News That You Can Use When You Do Business in the American South

December

Will Samsung Build a Cluster of Fabs in the South?

In December officials with South Korean electronics company Samsung announced they will spend almost $25 billion (that's with a "b") on upgrading its semiconductor manufacturing operations throughout the world over the next five years. The only fabrication plant the company operates in the U.S. is located in Austin, Tex. That plant makes memory chips and it recently went through a $1.6 billion upgrade. Samsung owns about 300 acres of land in North Austin and rumor has spread that the company might build a cluster of fabs on the property. The acreage is large enough to site four typical fabrication plants.

Countrywide Financial Announces Huge Texas Deal

California-based Countrywide Financial Corp. has announced it is creating about 7,500 new jobs in the state of Texas over the next five years. The expansion into the Lone Star State will begin in January when the company will add about 2,500 jobs to its Richardson, Tex. location.

Pillowtex Facility Sold in N.C.

One of the largest job loss deals in a single location in Southern history happened a couple of years ago when Pillowtex closed in Kannapolis, N.C. Almost 5,000 workers lost their jobs in and around Kannapolis when the company folded. One of the company's facilities, Plant 1 in Kannapolis, was recently sold to Castle & Cooke, a Los Angeles-based real estate development company owned by David Murdock. The facility totals almost 6 million square feet.

Wachovia Investing $400 Million in Alabama

Wachovia Corp., which recently purchased Birmingham-based SouthTrust Corp., announced plans for a $400 million data center in Birmingham. The 210,000-square-foot center will house 40 employees initially.

Orlando International Airport Ranked Second in the World

Orlando International Airport was recently ranked No. 2 in the world for customer service according to the 2004 Global Airport Satisfaction Index Study conducted by J.D. Power and Associates. Honk Kong International Airport ranked No. 1 in the study.

November

Okay, Hell has Frozen Over. North Carolina Forks Out $250 Million for Dell

In just this past fall quarter there were a slew of deals coming out of North Carolina, the state we have deemed over the years as the Grande Dame of economic development in the South. Those deals were highlighted by Round Rock, Tex.-based Dell's decision to locate a large computer assembly and distribution center in the Piedmont Triad region of the state, specifically a site in the city of Winston-Salem.. If you turn to our Relocations and Expansions section in this issue, you can read about all of those deals.

We have labeled North Carolina the Grande Dame of economic development in the South because of its history in the industry. While North Carolina didn't invent economic development as we know it today (Mississippi did), they did perfect it in the 1950s and 1960s with how they went about the recruitment of industry and the development of the Research Triangle Park, certainly a forward-thinking patch of speculative land at the time.

Over the last several years we have disagreed with several other magazines on how the Grande Dame has fared in economic development. While some of our competitors were giving North Carolina first place in this study, or top state in another survey, we have, for the most part, been unkind in our assessment of the state's recent performance. Our numbers just did not support the accolades given the Tar Heel State. In fact, over the past four or five years, we've seen a decline in North Carolina's recruitment of industry. Backing our claim were many of the state's own lawmakers and economic developers. They, too, have admitted that the Tar Heel State has slipped in recent years.

Our argument centered on the fact that North Carolina was practicing the recruitment of your company as if it was still the 1960s. In other words, they wouldn't "write a check" big enough for your deal, while Alabama, neighboring South Carolina and a handful of other Southern states were more than willing to pony up huge incentives for major industrial announcements.

Now we hear that a North Carolina state incentive package totaling about $250 million was won by Dell for what will ultimately be a $190 million facility housing about 1,500 workers by 2009. Spin off jobs created by Dell vendors are speculated to eventually total 6,000 to 8,000, though numbers nowhere near that have been seen in middle Tennessee, where Dell announced a similar computer assembly project in 1999.

It's ironic that many of the same North Carolina officials approving the Dell incentives have publicly hammered large incentive packages given out, particularly by Alabama -- but other Southern states, too -- over the last several years, including about $250 million for Mercedes in 1993, less for Honda in 1998 and approximately $160 million for Hyundai in 2002. Those three automotive deals are three of the top five deals announced in the South over the last dozen years or so.

In the case of Mercedes and Honda, almost $2 billion has been invested in Alabama directly by the automakers and almost 10,000 workers are employed at the two plants. In Hyundai's case, about $1 billion will have been invested by the Korean company and 2,000 jobs created by the end of next year. None of those totals includes spin off jobs.

While we don't know exactly how the incentive package North Carolina offered Dell is set up, we do know exactly the history of large incentive packages given out to companies that have announced big deals in the South since 1992. That being the case, North Carolina paid too much for the Dell deal. Again, it's ironic given the state's fiscal conservatism and its outspoken history against large incentive packages given out to industry.

Regardless of the price tag, we applaud North Carolina officials for making sure they did not lose the Dell deal by offering the $250 million incentive package. It is a signature deal, one that North Carolina needed and has needed for many years. Sure, N.C. may be one of the nation's greatest deal turners of projects with 100 to 200 jobs, but for the most part, the state has missed out on the crown jewels announced in the South over the last dozen years. And then there's the sobering fact that per capita, the state of North Carolina has lost more manufacturing jobs than any state in the South over the last five years. That in itself is why the Dell deal was so important to the state.

Recent economic development history in the South has proven that big corporate or industrial deals earn the state in which they are turned many times over what that state paid in incentives. It's about time the folks of North Carolina took a $250 million chance with a signature corporate citizen so they can learn that themselves.

Mike Randle (mike@sb-d.com)

11,000 New Jobs for Virginia

In the 13 years this publication has been in existence, we've never seen a day when 11,000 jobs were announced on the same day and in the same state. That's exactly what occurred in Virginia on November 17. Virginia Gov. Mark Warner announced that 11,115 jobs will be created by four major companies already doing business in Virginia that provide services to the federal government. The total investment will exceed $351 million, an astonishing amount considering none of the deals are of the manufacturing variety. Science Applications International Corp. will create 4,515 jobs, SRA International will hire 1,400, PricewaterhouseCoopers will create 600 jobs and Booz Allen Hamilton will create up to 4,600 jobs in Virginia. All of the jobs are the result of new homeland security, defense and information technology deals struck by the four companies and the federal government.

Top Two Job Markets: Prince William, Va. and Rutherford County, Tenn.

Data from the Bureau of Labor Statistics shows that the top two markets recording the largest increase in job creation for the 2003-2004 fiscal year are located in the South. Prince William County, Va., led all markets in the U.S. with an 8.0 percent increase in jobs created during the period with Rutherford County, Tenn., placing second with a 7.3 percent increase.

Milken Institute's Top 10 Loaded With Southern Markets

The nonprofit independent think tank Milken Institute's annual Best Performing Cities ranking features six Southern markets in its 2004 top 10. Fort Myers-Cape Coral, Fla. is the institute's No. 1 market with West Palm Beach-Boca Raton, Daytona Beach, Sarasota-Bradenton, Fayetteville-Springdale-Rogers, Ark., and Fort Lauderdale making it in the top 10. Las Vegas, Phoenix and Riverside-San Bernardino, Calif., were markets outside the South ranked in the top 10. The Milken Institute Best Performing Cities Index ranks U.S. metro areas based upon their economic performance and their ability to create, as well as retain, the greatest number of jobs.

"Big Deal" Amendment Passes in Arkansas

A bill allowing Arkansas' state legislature to issue general obligation bonds for "super projects" that create at least 500 jobs and include a minimum of $500 million in investment passed in November. The amendment is designed to attract major job and investment deals in the state and could pave the way for Arkansas' first automotive assembly plant. Jim Pickens, the former director of the Arkansas Dept. of Economic Development led the efforts to get Amendment 2 passed.

Scripps Showdown in South Florida

When it was announced just over a year ago, the California-based Scripps Research Institute's decision to locate its East Coast operation in Palm Beach County, Fla., was seen as an economy-transforming deal for the Sunshine State. The bio industry, while present in Florida, certainly does not currently boast the infrastructure seen in other U.S. markets, many of which are located in the South.

But with Scripps, the state had visions of a massive bio industry cluster and as many as 50,000 bio-related jobs ultimately being created. While that may still be the case, recent developments in Palm Beach say it is going to be a tough road to hoe.

As of late November, Scripps' preferred location, the former Mecca Farms site in western Palm Beach County, had not been secured. Palm Beach County Commissioner Karen Marcus met with Florida Gov. Jeb Bush on November 17 in Tallahassee and Bush urged her, according to several Florida daily newspapers, to go ahead and issue permits and start construction on Scripps' first phase, estimated to cost $137 million. The facilities are part of Florida's and Palm Beach's $450 million incentive package to Scripps.

But standing in the way of the entire deal are several legal challenges, including a significant one from an organization called the 1000 Friends of Florida. That group, along with several others including the local Audubon Society, the Florida Wildlife Federation, Sierra Club and other environmentalists, maintain that the 1,920-acre project will threaten the Everglades restoration efforts. In fact, a spokesperson for the 1000 Friends of Florida said in the fall quarter that the Scripps project is one of the greatest environmental and growth management threats in Florida history (hard to believe considering what the Army Corps of Engineers did to the state of Florida through water diversion from the 1950s through the 1970s).

Worse yet for Scripps and for Bush is Richard Grosso, a high-profile attorney from Fort Lauderdale, who now seems to be calling many of the shots for 1000 Friends. Grosso, it should be noted, led a legal challenge against the building of a certain condominium in Martin County. Construction of the condos began and Grosso's lawsuit was a success, prompting a South Florida judge to order them to be torn down.

Will the state of Florida and counties in South Florida putting up incentives for Scripps risk going ahead with construction? With Bush giving the green light for the first Scripps phase at the Mecca Farms site, which is not officially secured, combined with lawsuits flying from environmental groups and the attorneys representing them, it looks as if we have a showdown for Scripps in South Florida.

