MISHAWAKA, Ind. -- The steady comeback of the U.S. auto industry has brought new life to underused factories, as carmakers across the country add shifts of workers to meet demand for vehicles.
But even in an industry on the rebound, the revival of a once-empty plant in northern Indiana stands apart.
Last week, officials of AM General -- the maker of Humvee military vehicles -- celebrated the production of a Mercedes-Benz sport utility vehicle in a sprawling factory that once built Hummer SUVs for General Motors.
The plant was idle for years after GM went bankrupt in 2009 and had to shut down its Hummer brand and shrink other operations as a condition of its $49 billion government bailout.
At the time, it appeared the factory in this city of 48,000 might be another casualty on the long list of auto plants that closed permanently in the past recession.
But the old Hummer plant has been resurrected and become an example of how a modest-sized, Rust Belt manufacturer can find its niche in a global automotive industry.
AM General's hourly workers, who belong to the United Auto Workers union, are building the German luxury SUVs for a specific clientele: consumers in China.
While a number of U.S. auto plants export their products around the world, the factory is believed to be the only one in the United States that ships its entire volume for sale in the Chinese market. Like other automakers, Daimler is not backing off its plans for China despite a recent sales slowdown there.
"We are making German luxury vehicles in Indiana for export to China and doing it with workers at the oldest UAW local in the nation," said Howard Glaser, head of AM General's commercial division. "You basically have the entire global economy under one roof."
The plant's revival is one piece of what has become a vibrant U.S. auto-manufacturing sector.
The number of U.S.-made vehicles exported to other countries grew to more than 2.1 million in 2014, more than doubling from just more than 1 million in 2009, according to federal data from the Commerce Department's International Trade Administration.
Exports to China have particularly skyrocketed, jumping to 305,000 last year from barely 25,000 vehicles in 2009.
According to the Center for Automotive Research, overall U.S. vehicle production hit 11.66 million last year, up from 11.07 million in 2013. Bernard Swiecki, assistant director of the center's Automotive Communities Partnership, said that with auto sales booming, it was not surprising factories that survived the downturn were roaring.
"It's pure supply and demand," Swiecki said. "The automakers have to produce vehicles for a robust market, and so they're squeezing every bit of production they can out of these locations."
In 2010 and into 2011, the center estimates, capacity utilization at North American auto plants -- including Canada and Mexico -- fell to about 70 percent, he said. In 2012, when the recovery began, that rose to 91 percent. Last year, it grew to 96 percent.
About 350 hourly workers staff the plant, down from a high of 1,000 during the glory days of the gas-guzzling Hummer brand at GM.
While it may not be operating at full capacity, the factory has become a bright spot in the Indiana economy, which lost many manufacturing jobs in the recession. The nearby city of Elkhart, for example, lost thousands of manufacturing jobs in the recreational-vehicle industry, and unemployment rates in the area approached 20 percent.
The AM General plant was only 8 years old when GM went bankrupt.
"Those were very tough times," said David Whitby, who heads commercial manufacturing for AM General. "We went from having about 1,000 workers in the plant, down to just about zero."
Some of the laid-off workers at AM General transferred to the company's military vehicle facility next door to the Hummer plant. But job security was tenuous there as well.
"We just had to keep moving forward and hoping for the best," said Velgean Daniel, who has worked for the company for 15 years.
The plant started its slow recovery in 2011, when it began building limited volumes of a van accessible to the disabled for a startup called MV-1.
Production was too small to allow AM General to begin recalling the bulk of the laid-off workers, and the plant itself was considerably larger than what was needed for the MV-1.
A huge opportunity was on the horizon, though, as the auto industry in the United States started its revival. German automaker Daimler, the parent company of Mercedes-Benz, was running short on production capacity for SUVs at its factory in Alabama.
Last year, Mercedes officials started scouting for other possible sites to build one of the plant's SUV models, the R-class.
The R-class had never caught on with U.S. consumers, and sales in the United States were discontinued a few years ago. But the sleek, station-wagon shaped model was a hit in China, and Mercedes was determined to keep building it.
Jason Hoff, the head of Mercedes operations in the United States, said it was not practical to relocate the supply base for the R-class from North America to China.
"That would have been far too expensive," he said.
Instead, Mercedes signed a multiyear contract to have AM General assemble the R-class in Mishawaka, using parts shipped from suppliers throughout North America and Europe.
Now, the plant is building 70 to 100 vehicles a day, mostly R-class SUVs as well as a small number of MV-1 vans.
There is enough space for more models in the plant, and Glaser of AM General said the company was hoping other manufacturers might send AM General products they could not build on their own.
Mishawaka Mayor David Wood said the turnaround at the plant had a profound impact on his community, and not just because much needed jobs and paychecks have returned.
"This is just a real momentum builder for us and for the region," he said. "The auto industry has a long history here going all the way back to Studebaker, but bringing in Mercedes really puts us on the map."
SundayMonday Business on 08/16/2015