St. Paris manufacturing firm KTH Parts Industries is making progress on a $29 million expansion and hiring that’s connected to increased production at Honda.
The investment is expected to put the company in a better position to compete for the next few decades as both manufacturing and the auto industry have begun to recover from the Great Recession, said Art Liming, executive vice president, plant manager and director at KTH.
Much of the work is completed, and the number of employees has increased from 871 in August of last year to 932 employees this July. Including temporary workers, the company has more than 1,120 employees.
KTH is still hiring for some technical positions, and moving some temporary workers into permanent positions when possible, said Chris Millice, assistant vice president of general administration.
The company produces auto body frame assemblies for Honda, and manufactures enough parts to make as many as 4,000 vehicles a day.
U.S. auto sales have surged, recently reaching the highest levels the industry has seen since 2006, said George Magliano, senior economist for IHS Automotive.
“It’s a big year,” Magliano said. “It started off with a couple of difficult months because of the winter and now it’s been going gangbusters. And that’s feeding into production.”
Information from Autodata Corp., a research firm, shows total U.S. light vehicle retail sales reached about 17.5 million vehicles in August. Honda sales were up slightly, about 0.4 percent compared to the same month last year.
Chrysler LLC boosted sales by about 20 percent, the data shows, while Ford improved sales by 0.4 percent and General Motors sales declined 1.2 percent.
The expansion at KTH included more space for storage, training and locker rooms and an expansion of a trailer yard. The biggest portion of the investment includes the installation of an $18 million, 3,000-ton servo press designed to produce strong, light-weight auto parts.
Increasingly, auto manufacturers are looking for materials that are light enough to reduce gas mileage, Liming said, but strong enough to maintain current crash test ratings.
“This servo press is designed to handle that higher strength material,” he said.
The press is expected to be installed by next spring, Millice said.
KTH also invested about $6.7 million in an automated storage retrieval system to help store and quickly ship auto parts. Currently, employees need to know where to look when they run out of a specific part. But the new system will allow them to scan a code, and the system will automatically grab a box of the parts and deliver them to a conveyor belt for quick pickup, saving time for workers.
Much of the work for that project is complete, Liming said, although software and other issues still need to be finalized.
Business at KTH is closely tied to Honda, and Millice said he expects the Champaign County firm to continue to fare well as the auto industry recovers.
Officials at Honda said they couldn’t discuss the supplier and its plans, but said Honda is on track to hit record sales this year.
“The Accord midsize car and CR-V compact crossover have garnered record retail sales in the first half of the year with no signs of slowing down,” said John Mendel, head of the American Honda Auto Division. “The Accord, CR-V and Civic exceeded 300,000 sales in 2013 and are expected to do so again this year.”
Mendel said Honda’s gains have been on the retail side of the business, which he believes is the most accurate market indicator.
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