Lee Burlett (lee@sb-d.com)

October

Publication Taps Texas with Best Business Climate

Site Selection magazine has named Texas in a recent edition as having the No. 1 business climate in the country. The magazine cited the recent passage of tort reform legislation in the state, the Texas Enterprise Fund, a significant source of money designed to lure large projects to the state, as well as the state's economic turnaround in the last year. The rest of the top 10 best state business climates according to the magazine are New York, Illinois, Georgia, North Carolina, Florida, Tennessee, South Carolina, Ohio and Alabama. Other states from the South earning a top 20 ranking are Kentucky, Mississippi, Virginia and Louisiana.

Austin, Tex. Top Market for Singles

According to a survey conducted by Primacy Relocation LLC and Worldwide ERC, Austin, Tex., is the best city in the U.S. for relocating, young, professional, single people. The same source named Austin the top U.S. market for relocating families in May of this year. As for the singles designation, the study measured the area's activity in volunteerism, variety of restaurants, general nightlife, health clubs, monthly rental costs and the number of migrating single people between the ages of 24 and 35. Following Austin was San Francisco, Portland, Seattle and Jersey City, N.J.

State of Tennessee Web Site Named Best

The official Tennessee Web site, www.Tennessee.gov , was named the best state government Web site in the U.S. by researchers at Rhode Island's Brown University. Researchers at the Taubman Center for Public Policy & American Institutions at Brown studied more than 1,500 state affiliated Web sites and judged them on quality control, ease of use, service availability, content and foreign language access.

Texas Foreign Trade Zones Generate Billions

Texas' Foreign Trade Zones led all U.S. state FTZs with over $3.5 billion in exports in 2003. Over 71,000 people are employed by companies operating in FTZs in Texas, a total that dwarfs second-place Ohio, where 29,000 people work in its FTZs. Over $245 billion worth of product entered FTZs in the U.S., an increase of 27 percent over 2002.

New Round of HQ Relocations Scouting the South

Calendar year 2003 saw more large headquarter relocations to the South from states such as New York, California, Illinois and New Jersey than any year in memory. That trend slowed in the first two quarters of this year, however, significant headquarter relocations to the South apparently are back on track. Officials with K-Mart, Novelis, Calphalon and other corporations with headquarters located outside the South were spotted checking out sites in the South during the fall quarter.

Study Shows South Dominates New Business Establishments

The top five states with the highest number of new business establishments between 1998 and 2003 were led by California. However, after that, the rest of the top five were Florida, Texas, Georgia and North Carolina, so says infoUSA, a Nebraska-based business database company. States with the lowest increase in business establishments during the period included Massachusetts, New York and Illinois.

Kentucky Governor Announces Statewide Broadband Service by 2007

Kentucky Gov. Ernie Fletcher announced in the fall quarter that broadband Internet and telecommunications service will be available throughout the state by 2007. Wiring Kentucky's rural areas is at the forefront of the initiative, which is being led by The Center for Information Technology Enterprise, based in Bowling Green, Ky. Called ConnectKentucky, the program is designed to work with Kentucky communities in grass-roots style efforts to expand high-speed Internet service. Gov. Fletcher said that the public-private initiative will be funded by state and federal dollars.

September

Southern Markets Make Most Congested List

Los Angeles and San Francisco remain the worst traffic markets in the U.S. according to a study done by the Texas Transportation Institute. TTI's annual Urban Mobility Report also ranked Washington, D.C. third-worst, followed by Dallas-Fort Worth and Atlanta. Also ranking high as markets in the U.S. with the most congested roads were Houston, Riverside-San Bernardino, Chicago, Boston and San Jose. The report showed that Southern markets with the least hours of vehicular delay include Oklahoma City, Richmond, Kansas City and New Orleans.

Duke Power Cuts Industrial Rates in South Carolina

Duke Power has reduced its industrial customer's electric rates by almost 3 percent in South Carolina. Duke proposed the rate reduction in an effort to increase its industrial customer base in S.C. The utility's percentage of business from industrial customers has dropped about 10 percent since 1998 in South Carolina.

New Plant in Tenneesee

Winchester Ammunition announced in early September it will build a new manufacturing facility in Oxford, Tenn. The company, which will make ammunition used in industrial power tools, is expected to hire 150 workers when the plant opens.

New Steel Maker Might Choose Rural Arkansas

SteelCorr, a new company headed by the former CEO of steelmaker Nucor, is looking at sites in Arkansas, Louisiana and Missouri for a $700 million, 450-employee plant that would supply steel to the South's growing automotive industry. Apparently SteelCorr's preferred site is near Osceola, Ark. That site is a 970-acre tract on the Mississippi River that is near a plant Nucor operates in Bytheville, Ark.

Texas to Implement "Cluster" Strategy

A few years ago, the Louisiana Department of Economic Development launched a new economic development strategy that involved the creation of cluster directors and teams. These individuals would focus on their individual cluster industry exclusively, such as automotive, biotech and information technology. Texas Gov. Rick Perry will announce in the fall a similar strategy for the Lone Star State in its efforts to create jobs. Perry has identified six industries that he will apply to the cluster concept. Those industries are the life sciences, energy, information technology, petrochemicals, advanced manufacturing and aviation/aerospace/defense.

August

Wiring of Rural Virginia Begins

In the summer quarter, Virginia Gov. Mark Warner announced a $12 million investment in broadband technology that will result in the installation of 700 miles of fiber-optic cable connecting 20 counties and five cities in southern Virginia. In addition to the cities and counties, over 50 industrial parks in south Virginia's rural regions will be connected to broadband service.

Southern Markets Make List of Least Taxed

Houston, Jacksonville and Memphis were the three Southern markets that made Kiplinger's top 10 for U.S. markets with the lowest tax burden. Other markets of note placing in the top 10 outside the South included Las Vegas, Manchester, N.H., Phoenix and Seattle.

Textile Leaders Plead Case

In the summer, U.S. textile industry officials formally asked the federal government to place temporary quotas on sock exports from China. China has increased its sock exports to the U.S. by over 2,000 percent in the last two years, from 462,000 dozen pairs to 22 million. Since 1999, U.S. sock makers' share of the domestic market has dropped from 75 percent to almost 40 percent. Four U.S. textile associations petitioned the Department of Commerce in an effort to save the nation's sock industry, much of which is located in the American South.

Alabama Expected to Jump to Third in Auto Manufacturing

According to a report done by the Council of State Governments, Alabama, which now ranks sixth among auto-producing states, will vault to the third spot when Hyundai starts production in 2005. Since Mercedes announced it would build an assembly plant in Alabama in 1993, the state has spent over $800 million in incentives for original equipment manufacturers' Mercedes, Honda, Toyota and Hyundai and the hundreds of suppliers those automakers have attracted.

Carolina's Textile Industry Holding On

You've read about North and South Carolina's job losses in the textile industry. Those losses have been compounded by others in states in the South, specifically Virginia, Alabama and Georgia. With all of the job losses announced by the textile industry in the Carolinas, one might think they have no textile industry left. Nothing could be further from the truth. Textiles still represent the largest employment sector in North Carolina at 15 percent. South Carolina's percentage is even higher with nearly 20 percent of the work force in textiles.

GM Cutting Jobs in Tennessee

Just a week after General Motors announced it was investing $500 million at its Saturn plant in Spring Hill, Tenn., it said it would eliminate about 400 jobs at the facility. On August 12, GM officials said one of the three job crews that builds the Saturn Ion, a compact model, would be dissolved. In July, the local autoworker union agreed to a new contract that essentially gave total control of plant decisions to GM. GM employs over 5,500 workers at its Saturn assembly plant in Spring Hill.

National Center for Hydrogen Research Breaks Ground in South Carolina

In mid-August, government, university and industry officials broke ground on Aiken County, S.C.'s National Center for Hydrogen Research. The unique 60,000-square-foot facility is dedicated to hydrogen technology research, development and commercialization. The $9.2 million center, located in Aiken County's Savannah River Research Campus, will bring together scientists, industries and universities to develop hydrogen fuel technology to its full potential.

The nearby Savannah River National Laboratory has 50 years of experience at producing, handling and storing hydrogen for stationary and automotive purposes. SRNL will work with the University of South Carolina's National Science Foundation Fuel Center of Excellence in helping establish South Carolina and Aiken County as one of the world's centers for hydrogen fuel technologies.

Scheduled to open in 2005, the center will contain more than 50,000 square feet of lab space. Approximately 50 researchers and technicians will form the initial staff at the center. Plans include adding 40 more researchers within two years.

The center's structure will allow for technology transfer between researchers and industry, paving the way for other hydrogen-related industry to locate in the Aiken area. At the groundbreaking ceremony, officials estimated that the new hydrogen center will help create nearly 40,000 jobs in South Carolina by 2020.

Kansas Restructures Work Force Development

For the first time in more than 30 years, Kansas is implementing a major restructuring of its work force development system to make it more responsive to the needs of employers and job seekers. The new system is called Kansas 1st. It combines business-related programs with programs directed at job seekers to create a seamless system serving employers, job seekers and educational institutions. As partners in Kansas 1st, approximately 240 employees of the Employment and Training Division of the Kansas Department of Human Resources, plus 40 other support positions, officially became Kansas Department of Commerce employees on July 1. The creation of the new work force development system is part of Kansas' Economic Revitalization Plan.

Austin Named "Coolest" City

Forbes magazine has named Austin America's "coolest" city. Other Southern markets making Forbes' list include Atlanta, Washington D.C., and Miami.

Austin Best for Hispanics

Austin, Tex., was recently named the best place for Hispanics to live and work in the U.S. according to Hispanic magazine. Austin was followed by Miami, San Diego, San Antonio and El Paso.

South Lands Three Markets on Biotech Dozen

The bio-industry's strongholds remain outside the South, yet the region is moving up. Raleigh-Durham-Chapel Hill ranked third in the Milken Institute's 2004 Biotech Index, a ranking of the top metros in the U.S. in life sciences. The Washington, D.C.-Baltimore-Northern Virginia region ranked sixth in the study followed by Austin-San Marcos being ranked 12th. San Diego ranked as the most active biotech market in the U.S. followed by Boston.

