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Subaru suppliers rely on gray market labor

The Subaru Forester is currently the Japanese brand's bestselling model in the US. A new investigation by Reuters is making some scathing allegations about how the popular model is actually made, though. The piece claims that many of Subaru's suppliers in Ota, Japan, are using low-paid foreign workers and asylum seekers to produce components that go into the CUV. The report says that these laborers are coming from places like China and Bangladesh, and they allegedly receive a pittance compared to their Japanese counterparts. Many said that they get about $6.60 an hour, but employment brokers can take a large portion of that pay. At just four suppliers Reuters estimates there are 580 foreign workers, or about 30 percent of the total workforce. The situation has turned Ota into a cultural melting pot because of the significant population of immigrant labor. The problem stems in part from Japan's tiny labor market, and the country's odd asylum system that doesn't allow some applicants to work legally. These suppliers produce many components for the Forester, including the seats, shocks, and fuel tanks. Reuters admits that the businesses have contracts with other Japanese automakers, as well, but Subaru receives the main focus of this piece, which you can read in full, here. When asked for comment about Reuters' report, Subaru of America provided Autoblog with the following statement: "Fuji Heavy Industries does not condone the exploitation of any class of worker, either in its own operations or within its supply chain. FHI expects all employees to be treated fairly, with dignity and respect and to be provided with appropriate workplace protections. The FHI CSR policy respects and adheres to the law and regulations of business as well as upholding human rights and international standards of behavior and the ethical standards of our stakeholders. Our supply chain network has been made aware of our policy and expectations."

Subaru confirms 3-row crossover for Indiana plant for 2018

There's a new vehicle coming to Subaru's Lafayette, IN, factory, as the all-wheel-drive specialist confirmed the site will build a new three-row crossover. The vehicle, which will actually be larger than the long-departed, three-row Tribeca, will begin construction in 2018. This announcement from Subaru follows a report from Automotive News last week that the company would introduce a US-specific seven-passenger CUV. That same report pointed to the Indiana factory as the source of the new model. It's unclear if this new model will revive the Tribeca name. All the company would say is that it "will likely carry a name synonymous with outdoor adventure, consistent with the company's other successful crossovers." "We are delighted to be bringing even more Subaru manufacturing to the US," Subaru of Indiana Automotive executive vice president Tom Easterday said in a statement. "The new model will also result in increased investment at SIA and at several of our suppliers across the country." Alongside the unnamed new CUV, Subaru's Lafayette, IN, factory already builds the Legacy and Outback. By the time the full-sizer arrives, the factory will also be responsible for the redesigned Impreza. Read on for the official announcement from Subaru. November 9, 2015 SUBARU CONFIRMS NEW 3-ROW CROSSOVER TO BE MADE IN U.S. AT INDIANA PRODUCTION PLANT Subaru of Indiana Automotive will receive 3-row in 2018 as its fourth model Cherry Hill, N.J. - Subaru has confirmed that a new 3-row crossover model, effectively replacing the retired Tribeca, will be produced at its SIA plant in Lafayette, Indiana. The all-new crossover is expected to be built beginning in 2018 and will be a larger vehicle than the Tribeca, with full third-row capability. The new vehicle has not yet been named, but will likely carry a name synonymous with outdoor adventure, consistent with the company's other successful crossovers; Outback, Forester and Crosstrek. When production of the new model begins, Subaru will have four models produced in the U.S.: Legacy, Outback, a new Impreza compact sedan and 5-door model beginning production in late 2016, and this new crossover. Subaru production in Indiana is projected to be approximately 228,000 units in 2015, and annual capacity is scheduled to grow to 394,000 with the introduction of the Impreza model. Subaru is currently enjoying its seventh consecutive year of sales records and expects to close 2015 with over 550,000 sales, with sales tripling since 2007.

Will more efficient tech mean higher prices for Subaru?

If the latest ruling by the California Air Resources Board holds, then Subaru at least must build a plug-in hybrid in the coming years to comply with the Golden State's regulations. Fuel economy looks to improve across the board for the brand, though, thanks to $780 million going into the development of cleaner powertrains for this fiscal year alone. However, buyers might have to pay more for a Subie in the future after this boost in green spending. "Related costs are going up more than expected, bringing the profit margin downward," Fuji Heavy Industries President Yasuyuki Yoshinaga said to the Nihon Keizai newspaper in Japan, according to Automotive News. "We are a small company. We do not benefit as much from economy of scale as bigger companies, so we will have to make up for the increased costs by raising our brand value." At the moment, Subaru's electrified lineup in the US comprises just the XV Crosstrek Hybrid, but the company is reportedly planning to add more. Plus, Subie also wants to make its internal combustion engines more efficient. According to Automotive News, all of the brand's mills are getting direct injection by 2016, and cylinder deactivation and lean combustion cycles are on track for 2020. Earlier rumors also suggested that the automaker might bring the turbocharged four-cylinder boxer to more products, as well. While these more efficient models might cost more, Subaru must carefully maintain the balancing act of introducing the technology and keeping sales growing. As of May 2015, the brand had 42 straight months of year-over-year growth in the US and had record sales in the country last year. The company has already decided to significantly boost production capacity at its Indiana factory in hopes of keeping the good times rolling.