Cosma To Build Automotive Frame Plant in Bowling Green

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Researched by Industrialinfo.com (Industrial Information Resources, Houston, Texas) Cosma International, a division of Magna International Incorporated (TSX:MG.A, MG.B; NYSE:MGA)(Aurora, Ontario), is poised to build a 910,500 square foot automotive frame manufacturing plant (Plant 1062577) in Bowling Green, Warren County, Kentucky. Cosma plans initially to hire 300 employees at an average salary of $14 to $18 per hour.

Preliminary plans submitted to the City-County Planning Commission by American Engineers of Glasgow (Glasgow, Kentucky), show the building located on the north half of a 132-acre plot in Tract 3 of the new TriModal TransPark in northeast Bowling Green, bordered on the north by Glasgow Road (US 68) and on the west by Hays-Martin Road. The 910,000 square foot plant includes 50,000 square feet of office space, behind which will be the manufacturing section of the plant. The back (south) side of the plot is serviced by three CSX railroad spurs.

Magna has already awarded the Architectural and Engineering contract to the Lansing, Michigan, branch of Hobbs & Black Associates Incorporated (Ann Arbor, Michigan). Other general contracting bids will be put out in the very near future, with the awarded firms being given total responsibility in handling the construction project. Neither Magna, nor Cosma will be handling any of the construction details.

There will be a vendor fair taking place January 15, from 9:00am until 2:30pm, at the Sloan Convention Center, Ballroom C, at 1021 Wilkinson Trace in Bowling Green, for those subcontractors interested in learning about Magna and Cosma, and in bidding on various segments of the project. (For those wishing to stay overnight, there will be a corporate rate available at the adjacent hotel.)

Cosma, a prominent metal-forming supplier that produces chassis stampings, bumper beams, and exterior sheet metal body panels, is not new to the U.S. South - it already has a chassis systems plant (Plant 1042996) in Piedmont, Greenville County, South Carolina. The Piedmont plant is currently finishing up a 200,000 square foot expansion project, for a total of 800,000 square feet of manufacturing space.

The Bowling Green plant will serve two nearby Ford Motor Company (NYSE:F) (Dearborn, Michigan) plants, an Sports Utility Vehicle (SUV) assembly plant in Louisville, Kentucky (Plant 1501356), and the Saint Louis Assembly Plant in Saint Louis, Missouri (Plant 1513680), where Ford builds the Explorer SUV. Production of the Explorer in Louisville is scheduled to end in 2005, and at that time, all remaining SUV assembly will be moved to Saint Louis Assembly.

Tower Automotive had been building the frames at its Corydon, Indiana, plant, but decided last year not to bid on the new contract for future Explorer frame business, pointing to unprofitability. (Some automotive assemblers, such as General Motors, have squeezed suppliers to the point where it is hardly profitable to accept supplier contracts anymore, demanding that suppliers meet low unit prices, while demanding that the supplier take on more technological and legal responsibilities. What contracts a supplier does accept can, by virtue of a recent General Motors dictum, be yanked by General Motors if they find a cheaper source, and if the supplier cannot meet the lower price within 30-days' time.) In June 2003, Ford announced that Cosma had won the contract to make the Ford Explorer frames.

The Kentucky Cabinet for Economic Development site lists the cost of the land in Tract 3 of the Bowling Green TriModal TransPark as $45,000 per acre, which would bring the total price for the Cosma land alone to near $6 million, roughly half of the $12 million the State of Kentucky offered to Magna as an incentive to build there. In a financially strapped state such as Kentucky, one might wonder about the economics of the gesture. If Magna's success in the last few years continues through 2004 and beyond, it could mean more jobs for Kentucky.

Magna International has 14,000 employees working in 48 plants in the U.S., most of which are located in the mid-west, not very far from the Canadian border. One exception is Cosma's metal stamping plant, in Victor, Iowa (#1034044).

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