GM Texas Plant Marks 50 Years in Texas, $160M Investment Announced

In 1954 General Motors opened its assembly plant in Arlington, Tex., which is located in the center of the Dallas/Fort Worth marketplace. At the time Arlington had a population of 8,000 persons. By 1964, Arlington's population topped 60,000. GM celebrated the 50th anniversary of its Arlington facility by announcing it would invest $160 million into the assembly operation "for future production." The plant employs over 3,000 workers and produces about 250,000 SUVs annually. The Arlington assembly plant was recently named in the Harbour Report as the most efficient producer of full-size SUVs in North America.

John Hopkins' Research Tops $1 Billion

John Hopkins University invested over $1 billion in research in fiscal year 2003, making it the No. 1 institution in research dollars spent in the U.S. for the 24th straight year according to the National Science Foundation. It's the first time any research institution has ever passed the $1 billion threshold in a year.

University of North Carolina Launching Genomics Research Lab

The University of North Carolina at Chapel Hill is planning a $245 million science campus that it hopes will move the school to the top of genomics and biotech research. About $100 million of the $245 million is slated for a 200,000-square-foot genomics research laboratory facility. The university just completed its Medical Biomolecular Research building that represented a $65 million investment.

Ford Moving Production from Ohio to Missouri

Ford Motor Co. is moving assembly work of its Mercury Mariner and Ford Escape models from its plant in Avon Lake, Ohio to its facility in Claycomo, Mo. The Kansas City-area Ford plant currently builds the F-150 pickup, the Escape and the Mazda Tribute. Ford is consolidating its Lorain, Ohio plant with the one in Avon Lake. The relocation of production to Missouri will not lead to additional jobs at the Claymoco facility, but it will ensure that no layoffs are made at the 6,000-employee plant.

Kansas GM Plant Expanding

Up to 300 new jobs will be created at the General Motors Fairfax Assembly plant in Kansas City, Kan. by 2007 if the city and county governments there approve tax breaks for the automaker. Officials with Wyandotte County and Kansas City, Kan., announced in August that GM plans to produce a third mid-sized model at the plant. It has been reported that GM wants to add 55,000 additional square feet for the expansion. The plant currently totals about three million square feet. GM recently retooled the Fairfax facility with a $722 million investment to build the Malibu sedan and its sports model. The automaker has announced it will build a hybrid powered Malibu beginning in 2008.

Nissan Continues Love Affair with Tennessee

Few companies have shown their love for a state more than Nissan has for Tennessee. In the early 1980s the Japanese automaker invested hundreds of millions in its first U.S. assembly plant in Smyrna, Tenn. That plant has expanded numerous times to the tune of several billion dollars. The assembly plant in Smyrna has also drawn hundreds of suppliers to the Volunteer State. Nissan has also made significant investments throughout the state, especially in the rural town of Decherd, where it built an engine plant. That plant saw a $500 million expansion announced in 2003. In late July, Nissan again expressed its love for Tennessee when it announced it would build a $47.3 million crankshaft facility next to its engine plant in Decherd. The crankshafts coming from the Decherd factory will eventually be installed in every vehicle Nissan makes at its assembly plants in Smyrna and in Canton, Miss.

July

No New Plant for Georgia: Ford to Retool Hapeville

In the last year DaimlerChrysler backed off building a new truck assembly plant near Savannah and now Ford has decided not to build a new facility in Georgia as well. But at least economic development officials in Georgia got the next best thing. After considering sites for a new assembly plant east and west of Atlanta, Ford officials have decided to retool their plant in Hapeville, Ga. The plant, which produces the Ford Taurus and Mercury Sable brands, will apparently assemble a new sedan and SUV under the Lincoln nameplate. As of mid-July, Ford officials have not announced the retooling of the plant. However, suppliers to Ford said the cost of refurbishing the 56-year-old facility located near Atlanta could reach $750 million.

Mississippi Passes Tort Reform Act

In the summer quarter the state of Mississippi passed a new bill limiting damages incurred by individuals, business, industry and the medical profession. Caps on punitive damages in the new law are based on the defendant's net worth beginning with a two percent cap for a net worth between $0 and $50 million.

Bill to Criminalize Stem Cell Research Shot Down in Missouri

Missouri Sen. Matt Bartle, R-Lee's Summit, proposed a bill in early summer to the Missouri General Assembly that would have criminalized stem cell research in the state, essentially snuffing out Missouri's growing life sciences industry. But Missouri Sen. Anita Yeckel cast the single swing vote that kept Bartle's bill from emerging from committee. More specifically, Bartle wanted to ban therapeutic cloning, a procedure that creates cells for stem cell research. Yet, Yeckel, a Republican and Catholic, single-handedly stopped Bartles ban on stem cell. Science vs. faith battles will continue for years in the bio industry.

Houston, Atlanta Near Top of Fortune 500 Ranking

Houston and Atlanta are home to more Fortune 500 headquarters now than any other U.S. market other than New York. Houston is second, followed by Atlanta, which is tied with Chicago for third place.

Survey Cites Kansas

A new survey shows that Kansas is the most business-friendly state in the nation. The Pacific Institute for Public Policy, based in San Francisco, conducted the survey for Forbes magazine. Kansas' No. 1 ranking is based on a comparison of 143 variables, including tax rates, state spending, income redistribution, tort laws, right-to-work and wage laws, occupational licensing, environmental regulations and the number of government agencies.

Atlanta Metro Will Top 7 Million in 25 Years

Officials with the Atlanta Regional Commission predict Atlanta's population will top 7 million within 25 years. It currently stands at around 4.5 million. To deal with the expected growth, the ARC has proposed a $50 billion transportation plan over the next 25 years called Mobility 2030. The plan calls for some expanded roads, an enhanced rapid transit system, new high-occupancy vehicle lanes and better synchronization of traffic lights.

Six Southern States Earn S&P "AAA" Rating

Virginia, North Carolina, Georgia, South Carolina, Missouri and Maryland earned Standard & Poor's "AAA" credit rating this year, the agency's highest rating it gives out. The six Southern states were joined this year by Minnesota, Delaware and Utah as the nine states in the U.S. with S&P's highest credit rating.

Dell Set Sights on NC

Newspapers in North Carolina have reported that Dell Inc. is searching the state for a manufacturing and assembly plant that would house up to 2,000 workers. According to the News & Observer in Raleigh the North Carolina Department of Commerce, officials with the North Carolina community college system and economic developers in the Piedmont Triad region of the state are working on a package to lure the plant to the Greensboro-Winston-Salem-High Point area. The Piedmont Triad International Airport, which serves the markets of Winston-Salem, Greensboro and High Point, is where FedEx chose to build a large air packaging hub. The proposed hub is a critical factor in Dell's site search plans. Dell's investment in the proposed plant is estimated to be close to $250 million.

Money Cites Southern Markets

Money Magazine has named Jacksonville, El Paso, Raleigh and Atlanta as four of the top seven retirement markets in the U.S. The magazine used cost of living, weather, crime rates and the environment as factors in its ranking.

Top Markets for African-Americans are in the South

According to Black Enterprise magazine, nine of the top 10 cities for African-American to live and work are in the South. The magazine's top 10 from one to 10 are Atlanta, Washington, D.C., Dallas, Nashville, Houston, Charlotte, Birmingham, Memphis, Columbus, Ohio and Baltimore.

UT San Antonio to Spend $500M

The University of Texas San Antonio is launching an expansion that will include the creation of three new research centers. The school will build the San Antonio Institute for Cellular and Molecular Primatology, the Institute for Aging Research and the Institute for Bioengineering and Translational Research. Together the three centers represent as much as $500 million in construction.

June

Big Aviation/Aerospace Deal in the Air

Rumors are flying that a large aviation or aerospace project is about to be announced in the South. In the running for the deal include the states of Alabama, Mississippi Georgia and Florida. The deal is expected to create more than 1,000 jobs.

South's Economy Hanging Tough

In April the U.S. saw 1,458 mass layoff events, led by the West with 599 and the Northeast with 332. In the same month the South experienced only 292 mass layoffs. In addition, only 27,553 initial unemployment claims occurred in the South out of a total of 157,314 in the U.S. That means the South was responsible for 20 percent of mass layoffs in the U.S. in April of 2004 and only 18 percent of initial unemployment claims. It should be noted that the South holds more than 36 percent of the nation's population, the highest of any U.S. region.

South's Manufacturing Employment Hanging Almost as Tough

While the South's mass layoffs and unemployment claims are by far the lowest in the nation, some states in the South have seen an increase in manufacturing jobs in the last several months. A handful has even seen an increase in manufacturing employment in the last year. Those are Louisiana, Missouri and West Virginia. Overall, the South has lost about 88,000 manufacturing jobs from May of 2003 to April of 2004. But the U.S. has lost about 250,000 manufacturing jobs in the last year, meaning about 35 percent of job losses in the manufacturing sector have come from the South. The South is currently home to 38 percent of all manufacturing employment in the U.S. There are 5.22 million people employed in manufacturing in the South and 14.623 million in the U.S.

Chrysler Investing $115 Million in Missouri Factory

Just over a year ago, Missouri officials were scrambling to save their automotive industry, which includes four major domestic auto assembly plants. Rumors surfaced that indicated Ford and Chrysler would close or significantly reduce their presence in the Show Me State. Those rumors have not materialized. In fact, if anything, Missouri's efforts to retain their existing automotive base have been remarkably successful. Chrysler officials announced in June an investment of $115 million in their plant in St. Louis. The investment is being made to increase production of Chrysler's new minivan products, which include the Dodge version. The Detroit automaker apparently chose to expand the St. Louis plant.

DirecTV on a Hiring Spree in the South

DirecTV announced it is opening a customer call center in Tulsa that will create 1,300 new jobs. At the same time, the company announced it will open a similar call center in Huntsville, Ala. that will create 700 new jobs. Both call centers are expected to be operational this year and are the result of new satellite television services offered by DirecTV.

Nissan's Mississippi Plant Rolls Out First Altima

On Monday June 14, Nissan produced its first Altima mid-size sedan at its newest assembly plant in Canton, Miss. The Altima represents the fifth model to roll out of the one-year-old plant. Nissan also makes Infiniti QX56 SUV and the Nissan Titan, Quest and Armada. Nissan's 20-year-old Smyrna, Tenn. assembly plant, which was recently named the most efficient car plant in America by Harbour Consulting, also manufactures the Altima.

