Former President Donald Trump has reignited discussions about relocating vehicle production to the United States, emphasizing the need for automakers to invest domestically. While his hopeful and angry message understandably resonates with many American workers, industry experts are quick to highlight the complexities involved in such an endeavor.
A typical $12.6 billion project would have taken over two and a half years to complete. This points to just how long it takes to create new automotive footprint. Yet, the permitting process for these positive changes can take six-to-twelve months. That can have a crippling effect on your ability to get started or scale up your production capacity.
Approving new large assembly plants can take years and a lot of complicated financial planning. Shifting production lines is no easy feat. It requires extensive planning and coordination, and it is often an expensive endeavor that can cost millions. Lastly, auto manufacturers need to have their regulatory and trade policies held constant over the period of development.
In 2019, a facility erected in China was completed in less than a year, thanks to the expedited support from Chinese officials. This starkly contrasts with the lengthy timelines faced by U.S. automakers, highlighting the challenges of competing against countries with more streamlined approval processes.
Take a look at Hyundai Motor, which just announced big plans to open a $5.54 billion plant in Georgia’s Savannah area. This facility will be 16 million square feet, needing thousands of acres just for factories. This next facility will require the biggest investment yet. It will, for example, require a new workforce equipped to tackle the unforeseen operational challenges of a massive, new production facility.
According to some estimates, the actual lead time for getting a new manufacturing facility up and running is 12 to 18 months. After that, it takes a year or more for tooling and ramping up production. This long lead time casts doubt on the ability to rapidly scale up domestic production.
“The fastest way to increase U.S. production is to use existing facilities with established supply chains,” noted industry analysts. General Motors illustrates this approach well, using a handful of plants to produce its most productive, highest-volume products. This framework allows for streamlined production processes and quicker shifts to respond to consumer needs.
Increasing production at existing plants can be accomplished by investing billions of dollars in plant changeovers or dual production lines for older and newer models. Such strategies are a quicker fix, of course, than constructing entirely new facilities from the ground up.
The multiplier effect of vehicle manufacturing jobs on economic impact overall is huge. Vehicle manufacturing supports an average of 10.5 additional jobs throughout the United States for every direct job created. It underscores how important the automotive sector is to sparking economic growth.
Hyundai’s new “Metaplant” in Georgia is the most recent auto assembly plant to open in the U.S. This advance brings new hope for future job creation and the economic resurgence of this prized region. Industry leaders have seized on Trump’s call for more domestic production. The change will take time—it won’t happen overnight.
“I’m convinced that localization is the way, but localizing new models that are built somewhere else in the world doesn’t happen overnight,” said Christian Meunier, underscoring the complexities involved in shifting production lines.
Trump has acknowledged these challenges, stating, “They need a little bit of time because they’re going to make them here.” He added, “They need a little bit of time, so I’m talking about things like that.”
Swamy Kotagiri emphasized the intricacies of such transitions. “It’s not a flip of the switch.” Industry experts will tell you many factors need to come together for successful production shifts.
Doug Betts highlighted that “all of those things have to fall in place,” reaffirming the need for careful consideration and planning as automakers navigate these challenges.