Commonwealth ready to support EV-related growth
Kentucky is at the center of an automotive revolution
As automakers across the globe position themselves for a future that relies more heavily on electric power, the Bluegrass State has taken steps over the past year to ensure its place as a premier location for automotive-related production for decades to come.
The Commonwealth experienced a record year for economic development success in 2021. That included all-time highs for job creation and new investments with more than 18,100 full-time jobs announced across 264 private-sector, new-location and expansion projects totaling over $11.2 billion in investments. On top of that, Kentucky’s 2021 average incentivized hourly wage was $24 before benefits, which represents a 9.4 percent increase over the 2020 figure and stands as the second highest in a seven-year period.
The state’s automotive sector is a pivotal part of that record-breaking momentum, with motor vehicle-related companies committed to invest $6.7 billion across 42 new-location and expansion announcements with nearly 7,300 full-time jobs expected in the years ahead.
“Kentucky’s success within the automotive sector is no secret, but we’re building on that well-established foundation and taking it to the next level in the years ahead,” Kentucky Gov. Andy Beshear said. “The automotive landscape is rapidly changing as companies prepare for an electric future, and that extends to companies located in or considering the commonwealth. We are prepared to accommodate this growing industry as it continues to evolve. Kentucky is a major player within the automotive sector, and the growth we have seen over the past year means that will continue to be the case for generations.”
Kentucky’s automotive roots date back to 1913, when the first Model T rolled off the assembly line at Ford Motor Co. in Louisville. In 1981, General Motors established its Bowling Green assembly plant as the exclusive home of the Corvette, producing over one million vehicles in the three decades since. In 1988, Toyota took motor vehicle production in Kentucky a step further with the opening of Toyota Motor Manufacturing Kentucky Inc. (TMMK) in Georgetown. In the years since, auto suppliers have located in Kentucky with increased frequency – more than 200 in total – with automotive-related facilities operating in roughly half of Kentucky’s 120 counties.
This past September, the next game-changing automotive project was announced in the commonwealth, as Governor Beshear joined executives from Ford Motor Co. and SK Innovation to announce BlueOvalSK Battery Park in Hardin County. The transformational $5.8 billion project will create 5,000 jobs in the heart of the state and position Kentucky to remain a premier destination for growing auto-related businesses for decades to come.
BlueOvalSK will be home to two electric battery plants to power the next generation of Ford and Lincoln electric vehicles, which Ford leadership anticipates will make up at least 40 percent of the company’s global sales by 2030. Production of advance lithium-ion batteries is set to begin in 2025.
The project builds on Ford’s already significant presence in Kentucky, which includes approximately 13,000 employees across two Louisville operations. Opened in 1955, the Louisville Assembly Plant assembles the Ford Escape and Lincoln Corsair, and the Kentucky Truck Plant, opened in 1969, assembles Ford Super Duty Trucks, the Ford Expedition and the Lincoln Navigator.
Existing operations have an eye on the future
The industry’s shift toward electric power is also apparent through the growth of numerous other companies across the commonwealth. In October, TMMK announced a $461 million reinvestment that will transition 1,400 team members from indirect roles to direct Toyota positions. The project will provide facility upgrades, including preparation for future vehicle electrification, while increasing operational speed and flexibility to allow the operation to produce new vehicles in the future.
TMMK currently produces approximately 600,000 engines and 550,000 vehicles annually, including America’s best-selling sedan (Camry) and best-selling SUV (RAV4).
Meanwhile, Nemak Kentucky plans to invest $27 million and create 170 jobs at its Glasgow facility to support future electric vehicle-related business. A subsidiary of Nemak USA Inc., the company has manufactured innovative lightweight products for powertrain, e-mobility and structure applications in Barren County since 2012. Like many growing auto-related companies in the state, Nemak also is expanding its partnership with local colleges, teaming with Southcentral Kentucky Community and Technical College and Western Kentucky University to increase training efforts for current and new employees.
New parts production is expected to begin by Q3 2022
“Nemak is rapidly increasing our EV-related programs in order to support our customers in their mission for an all-electric future and a more sustainable mobility,” said Luis Peña, Nemak business unit director, USA. “Having the opportunity to expand our footprint at an existing plant aligns strongly with our commitment to our people and the communities in which we operate.”
That commitment to community holds true for Firestone Industrial Products as well, which broke ground on a $50 million expansion in Williamsburg in August. The 68,000-square-foot addition to the existing 375,000-square-foot facility will create 250 full-time jobs to support the company’s growing presence in the EV market. A manufacturer of automotive air springs, Firestone has operated in Southeastern Kentucky since 1989, currently employing more than 500 people.
Emily Poladian, president of Firestone Industrial Products, at the time of the groundbreaking said the operation will be instrumental in the company’s plans to serve a growing number of EV-related customers.
“Today, we celebrate the vitality and growth of this plant and this community, with new investment, new jobs and a physical expansion driven by growing demand for our products and, just as fundamentally, by this team’s commitment to delivering innovation and superior quality for our customers here and around the world,” Poladian said. “Our company and our Kentucky team have a vital role to play in the transformation of mobility brought forth by advanced electric vehicle systems and by key supporting technologies like our Firestone air springs and air suspensions.”
Logistics sets the stage for continued growth
One of Kentucky’s greatest strengths – and a driving force behind the long-term growth of the state’s automotive industry – is logistics and the state’s ideal geographic location.
The Commonwealth is at the center of a 34-state distribution area in the Eastern U.S., and its borders lie within a day’s drive of more than two-thirds of the nation’s population, personal income and manufacturing operations. This advantageous placement provides unparalleled distribution benefits for Kentucky’s businesses, including automakers and suppliers.
With 20 interstates and parkways, over 2,600 miles of freight rail and more than 1,900 miles of navigable waterways, Kentucky companies can ship products anywhere in the world, allowing automotive-related businesses to get products to their destination quickly and efficiently.
That strength in logistics – along with low business costs and efforts to boost the availability of quality sites and buildings throughout the state – combined with a proactive approach to the rapidly changing automotive industry, helps ensure the future of the automotive industry is in Kentucky.