Huge Port Deal in Virginia

A.P. Moller-Maersk announced it will build a $450 million container terminal in Portsmouth, Va., a city located in the burgeoning Hampton Roads region, which includes the cities of Norfolk, Newport News and Virginia Beach. The terminal, which will encompass 300 acres, will propel the ports in the Hampton Roads region to the No. 2 position on the Eastern Seaboard, behind only the ports that make up the New York and New Jersey region. The new port will serve A.P. Moller-Maersk subsidiary Maersk Sealand, the world's largest shipping line. A.P. Moller-Maersk is based in Denmark.

Southern Business & Development Names Alabama "State of the Year"

Southern Business & Development magazine (www.sb-d.com), the parent company of SouthernAutoCorridor.com, named Alabama "State of the Year" in its latest edition. Each year SB&D selects one state in the South that has exemplified outstanding economic development based on projects announced in the previous calendar year. The state was cited for its high number of deals with 200 jobs or more and/or $30 million in investment compared to its historical average. Alabama turned 43 deals with 200 jobs and/or $30 million in investment in calendar year 2003. On a per capita basis, that ranked Alabama No. 1 in the South. Other states cited in the annual ranking included Georgia, Louisiana and Virginia. States that have earned SB&D's "State of the Year" since 1993, when it was first published (and how many times), include Virginia (3), Texas (2), Florida (2), North Carolina (2), Alabama (2), Tennessee (1) and Georgia (1).

Alabama Rings Up 32 New Automotive Plants in 2003

What drives the Southern Auto Corridor? Without question it's the OEMs. New plants in the SAC are like magnets for new job creation. That was certainly the case for Alabama in 2003 when 32 new automotive suppliers announced they would build in the state. Most of those that announced will supply Hyundai's new plant in Montgomery. However, several of the larger suppliers that chose Alabama for new facilities are supplying the expanded Mercedes-Benz and Honda plants in the state.

Toyo Deal Finalized, Finally

Toyo Tire & Rubber will build its first consumer tire plant in the U.S. in Bartow County, Ga. The company's choice of a site near Cartersville, Ga. had been a public debate for months. Some locals in Bartow County objected to the plant's location and the deal appeared to be dead. However, issues were settled and the Japanese tire maker will invest $150 million in the deal, which is expected to employ 350 workers initially. Toyo will produce high performance tires for passenger and light truck vehicles at the facility, which will be operational in 2006.

Nissan's Tennessee Plant Tops All in Efficient Production

The results of the 2003 Harbour Report North America was made public in June. The annual report ranks assembly plants and other manufacturing facilities in efficiency based on labor hours per vehicle built. The report also ranks plants based on vehicle type such as subcompact all the way up to luxury vehicles. Engine, stamping and transmission plants are ranked as well. Nissan's Smyrna, Tenn. plant ranked No. 1 in the U.S. with 15.33 hours per vehicle. Toyota's engine plants in West Virginia and Kentucky were also cited. For more information on the Harbour Report go to www.harbourinc.com.

Koch Foods Adding 60 Workers in Chattanooga

Koch Foods announced a $19 million expansion for its Chattanooga, Tenn. complex that will result in the creation of 60 new jobs. Koch is an integrated poultry and food company focused on food service, upscale restaurant trade and exports. The company is headquartered in Chicago and has other facilities in the South in Georgia and Mississippi.

NETCONN Expands in Maryland

NETCONN Solutions is expanding its presence in Hagerstown/Washington County, Md. The company is a systems integration and consulting firm specializing in telecommunications and information system design. The company is adding 40 workers at its facility in Washington County.

Central Tennessee Company Expands

Porter-Walker LLC, one of Tennessee's largest utility and industrial equipment suppliers, broke ground on a new 72,500-square-foot facility in Columbia, Tenn. The new facility is located in the Maury County Industrial Park. The company has been in operation in Columbia for almost 100 years. The number of new jobs created has not been determined as of yet.

Big Deal in Tampa

Depository Trust & Clearing Corp., the world's largest provider of tech infrastructure for stock, mutual fund and bond transactions, is planning a 500 employee operation in Tampa. The deal was announced on the heels of a June announcement that Pinnacle Financial will open a sales and support center in Tampa that will create 175 new jobs. DTCC looked at over 25 sites in the South before choosing Tampa. The company is headquartered in New York City and cited 9/11 as a reason to disperse some of its operations to the South.

Big Lots Opens Distribution Center near OKC

Big Lots held a grand opening for its new $70 million, 1.2 million-square-foot distribution center in Durant, Okla. The center will eventually house over 500 workers, and will help serve over 1,400 Big Lot stores in the U.S. Big Lots is headquartered in Ohio and had revenues over $4 billion in 2003.

Pella Adding Jobs in Western Kentucky

Pella Corp., which chose Murray, Ky. for its newest plant two years ago, is expanding that facility. The company is adding 200 jobs to meet demand for its window and door products being sold by Lowe's stores.

Tecumseh Relocating Operations to Mississippi

Tecumseh Products, which recently laid off 140 workers at its plant in Tupelo, Miss., is moving some operations to Tupelo from Michigan. The company is expected to hire up to 125 workers in the move and many of those may end up being workers previously laid off.

Del Monte Picks Fort Worth for Big Box

Del Monte Foods will build a 700,000-square-foot distribution center in north Fort Worth, consolidating several regional distribution hubs. Up to 400 jobs are expected to be created by the food company.

Asurion Adding Workers in Nashville

Asurion Corp., which recently relocated its headquarters from California to Nashville, is adding 200 workers to its call center operations in the Music City. Asurion provides services for wireless phone customers and has already created over 600 jobs in Nashville in the past year.

Hundreds of New Jobs Announced in South Georgia

Mississippi-based Sanderson Farms is building two new poultry processing facilities in South Georgia. The two new plants, a hatchery and feed mill near Adel, Ga., and a wastewater treatment facility near Moultrie, will cost $97 million and result in over 1,700 new jobs.

Center Breaks Ground in Mississippi

Sleep Innovations broke ground in June on its 302,000-square-foot manufacturing and distribution center in Baldwyn, Miss. The company is expected to hire 300 workers within three years at the new facility.

 

May

Infineon Invests $1 Billion in Richmond

The move for chipmakers to 300mm wafers is paying off for the Richmond, Va. area. Infineon Technologies is investing $1 billion and adding about 1,000 new workers at its Virginia chip plant. The expansion will enable the plant to produce advanced DRAM chips on 300mm wafers. Production is expected to begin early in 2005.

Biotech Bill Passes in Georgia

The Georgia Senate has passed a bill to increase the amount of state seed money a life sciences company can receive to $1 million. The bill modifies a statute passed by a voter referendum in 1989. The transactions must be authorized by the state-funded Advanced Technology Development Center at Georgia Tech. For a loan to be approved, every state dollar loaned must be matched by $3 from the private sector.

Atlanta Leads U.S. in Single-Family Housing

For the 13th year in a row, the Greater Atlanta metro area led the nation in housing activity, with 53,750 single-family home permits last year, according to the Greater Atlanta Home Builders Association. Rounding out the top five housing markets for single-family permits were the metropolitan areas of Phoenix-Mesa, Ariz. with 46,590; Riverside-San Bernardino, Calif. with 35,730; Houston with 33,970; and Washington, D.C. with 30,760.

Atlanta Top U-Haul Movers' Destination

Atlanta maintained its No. 1 position in U-Haul's annual 2003 national migration trend report as the city with the most movers arriving for the fourth year in a row. Among cities with more than 10,000 families moving, Miami had the highest percentage of growth, with 7.5 percent more families moving into the area than out. Dallas ranked second behind Atlanta. Houston ranked third, and Chicago and New York came in fourth and fifth respectively.

Kentucky Unveils Tax-Reform Program

Kentucky Gov. Ernie Fletcher has unveiled a tax-reform plan that would repeal the corporate license tax, rendering moot the so-called double tax on Kentucky-based companies that resulted from the decision in the Illinois Tool Works Case. The reform would also reduce the maximum corporate income tax rate to 6 percent from 8.5 percent and create a tax-incentive program to improve the Enterprise Zone program that will expire in a few years. The program would also broaden the corporate tax base to include limited liability entities.

Steel Dynamics Scouting for Southern Sites

Indiana-based steel maker Steel Dynamics is scouting manufacturing sites in several southeastern states. The company's New Millennium Building Systems division is undergoing site selection discussions for a new joist and deck fabrication plant that would create about 200 jobs. Alabama, Georgia, Florida, South Carolina, and North Carolina are in the running.

Pinnacle Foods Expanding in Fayetteville, Ark

Pinnacle Foods Corporation, a major employer in Fayetteville since 1955, has announced second expansion in two years. The company, which produces Hungry Man® and Swanson® frozen food, will make an $8 million investment and add 150 jobs to the payroll, bringing Pinnacle's total workforce in Fayetteville to more than 900. An additional five to 10 professional positions will also be added as a direct result of the expansion.

Call Center Expands in Orlando

Adelphia Communications plans to open a call center in Orlando that could employ 450 workers. The Colorado-based company will open a 50,000-square-foot center that will house its national sales center. The company also considered Arizona, but chose Orlando because of the area's workforce.

Citicorp Expands Call Center in Louisville

Citicorp Credit Services, Inc. is investing more than $35.8 million to expand its call center operations in Louisville. The company will build a 170,000 square-foot office building that will be completed by the end of the year. The expansion will create 1,620 jobs by the end of 2005. The new facility will be part of a larger, $100 million business park.

Call Center to Employ 1,300 in Shreveport

The U.S. Support Company announced in the spring quarter it is locating a new inbound customer service center facility in Shreveport. The company will create 750 jobs in the first year and a total of 1,300 by the end of the second year of operations. U.S. Support represents a variety of Fortune 500 companies and is headquartered in Fort Lauderdale.

Verizon Expands in Wilmington, N.C.

