Automakers Looking to Add Plants in U.S.




By Phil LeBeau, CNBC Correspondent

NEW YORK ( CNBC) -- Here's something few could have imagined two years ago: the Big 3 are once again looking at opening new plants.

Take a second to let that idea sink in.

It says volumes about how far the auto industry and America's economy have come. And yes, it's the kind of news that will stick in the craw of those workers and cities the Big 3 cut loose over the last two years.

So how close are Detroit's automakers to opening new assembly plants or expanding current ones to add capacity?

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It won't happen this year and probably not until 2014. But to quote one auto executive, "This is a conversation we are starting to have because we have to be ready."

Big 3 executives will be careful to publicly play down expansion talk, but make no mistake, they see the need coming much faster than anyone expected.

During the recession/auto meltdown America's automakers closed 12 plants and stripped out 5.5 million vehicles of capacity. They right-sized an industry to be break-even with annual sales of 10 million vehicles and be near full capacity at close to 15 million in annual sales.

Well, after finishing last year with annual sales of 12.8 million vehicles, look at what's happened so far this year. The sales pace (thanks to pent-up demand and an improving economy) is well over 14 million. Many now believe the industry will finish the year with a sales pace of at least 14.5 million.

The Big 3 have responded to higher sales by ramping-up production, adding third shifts and scrambling to keep up with demand. Their engine plants are running full steam. In February, auto plants in the U.S. utilized 85% of their capacity.