Leaner operations and a healthy market for new cars are helping automobile manufacturers and their suppliers weather the economic downturn. Many regions in North America with auto industry clusters are seeing increases in facility investments.

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ough times may be challenging the North American automotive sector, but that's nothing new. In a time when symbols carry more weight than ever before, the industry that's always been the flag-bearer for manufacturing strength and innovation is now laboring under the strain of war and worry. An idling economic engine is testing the industry's limits when it comes to "lean," as plants for such giants as Delphi, Dana and Tower Automotive are slowed or shuttered.
      "In addition to improvements to our cost structure, Delphi's transition to lean allows us to be better prepared for times of crisis," said Mark C. Lorenz, Delphi vice president of operations and logistics, of the company's touted flexibility. "Our small lot production strategy and nimble logistics supply base allow us to keep all of our global customers operating without disruption."
      Unfortunately for some communities, Delphi and companies like it are letting go thousands of workers, limiting capital expenditures and "accelerating global restructuring plans."
      In the midst of such gloom, it comes as a pleasant surprise that sales of automobiles haven't slowed as much as some initially thought, and the industry is on track to have one of its best years ever. Indeed, at press time, 2001 was shaping up to be the best year ever for automobile sales, thanks in part to buyer-friendly financing programs.
      "The automotive industry appears to have been resilient to the global slowdown," note Henry Loewendahl and Roel Spee, site selection experts at PricewaterhouseCoopers-Plant Location International (www.pwc-pli.com), Brussels, which operates the Global Investment Location Database (GILD). "PwC-PLI data on foreign direct investment projects show that the share of the automotive sector in total FDI projects has been around 10 percent all year long [2001]. In the past few months, we have seen an increase from 8 percent to 12 percent in total projects, and the number of automotive projects doubled in this period," they point out.