Verizon Wireless plans to build a 150,000-square-foot call center in Wilmington. The company is investing $29 million in the project that will bring 1,200 jobs to the region. Verizon is receiving about $8.5 million in city and state incentives for new job creation.

Time Warner Cable Expands in Charlotte

Time Warner Cable is expanding its operations in Charlotte to the tune of $36 million. The company will construct a building adjacent to its existing offices and will add 350 jobs. The state helped lure the investment by agreeing to incentives worth up to $4.2 million over the next 10 years.

New Distribution Center Announced in Ardmore, Okla.

Dot Foods has purchased a vacant 120,000-square-foot warehouse in Ardmore, Okla. The company also purchased an adjoining tract of land from the Ardmore Development Authority and plans to add 50,000 square feet of freezer and cooler space. The deal is expected to create 150 new jobs.

Electrolux Adds 700 Jobs

Electrolux Home Products announced plans this spring to add 700 jobs at its manufacturing plant in Springfield, Tenn. The company makes kitchen ranges at the plant.

USAA to Add More Than 500 Jobs in San Antonio

Insurance and financial-services company USAA recently announced that it is beefing up its workforce by adding more than 500 jobs in San Antonio, ranging from member-services representatives to management positions.

Cost Plus Doubles Size of Virginia Distribution Center

Cost Plus Inc., a home furnishing retailer, plans to expand its 500,000-square-foot distribution center in Isle of Wight, doubling its current size. The expansion will add 190 jobs. The project includes the purchase of its leased facility and will cost $24 million.


April

QUIZ

Match these 2002 foreign direct investment totals with the correct U.S. regions (East, Midwest, South and West). (a) $412 billion; (b) $193 billion; (c) $201 billion; (d) $266 billion.

(Scroll down for answer)

South's Semiconductor Industry Expanding

In the mid-1990s almost every state in the South courted the semiconductor industry like no other industry. Millions were spent marketing sites for what was believed to be a significant number of new semiconductor startups throughout the region. Two were announced in Virginia in the mid-'90s, yet only one was built there. Texas saw a handful of expansions of existing chip plants. But the expected semiconductor boon of the mid-1990s was a bust.

Last year (calendar year 2003) saw three large semiconductor deals in the South with Texas Instruments, Sematech and Samsung. All of those deals occurred in the state of Texas. The Texas Instruments deal is the first new semiconductor plant to be built in the South in almost eight years.

Infineon Technologies is the latest wafer maker to expand in the South. Infineon announced in April it is expanding its Henrico County (Richmond) semiconductor facility in order to produce 300-mm wafers. The company is investing over $1 billion (that's with a "b") in the deal, which will create another 1,200 new jobs to the 1,700 already working at the plant.

Honda Alabama Plant Rolls Out First Pilot SUVs

Honda officially rolled out new Pilot model SUVs for the first time on April 27 at its plant in Lincoln, Ala. The Pilot rollout marks the startup of the second production line at the plant. Honda added 1.2 million square feet to its existing 1.7 million-square-foot plant for the second line. The second line is capable of producing 150,000 new vehicles a year.

Great Start for Mississippi

The first quarter of 2004 saw companies invest over $476 million in new and expanded projects in the state of Mississippi. Significant announcements in the Magnolia State in the first quarter included those made by FedEx, and auto suppliers' Textron Fastening Systems and Faurecia.

Bidding Begins for FTAA Headquarters

Atlanta and Miami have both set their sites on landing the Free Trade Area of the Americas' headquarters. The two southern cities are about 650 miles apart, but Miami is considered the U.S. front-runner because of its trade relationships with Latin America and the Caribbean. Nine other cities are also competing for the headquarters that would bring 11,000 new jobs to the city of choice over a 10-year period.

KPMG Ranks Cost of Doing Business

A KPMG study of 24 U.S. cities with a population of more than 1.5 million reveals Atlanta and Tampa are the two cities with the lowest cost of doing business. Only Puerto Rico's costs were lower. St. Louis ranked eighth and Houston ranked 18th on the least expensive list while San Jose and New York ranked the most expensive. KPMG's "Competitive Alternatives" study measures 27 location-sensitive business operating costs for 12 specific types of business over a 10-year span. In a similar study of mid-sized markets, Greenville-Spartanburg, S.C. is the least costly city among 11 locations surveyed, Nashville ranked second lowest and Hartford, Conn. was the most expensive place to do business among midsized U.S. cities studied.

Biotech Bill Passes in Georgia

The Georgia Senate has passed a bill to increase the amount of state seed money a company can receive to $1 million. The bill modifies a statute passed by a voter referendum in 1989. The transactions must be authorized by the state-funded Advanced Technology Development Center at Georgia Tech. For a loan to be approved, every state dollar loaned must be matched by $3 from the private sector.

Atlanta Leads U.S. in Single-Family Housing

For the 13th year in a row, the Greater Atlanta metro area led the nation in housing activity, with 53,750 single-family home permits last year, according to the Greater Atlanta Home Builders Association. Rounding out the top five housing markets for single-family permits were the metropolitan areas of Phoenix-Mesa, Ariz. with 46,590; Riverside-San Bernardino, Calif. with 35,730; Houston with 33,970; and Washington, D.C. with 30,760.

Kentucky Unveils Tax-Reform Program

Kentucky Gov. Ernie Fletcher has unveiled a tax-reform plan that would repeal the corporate license tax, rendering moot the so-called double tax on Kentucky-based companies that resulted from the decision in the Illinois Tool Works Case. The reform would also reduce the maximum corporate income tax rate to 6 percent from 8.5 percent and create a tax-incentive program to improve the Enterprise Zone program that will expire in a few years. The program would also broaden the corporate tax base to include limited liability entities.

BASF Eyes Baton Rouge

Agribusiness-giant BASF is eyeing Baton Rouge as a possible location for a storage facility at its nearby Geismar site. The decision is pending as the company conducts a study to determine if liquid storage tanks and a logistics center at the Geismar site would reduce costs and enhance environmental performance.

Charlotte Manufacturers Launch Initiative

The Charlotte Chamber's Manufacturers Council is launching an initiative called the Manufacturers Business Alliance in hopes of expanding the council's membership and to promote the growth of local manufacturing.

Light-Rail Systems Gets $1OM Grant

The U.S. Department of Transportation is giving a $10.3 million grant to Charlotte's proposed light-rail system. The grant will fund final design work for the rail line's southern corridor. The 10-mile rail line will connect uptown with I-485 near Pineville in 2006. An estimated 16,000 passengers will use the service daily.

Mixed-Use Industrial Development Planned in San Antonio

Los Angeles-based firm Holly Hills Development has purchased 522 acres of land directly across the street from the planned Toyota Motor Manufacturing Texas assembly plant. Original plans for the land were to build industrial facilities that would capitalize on the Toyota plant, now the plans have changed. The new goal is to carve out smaller pieces for specific uses, like mixed-use projects including restaurants, hotels and convenience stories.

Studies Rank South's Office and Job Markets

Austin's office market is ranked as the most volatile in the country, according to Fitch Ratings' Property Market Metric study. Austin ranked five on a scale of one to five, with five being the worst. Dallas, Fort Worth, Houston and San Antonio ranked a four, as did Atlanta and Charlotte. At the same time, Austin ranks fourth on a new list of U.S. cities with the hottest job markets compiled by Business 2.0. Raleigh-Durham, N.C., topped the magazine's list, followed by San Jose, Calif.; Washington, D.C.; Austin; and Atlanta. At No. 18, Dallas was the only other Texas city on the list.

Texas Woos California Companies

Texas is the top destination for nearly 40 percent of California companies that leave the Golden State, according to a study by Boston-based Bain & Co. The study cites Texas' favorable regulatory climate, with approval of residential projects taking 33 weeks in California compared with eight in Texas. Also, the study notes that since 1997, the number of film production days in California has plunged by more than 60 percent. During the same period, the number of production days in Texas has skyrocketed by more than 300 percent, according to the study.

Vanderbilt Adds $110M Facility

Vanderbilt University Medical Center is constructing a $110 million medical research building. The new building will compliment its Light Hall and Langford Auditorium and will add 200,000 square feet of usable research space. The project will also connect the two buildings and expand both lobbies. The building will be named MRB IV. Construction is expected to be completed by 2006.

Government Promotes Biotech Crops with New Web Site

Several U.S. government agencies have banded together to develop a web site to promote genetically modified crops. The site provides information about everything from genetically modified beets to tomatoes in a taxpayer-funded project to promote the crops worldwide. It is designed to show that the government "has a coordinated, risk-based system to ensure new biotechnology products are safe for the environment and human and animal health," the Web site says. The U.S. filed a case with the World Trade Organization in May 2003 against the European Union over its five-year moratorium on approving genetically modified products.

Maryland Bill Axes Biotech Tax Credit

A Maryland Senate Committee has axed a bill that would have granted tax credits for investments in fledgling biotech companies. Lawmakers had hoped the bill would boost the region's biotech industry by returning 33 cents on every dollar an individual or investment firm put into a biotech company. Brian Feldman, the author of the Biotech Investment Incentive Act, is now pushing an amended version of the bill that would return 60 cents of every dollar invested, but not until 2008. Companies would have to invest $250,000 to be eligible for the tax credit. Individuals would have to invest $30,000.

Steel Dynamics Scouting for Southern Sites

Indiana-based steel maker Steel Dynamics is scouting manufacturing sites in South Carolina and several other southeastern states. The company's New Millennium Building Systems division is undergoing site selection discussions for a new joist and deck fabrication plant that would create about 200 jobs. Alabama, Georgia, Florida and North Carolina are also in the running.

Atlanta Top U-Haul Movers' Destination

Atlanta maintained its No. 1 position in U-Haul's annual 2003 national migration trend report as the city with the most movers arriving for the fourth year in a row. Among cities with more than 10,000 families moving, Miami had the highest percentage of growth, with 7.5 percent more families moving into the area than out. Dallas ranked second behind Atlanta. Houston ranked third, and Chicago and New York came in fourth and fifth respectively.

