We've all seen the ads; "0 percent financing on a brand new car." While this and other low-interest loans add up to nice incentives for consumers who seem shy to spend, it doesn't necessarily pan out into profits for the automakers and the suppliers behind the scenes.

The automotive industry benefited from a strong economy and growing sales over the past several years. Last year at about this time, sport-utility vehicles (SUVs) were all the rage and auto plants were expanding to keep up with demand. Mega mergers were taking place between the top dogs in the industry, and the auto industry outlook seemed rosy.

However, the tragic events of Sept. 11, coupled with a crawling economy, have caught up with automakers and suppliers. While industry experts say there are bound to be some rocks in the road, they also say that industry players are filled with resolve to forge ahead to better days.

Proximity to customers is the name of the game

Much of the automotive industry story revolves around the suppliers. The automakers continually call upon their suppliers to take on more and more responsibility when it comes to the design and production of vehicles. And the suppliers answer the call time and again.

Suppliers across the board are now involved more than ever in delivering modules and systems to their customers, rather than simple components. Because of this trend, suppliers usually have little choice but to locate near their customers, and conduct their operations under the just-in-time (JIT) strategy.

Rather than keeping large amounts of inventory on hand, automakers usually prefer to receive the module or system and place it directly into the vehicle. Off the truck and into the car, you could say.

For most automotive suppliers, like FIC America Corp., a division of Japan-based Futaba, location is what it's all about.

The company announced in early November that it would build a 125,000 square foot plant in the Vincennes Commons/U.S. 41 Industrial Park in Vincennes, Ind., just north of Toyota's plant in Princeton, Ind. FIC America, which manufactures internal door frames for the Princeton plant, plans to hire about 70 people.

Southeast is the place to be

While the Upper Midwest is a long-standing automotive strong- hold, the Southeast boasts its own cluster of success stories.

Roanoke Valley's Koyo Steering Systems of USA Inc. is just one automotive company turning heads in the Southeast.

The Japanese company recently began shipping its Electric Power Steering systems from its Virginia operations to the Saturn plant in Spring Hill, Tenn.

The contract became a reality between the two companies when Koyo proved that it could fulfill Saturn's requirement of producing 288 EPS systems in less than eight hours a day.

Duncan, S.C., recently became the new home of Preferred Sourcing Inc., which specializes in inspection of non-conforming automotive parts. The company is leasing a 20,000 square foot facility in Spartanburg County, where it employs about 20 people.

"We are delighted to be joining the business community in South Carolina," said Jeff Weisenauer, president and CEO of Preferred Sourcing. "We have admired from afar the dynamic climate for business in South Carolina over the past years, and being a company that primarily provides support to the automotive sector, we have been strategically planning to become part of this phenomenon."

And in late October, T&WA, a supplier of tire and wheel assemblies, announced it would invest $6.8 million in a new facility in Spartanburg County's Gateway Industrial Park, in Greer, S.C. The company will be a supplier to the BMW plant, also located in Greer.

"We feel very fortunate to have been selected as a supplier to a great company like BMW," said Gary Dodd, president of T&WA. "We truly look forward to a long and successful relationship. We are also very happy with the support we have received from the state of South Carolina and the local area."

Suppliers continue to set up shop and expand operations around automakers such as BMW in South Carolina, Nissan in Tennessee, and Mercedes-Benz in Alabama.

"The hotspots tend to be where there are customers," said Neil DeKoker, managing director of the Detroit-based Original Equipment Suppliers Association. "I think that's primarily what will continue to drive where suppliers locate."

Future increasingly complex for autoworkers

The auto industry will face another challenge over the next decade, and that is the issue of impending retirees. Losing substantial amounts of employees will only complicate things for the industry, which is increasingly in need of skilled workers.

"Certainly in skilled trades, employee skills are critical more and more in an industry that's becoming more complex," said OESA's DeKoker. "Basic, good old 8th or 10th grade education just doesn't apply in our industry anymore."

In this new era of technology, the availability of workers is paramount, but they must be skilled as well. Rural areas, often home to untapped pockets

of people, can make great locations for companies in the automotive industry.

Such was the case for Toyo Seat USA, which moved into a 50,000 square foot spec building in the Cumberland Mountains community of Pelham, Tenn., in April 2001. Toyo officials cited the available and willing work force of Grundy County as a primary draw. The company manufactures seat frames and seat mechanisms.

A stable and productive work force was also paramount when it came to a recent expansion project by Saturn Electronics in Rocky Mount, N.C.

The company, which employs 110 people, is in the process of adding 70 more workers at its facility where a new automotive lighting product will be

made and new equipment will be installed.