers at the briefing emphasized the value of a workforce with a strong work ethic. Workers with necessary skills, such as welding and robotics, are desperately needed, they said. But it’s equally important to have good training programs in place in the area’s colleges and agencies to train workers who are willing and eager.

This story was originally published April 29, 2015 at 11:50 AM.