Baltimore Life Sciences Park

Maryland is expected to spend $26.5 million on the East Baltimore Life Science Park over the next five years. The park will cover 22 acres of an ongoing 80-acre redevelopment of East Baltimore near Johns Hopkins. The park will include 2 million square feet of research space, a biotech incubator for startups, a new mass transit connection, and green space. The project will create about 8,000 new jobs.

Texas Ranks Fifth for Nanotech

A Small Times magazine study ranks Texas number five among hot spots in the country for nanotechnology and microsystems business development. Texas is considered the most affordable of states in the Top 10. California leads the list of hot spots, followed by Massachusetts, New Mexico and New York. The magazine lists Arizona, Maryland, North Carolina and Washington as states to watch.

Maryland Boasts Fourth-Strongest Tech Economy

A Milken Institute study says Maryland has the fourth-strongest tech economy in the nation, behind California, Colorado and Virginia. The report analyzes 75 indicators of technology strength to come up with its ranking of all 50 states. Those indicators are lumped into five categories: research and development; entrepreneurial activity; education; talent, specifically the concentration of scientists and engineers; and the technology sector's prominence in the business community.

Auto Parts Supplier Expands in Dallas County, Alabama

Renosol Corp. plans to hire 120 workers for a $9 million, 50,000-square-foot facility in Dallas County's Craig Field Industrial Park. The company will use the facility to produce molded automotive eating parts used at the Hyundai Motor Co.'s plant in Montgomery.

University of Florida Building Biopharma Facility

The U.S. Economic Development Commission has awarded a $2 million grant to the University of Florida to fund a biopharmaceutical manufacturing facility. That money would fund the rehabilitation of one of two buildings the university purchased to house the Center for Excellence for Regenerative Health Biotechnology. That facility was established in 2003 with a $10 million state grant matched by $10 million from the university.

Fidelity Expands in Jacksonville

Fidelity National Financial, Inc. has purchased a 5.9-acre parcel of land adjacent to its Jacksonville Riverside site for $12 million to expand its headquarters and develop a residential/hospitality project. The expansion includes a 280,000-square-foot office building to accommodate over 1,000 employees relocating to Jacksonville from California.

Call Center Expands in Orlando

Adelphia Communications plans to open a call center in Orlando that could employ 450 workers. The Colorado-based company will open a 50,000-square-foot center that will house its national sales center. The company also considered Arizona, but chose Orlando because of the area's workforce.

Verizon Opens Call Center in Florida

Verizon Wireless is opening a new call center at its Lakeland offices. The company renovated a 17,000-square-foot office to house 250 new workers and plans to hire 1,000 employees for eight call centers in Florida, California, Idaho, Maine, Pennsylvania and Massachusetts.

Kraft Locates Latin American HQ

Kraft Foods Latin America is building its regional headquarters in South Florida. The new facility, which is being built in Coral Gables, will house about 130 employees and should be completed by late June. Kraft will receive about $530,000 in state and county incentives for the move.

Office Depot Builds New HQ in South Florida

Office Depot is investing $100 million in a 600,000-square-foot facility that will serve as the company's corporate headquarters. The company acquired 23 acres of land, which served as the former IBM Campus in Boca Raton, for $11.6 million.

AirTran Launches Pilot Training Center in Atlanta

AirTran Airways has officially launched its new pilot training center in Atlanta. Recurrent and new hire training for more than 850 pilots will take place at the $75 million facility that will also serve Midwest Airlines and Boeing Business Jet operators. The two-story building sits on six acres in College Park at the Hartsfield-Jackson Atlanta International Airport. The 52,000-square-foot facility will employ 15 full-time workers.

SouthTrust Expands in Midtown Atlanta

As part of the trend toward Atlanta bank growth, SouthTrust Corp., a Birmingham, Ala.-based bank, has moved into new office space at Atlantic Station in Midtown Atlanta. SouthTrust has moved three of its four primary divisions to Atlanta to date, employing about 1,500 in the area.

Del Monte Eyes Atlanta for Distribution Hub

San Francisco-based Del Monte Foods Co. is scouting metro Atlanta for land to build a 600,000 to 700,000-square-foot distribution facility that would serve its southeastern region. This is one of the largest potential industrial deals in Atlanta so far this year. Birmingham is also competing for the deal. Del Monte will consolidate two smaller warehouses in Birmingham and Florida.

Apparel Company Expands in Georgia

New Jersey-based apparel company Haband is investing $2.1 million to expanding its distribution center in Eatonton and will retain its call center in Athens. The company will add 125 new jobs. Haband plans to move its important traffic to the Port of Savannah. The company will receive a $350,000 OneGeorgia Grant.

Koch Industries Locates in Wichita

Koch Industries, Inc., a privately held diverse group of global companies, is locating its corporate management in Wichita, Kan. Koch deals in natural gas, gas liquids, chemicals, plastics and fibers, minerals and other products. The move will bring 200 executives to the city with salaries of at least $100,000 each. Koch last year purchased Invista, formerly known as DuPont Textile and Interiors, from DuPont for $4.4 billion.

Owens Corning Invests $8.8M in Kansas City

Owens Corning plans to invest $8.8 million to re-engineer and rebuild a mothball fiberglass installation production line in Kansas City, Kan. Owens Corning currently operates four production lines in the plant. The line under construction was shut down in 1999. The expansion adds 46 new high-wage union jobs to the region. The company will see a 50 percent, 10-year tax abatement on the new equipment.

Cessna Builds Plant in Kansas

Cessna Aircraft Co. is building $13 million worth of new facilities and will add 500 workers to its plant in Independence, Kan. to build its Citation Mustang. Local governments passed an incentive package that includes assistance with workforce training and plant construction costs.

Bayer Expands

Bayer HealthCare LLC's Animal Health Division is investing $14 million in a 232,000-square-foot warehouse and distribution center at the company's 52-acre site in Shawnee, Kansas. The facility will house 75 employees. Twenty-seven will relocate from a leased warehouse in Kansas City, Kan. The new center is Bayer's second big capital investment in Shawnee in the past two years. In July 2002, the company dedicated a $10 million central administration facility that serves as the North American headquarters for Bayer HealthCare's Animal Health division. Bayer's investment in the Shawnee campus now exceeds $120 million.

T-Mobile Expands in Kansas

T-Mobile USA Inc. is investing $22 million to build a service center in Lexana, Kan. that will add 110 employees. The Bellevue, Wash.-based wireless carrier will move from its 50,000-square-foot building into a new 77,000-square-foot building. Construction is expected to be complete before the end of the year.

Snowplow Manufacturer Selects Kentucky

Shepherdsville, Ky. has won the favor of Snowbear Ltd., a Canadian snowplow company and utility trailer maker. The company just opened its first U.S. manufacturing plant there. Snowbear invested $2.2 million in the 103,000-square-foot former Ziniz Inc. plant and its 10-acre site. The plant will employ 200 people. Company executives are also considering building a distribution center. If the manufacturing facility is a success, the company would construct a 100,000- to 150,000-square-foot facility.

Internet Shoe Merchant Expands in Kentucky

Zappos.com, a San Francisco-based online shoe merchant, is expanding its 120,000-square-foot distribution center in Shepherdsville by 40,000 square feet. The company will add 200 jobs in the next two years.

Citicorp Expands Call Center in Louisville

Citicorp Credit Services, Inc. is investing more than $35.8 million to expand its call center operations in Louisville. The company will build a 170,000-square-foot office building that will be completed by the end of the year. The expansion will create 1,620 jobs by the end of 2005.

Briggs & Stratton Expands in Kentucky

Briggs & Stratton, a small engine manufacturer, is investing $6.2 million to expand its operations in Murray. The company will hire an additional 100 workers and hopes to develop three types of small engines that will meet new clean-air regulations at the facility. The expansion will allow B&S to product 3.8 million engines in 2004.

Dow Chemical Unit Expands in Louisiana

UCAR Emulsion Systems, the Cary-based business unit of Dow Chemical Company, is investing $100 million over the next three years to build a new manufacturing plant in St. Charles and to make improvements to the company's existing production facilities in Alsip, Ill. and Sarnia, Ontario. The company plans to shut down manufacturing sites near Tucker, Ga. and Garland, Tex. when it opens its new facility in 2006. More than 30 new jobs will be added. The company produces latex used in paint and other products in the construction and textile markets. UES employs about 800 people at its 14 production facilities globally.

ExxonMobil Expands in Baton Rouge

ExxonMobil Chemical is building a 500,000-square-foot warehouse in north Baton Rouge to store and distribute polymers manufactured at its local plant. The $13 million facility will employ 26 workers when it opens its doors in the third quarter of 2004.

Mill Corp. Moving to Maryland

Retail Giant Mills Corp. is relocating its corporate headquarters from Rosslyn, Va. to a mixed-used development under construction in Chevy Chase, Md. Mills Corp. will occupy a 200,000-square-foot building owned by Chevy Chase Land Co. by the second quarter of 2006 at the same time the company's Rosslyn lease expires. Mills is a developer of mega malls like Potomac Mills and Arundel Mills and acquired nearly a dozen projects in 2003.

Coca-Cola Relocating Regional HQ to Maryland

Coca-Cola Enterprises is moving its mid-Atlantic regional headquarters to a new location in Columbia, Md. The soda maker searched for locations in Northern Virginia, Prince George's, Anne Arundel and Howard counties before selecting Columbia. The Atlanta-based company will lease about 30,000 square feet of space in a Class A office building in Howard County and will move 150 employees from its existing Columbia location by August.

Defense Company Expands in East Mississippi

Talley Defense Systems is investing $4 million in a manufacturing facility in Lowndes County, Miss. that will employ 50 people. The Mississippi plant will produce and assemble rocket launchers for customers including the U.S. Army, U.S. Marines and U.S. Special Operations and foreign allies. The plant is being built on a 640-acre site and should be completed within the next 12 months. The company signed a 40-year lease on the land.

FedEx Builds New Distribution Hub in Mississippi

FedEx Ground is investing $1.8 billion to build nine hubs over the next six years. The Memphis-based company has chosen a site in Olive Branch, Miss. for one of the planned distribution hubs. FedEx will build the 330,000-square-foot facility on 93 acres and employ 385 full- and part-time personnel.

Biomedical Systems Expands in St. Louis

Biomedical Systems Inc. is building a 45,000-square-foot building adjacent to its current headquarters in Maryland Heights, Mo. The estimated cost of the facility is $12 million. Biomedical Systems supplies monitoring equipment, including electrocardiogram services. The company will add a yet undetermined number of employees.

Pharma Company Expands in St. Louis

Centocor, Inc., a Horsham, Pa.-based subsidiary of Johnson & Johnson, is acquiring Wyeth Pharmaceuticals' St. Louis biopharmaceutical manufacturing facility for an undisclosed amount. The facility will allow Centocor to increase material production for products currently in its pipeline. The company develops treatments for cancer and immune-related inflammatory disorders, such as arthritis.

Fiber Maker Establishes Regional HQ in Charlotte

Invista, a textile-fabric maker famous for manufacturing products such as Teflon and Lycra, plans to establish its regional headquarters in Charlotte. Charlotte is one of four cities the company has targeted for corporate offices. Atlanta, Wichita, Kan., and the Wilmington, Del. region are also on the list. The size and location of Invista's Charlotte headquarters is yet to be determined, but company executives expect to add 160 new jobs to the region.

Areva Expands Operations in Charlotte

Areva, formerly called Framatone ANP, plans to invest $4 million in its Charlotte operations in the next four years. The expansion will create an additional 100 jobs, most of which are engineering positions with an average annual salary of $75,000. The company will receive $350,000 in state funding for equipment, machinery and infrastructure improvements. Areva develops and builds nuclear power plants and reactors and is headquartered in Paris.

Citicorp Expands Near Greensboro, N.C.

Citicorp is expanding its Guilford County operations at a site on Millstream Road, part of a future annexation area for the City of Greensboro. High Point's Piedmont Centre and a Greensboro site on Holden Road were also considered. The Millstream Road site is also home to Lucent and General Dynamics Advanced Technology Systems. The company will add at least 1,000 jobs in the county in addition to the 700 current employees in the region.

Semiconductor Company Expands in North Carolina

International Rectifier Corp., an El Segundo, Calif.-based semiconductor manufacturer, plans to open a new design center in Cary. The company hopes to hire up to 30 people during the next year.

Drug Company Expands in Morrisville, N.C.

Generic drug maker Andrx is renovating an old 500,000-square-foot plant that used to belong to Bristol-Myers Squibb. The project is worth $87 million and the company will hire at least 30 employees when the plant opens later this year.

Verizon Expands in Wilmington, N.C.

Verizon Wireless plans to build a 150,000-square-foot call center in Wilmington. The company is investing $29 million in the project that will bring 1,200 jobs to the region. Verizon is receiving about $8.5 million in city and state incentives for new job creation.

Lowe's Expands in North Carolina

Lowe's Companies is expanding its corporate offices in Mooresville, N.C.. The home improvement retailer is adding 136,000 square feet to its 400,000-square-foot facility. The company will consolidate employees from two nearby leased offices and will hire 600 new workers. Construction is scheduled for completion by September 2005.

Unilin Décor Expands in N.C.

Belgium-based Unilin Décor plans to expand its U.S. operations in Thomasville, N.C. The company already has a distribution center there. The $80 million expansion will add an additional 330 jobs to the region. The company will receive an incentive package worth nearly $12 million from the state, the county and the city.

Window Manufacturer Relocates to Rowan County, N.C.

MI Home Products, Inc., a window and door manufacturer, is relocating from Concord to neighboring Rowan County, N.C. The company purchased $7 million of land to build a 150,000-square-foot facility that will house 200 employees. MI Home Products is moving from a 70,000-square -foot building that couldn't be expanded. The new building will be expandable by 100,000 square feet.

Toolmaker Relocates from Massachusetts

Atlas Capco Compressors is relocating from Holyoke, Mass. to Rock Hill, S.C. The company will move into an 186,000-square-foot business park by the end of the year. It will assume about 70,000 square feet of space and share the rest with Chicago Pneumatic. Both companies are subsidiaries of Atlas Capco AB, a Swedish construction, automotive and mining equipment maker that reported $6.2 billion in sales last year.

Time Warner Cable Expands in Charlotte

Time Warner Cable is expanding its operations in Charlotte to the tune of $36 million. The company will construct a building adjacent to its existing offices and will add 350 jobs. The state helped lure the investment by agreeing to incentives worth up to $4.2 million over the next 10 years.

Premier Inc. Relocates to Charlotte

Premier, Inc., a provider of purchasing and analytical services for the healthcare industry, is closing its office in Oak Brook, Ill. The company will move 270 jobs to Charlotte over the next two years.

Auto Parts Maker Expands in Newton, N.C.

ZF Lemforder Corp., a German automobile parts manufacturer, is investing about $29 million to build a plant in Newton. The 150,000-square-foot facility should be completed next year. The company will create 200 jobs in the region, with an expected average annual salary of $33,400.

Battery Company Expands in Oklahoma

Horizon Batteries LLC plans to open a battery facility in Grove that will employ 200 workers. The site will be used to charge batteries. The facility will eventually have manufacturing operations and could produce 1,500 batteries per day.

IBS Snares Former Porsche Site

Transportation Company IBS Logistics is taking over the former Porsche Cars of North America distribution center at Charleston (S.C.) International Airport. The company is subleasing the property under a five-year deal with the German automaker. The move allows the Secaucus, N.J.-based company to consolidate its Charleston operations.

Tennessee Invests $53M in Health Science Center

Tennessee's Governor announced a $53 million investment for the University of Tennessee Health Science Center and the local biotechnology effort. More than $40 million is earmarked to build a new College of Pharmacy on the campus. The remaining $10 million will go to complete site preparation for the UT-Baptist Research Park.

Heavy Machinery Manufacturer Locates in Chattanooga

TAG Enterprises is developing 21 acres in the Enterprise South Industrial Park in Chattanooga. The company bought the land for $630,000 and will begin construction on its corporate headquarters later this year. TAG will add 150 employees to its staff of 25. The company manufactures attachments for heavy machinery.

Starbucks Opens Distribution Center in Tennessee

Starbucks Coffee Co. is investing $3.2 million to open a distribution center near Nashville in La Vergne. The 125,000-square-foot facility will provide gift-wrapping and shipping services for more than 700 Starbucks locations. The facility will employ 75 people.

BNSF Expands in Memphis

Forth Worth-based Burlington Northern Santa Fe Railway Co. is undergoing a major expansion in Memphis. The railroad will invest at least $40 million and create at least 150 jobs in the initial four-year phase of the development.

Medical Equipment Supplier Expands in Tennessee

London, U.K.-based Smiths Medical ASD, Inc. is leasing an 11,000-square-foot space in Airways Distribution Center to distribute its medical products. The DeSoto County facility will employ 31 people and will be the company's second-largest facility. The company is investing about $800,000 annually in the facility.

Nanotech Start-Up Chooses Austin

Nano Vance, Inc., a nanotechnology startup, has chosen Austin, Tex. for its corporate headquarters. The company currently has six employees, but the plan is to employ 60 people within the next 18 months. The office location is yet undetermined.

Healthcare Outsourcer Selects D-FW Region

Healthcare Management Solutions L.L.C. (HMS), an Irvine, Calif.-based healthcare outsourcing company, is expanding into the Dallas-Forth Worth area. The company signed an eight-year lease for 20,400 square feet at Highpoint Oaks near State Highway 121 in Lewisville. HMS will hire 250 people over the next six to 12 months. The company has 300 additional employees in four locations.

Aerospace Company Consolidates Dallas Operations

Vought Aircraft Industries Inc., a commercial and military aircraft parts manufacturer, is consolidating its Dallas operations. The company is planning to hire 3,000 workers at its Dallas headquarters. Vought plans to close its Nashville facility, dismissing 1,000 workers.

Wal-Mart Builds Distribution Center in Baytown, Tex.

Wal-Mart is building a two million square-foot distribution center - more than 50 acres under one roof - at the Cedar Crossings Business Park just outside Baytown, Chambers County. The facility is located near the Port of Houston and will be one of the largest import centers in the country. The center will employ up to 450 workers when it opens in the summer of 2005.

Citibank Builds Facility in Roanoke, Tex.

Citibank is building a $200 million electronic data processing center in Roanoke, Texas. The building will total 242,820 square feet. The company could add as many as 100 jobs and eventually generate $4 million or more in property tax revenue.

Cost Plus Doubles Size of Virginia Distribution Center

Cost Plus Inc., a home furnishing retailer, plans to expand its 500,000-square-foot distribution center in Isle of Wight, Va., doubling its current size. The expansion will add 190 jobs. The project includes the purchase of its leased facility and will cost $24 million.

Nanotech Company Expands in Danville, Va.

Luna Innovations is investing $6.4 million in a nanomanufacturing facility in Danville. The company will create 54 new jobs. Luna will use nanotechnology for new military and commercial applications.

Sprint Invests $20M in Kansas City

Sprint plans to invest 75 percent of its 2004 charitable contributions in the Kansas City area to improve downtown redevelopment, public transportation and public education. Sprint is committing more than $20 million in financial contributions, technology and in-kind contributions over the next three years. Part of that money will go to support initiatives to connect the University of Kansas, the University of Missouri-Kansas City, the Stowers Institute for Medical Research and its proposed second campus.

Austin Energy's GreenChoice Program Wins DOE Accolades

The U.S. Department of Energy has ranked Austin Energy's GreenChoice renewable energy program as the number one utility-sponsored "green power" program in the country for the second year in a row. Austin Energy sold more than 289 million kilowatt-hours of renewable energy last year.

Austin, San Antonio Study Water Plant

In what could be a boon for economic development along the I-35 corridor, the cities of Austin and San Antonio are among several groups studying the feasibility of a massive water treatment plant to serve the region. A plant would provide the two cities with water and wastewater pipes that would enhance the regional infrastructure for water supplies. Experts say it is critical to the development of the region as the two cities go the way of Dallas and Fort Worth.

Reliant to Peddle Power in Nation's Capital

The District of Columbia Public Service Commission has granted Houston-based Reliant Energy Solutions East LLC a license to provide electric service to commercial, industrial and institutional clients in Washington, D.C. Reliant Energy Solutions East serves commercial and industrial customers, currently totaling more than 500 megawatts of load, in New Jersey and Maryland. Reliant Energy Solutions, an affiliate of Reliant Energy Solutions East, serves approximately 33 percent of the industrial and large commercial load in Texas. Reliant Energy Solutions' headquarters for its East Coast operations is located in Edison, N.J.

SCANA Energy Buys Energy America Customers

SCANA Energy, an Atlanta-based subsidiary of SCANA Corporation, has acquired approximately 50,000 retail natural gas customers formerly served by Energy America in Georgia's deregulated natural gas market. Terms of the transaction were not disclosed. The company also announced that the Georgia Public Service Commission has voted to retain SCANA Energy as the state's sole regulated natural gas provider, extending the two-year term of SCANA Energy's Regulated Division for at least another year, through August 2005. SCANA Energy currently has in excess of 450,000 customers throughout Georgia, including more than 52,000 low-income and high credit risk customers served by the company's Regulated Division.

Bellsouth to Test Wi-Fi in Charlotte

BellSouth Corp. has selected Charlotte, N.C., as the site of its first major deployment of public wireless fidelity (Wi-Fi) networking in the region. Wi-Fi provides high-speed Internet connectivity to a laptop computer or PDA. BellSouth Internet customers will soon have free access to high-speed wireless data at public locations concentrated in the Center City of Charlotte and the surrounding suburbs. Atlanta-based BellSouth wants to test business and consumer demand for public Wi-Fi, large-scale deployment of a public Wi-Fi service and technical support of a Wi-Fi network. BellSouth will deploy approximately 100 "hotspots" throughout Charlotte, mostly in the central business district.

GE Energy Expands in Greenville, S.C.

General Electric Energy, one of GE's 11 major business units, is investing an additional $120 million in its facility in Greenville. Driven by the creation of a new technology team and the addition of a new business operation, the expansion will create 350 new jobs. Greenville has been selected as headquarters of the new Global Gas Turbine Technology team. As an engineering "Center of Excellence," the team will provide design-engineering support for developing new growth platforms in power generation and services. To support this activity, the team will add 100 engineers this year. GE Transportation, another of GE's major business units, will also bring jobs to Greenville. Its Aircraft Engines division announced that it would begin a new manufacturing operation within the Greenville Gas Turbines facility where it will produce turbine airfoil blades for the aircraft industry.

TXU Closes Eight Power Plants

TXU Corp. is closing eight power plants permanently and will shut four others temporarily because of electric industry market conditions in Texas. About 55 workers will be affected, but may be able to transfer to other locations. The 12 power plants represent 1,471 megawatts, or more than 13 percent of TXU Energy's gas-fired generation capacity in the state. Rivercrest Steam Electric Station in Red River County; North Main Steam Electric Station in Tarrant County; three plants at Parkdale Steam Electric Station in Dallas County; and three plants at Morgan Creek Steam Electric Station in Mitchell County are closing in the cost-saving move.

QUIZ ANSWER

The correct answers are: South (a) $412 billion; Midwest (b) $193 billion; East (c) $201 billion; West (d) $266 billion. The $412 billion invested in the South represents nearly 40 percent of the total investments made in the U.S. by foreign-owned corporations.


March

QUIZ

U.S. biotech companies will spend (a) $2.2 billion (b) $790 million (c) $8.1 billion or (d) $44.8 billion on research and development in 2004. BONUS QUESTION: The U.S.-based pharmaceutical industry will spend (a) $222 billion (b) $1.8 billion (c) $603 billion or (d) $59.6 billion on R&D this year.

(Scroll down for answer)

Is Toyota About to Announce Marion, Ark. Plant?

SouthernAutoCorridor.com has received information from reliable sources that indicates Japanese automaker Toyota is close to making a decision on adding another assembly plant in the American South. If announced, the new plant will be built in Marion, Ark. in the Memphis MSA and will assemble light trucks, SUVs and minivans. Arkansas Gov. Mike Huckabee and staff members from the Arkansas Dept. of Economic Development met with Toyota Motor Corp. officials in Japan on March 18. Toyota is currently building a light truck assembly plant in San Antonio.

In the last year several Toyota-affiliated suppliers have set up shop in northeast Arkansas near Memphis. Also in 2003, a wholly-owned subsidiary of Toyota, Bodine Aluminum, began construction of a new engine plant in Jackson, Tenn.

In January of 2003 (you can see it for yourself on www.SouthernAutoCorridor.com by clicking OEM news and scrolling to January 2003) Southern Business & Development magazine, the owners of SouthernAutoCorridor.com made this prediction: "So where will Toyota land? They will end up in San Antonio ... and Marion, Ark. That's right, two plants. They will not, however, be announced at the same time. San Antonio will be announced first by the summer of this year (2003) and Marion will be announced in late 2003 or sometime in 2004."

Georgia Site Toyo Tire's Favorite

Osaka, Japan-based Toyo Tire & Rubber Co. Ltd. will build a plant in the Southern Automotive Corridor and it looks like a 150-acre site in Bartow County, Ga. is where it will be built. Company officials have not publicly disclosed the location of the $150 million project that is expected to create up to 400 jobs. However, officials with Toyo have said the Bartow County site is the preferred location of the deal.

Starbucks Locates Distribution Center Near Nashville

Starbuck Coffee Co. is locating a 125,000-square-foot distribution center in LaVergne, Tenn. creating 75 jobs. The new center will provide gift wrapping and shipping services to 700 Starbucks locations from Wisconsin to Florida and represents a $3.2 million investment.

Inbound Call Center to Employ 1,300 in Shreveport

Officials with U.S. Support Company announced intentions to locate a new inbound customer service facility in Shreveport, La. on March 5. Company officials announced that up to 1,300 jobs will be created by the second year in business. The company is investing $3 million in facility and equipment purchases.

Tennessee Governor Wants to Change Workers' Comp System

Tennessee Gov. Phil Bredesen wants to change the current court-based system that is used for judging workers' compensation cases. Bredesen has proposed forming commissions to settle claims as opposed to using the courts. Bredesen maintains the court-based cases are a burden for employers in the state. In the South, only Alabama and Tennessee use the courts to settle workers' compensation cases.

Palm Beach Bond Rating May Have Played a Large Part in Scripps Location Decision

The biggest biotech deal and potentially one of the biggest deals in the South's history may indeed come in the form of the Scripps Research Institute's decision to choose a large piece of farmland in western Palm Beach County, Fla. for its newest lab and office facility. It has been estimated the California-based biotech concern will spinoff as many as 50,000 new jobs in South and Central Florida in addition to the 6,000 it will employ directly. Scripps officials looked closely at a location in the Orlando metro for the project, but eventually chose Palm Beach County. Palm Beach, located just north of Fort Lauderdale and Miami, just happens to currently sport a AAA bond rating by Standard & Poor's and Fitch. That ranking is the highest given out by the two well known financial analysts that examine closely the ability of governments to pay off bonds. Moody's Investors Service rates Palm Beach County's bonds Aaa, which is its highest rating as well. Palm Beach County is but one of 37 counties nationwide that have earned AAA bond status and it's the only one in Florida, apparently the only state targeted seriously by Scripps for an East Coast operation. As a result of the more than $200 million in incentives offered to Scripps by Palm Beach (in addition to more than $300 million from the state of Florida, much of that backed by federal funds), the county must float a bond of equal value. A $200 million bond for a single project is huge by any county standard. But it's the ability of Palm Beach County to float such a bond that may have played a large part in Scripps' decision to locate there.

General Motors Adding 200 Workers in Missouri

GM is adding 200 workers at its Fairfax, Mo. plant where it builds Malibus. Increased demand for the Malibu model is the reason the workers are being added. Most of the new hires will come from other GM plants in Michigan and Kansas.

Honda Sees Production in Alabama Soar

Honda's Talladega County, Ala. assembly plant produced 167,884 Odyssey minivans in 2003. The total was a 55 percent increase over the number of vans assembled at the plant in 2002 and 18,000 more than the company estimated would be made. A second production line at the Lincoln, Ala. plant will begin assembling Honda Pilots in April.

Diamond Electric Expands in W.V.

Diamond Electric Manufacturing Corp. announced in late February a $21 million expansion of its ignition coil plant in Eleanor, W.V. The project will provide as many as 40 new jobs at the Putnam County, W.V. facility. Diamond Electric officials said the expansion will accommodate new business from DaimlerChrysler, Ford Motor Co., and the new Global Engine Alliance Co., which has been formed by DaimlerChrysler, Mitsubishi Motors and Hyundai Motors. The company has also been a Toyota supplier since it opened its plant in West Virginia in 1998. Diamond Electric is a Japanese-owned company that first established operations in Dundee, Mich. in 1992.

Siemens VDO Automotive Announces Diesel Systems Group

Siemens VDO Automotive announced in mid-February plans to establish a North American diesel systems headquarters with the creation of its Powertrain Diesel Systems North America division, to be located in Columbia, S.C. The new Powertrain Diesel Systems headquarters represents a $25 million capital investment. The facility will employ 120 people. The new HQ will become a national center for research and development, engineering, and testing of diesel fuel technology, including digital valve and piezo electronic fuel injectors, diesel pumps and fuel rails.

Logistics Center Announced at Mercedes Plant

A new joint venture between Cookeville, Tenn.-based Averitt Express and Atlanta-based i3 Group has been created to operate a new 400,000-square-foot supply chain warehouse that is being built next to the Mercedes-Benz assembly plant in Vance, Ala. Averitt, a trucking and supply chain company, has handled automotive parts shipping to the Mercedes plant since the facility started production in 1997. i3 Group is a minority-owned supply chain company. Mercedes-Benz is building the logistics center that will sequence parts for the assembly plant, which will begin operating a second production line in 2005. The logistics center is expected to house more than 200 employees and will be completed in January of 2005.

Unipres USA Expands in Tennessee

Unipres USA, a subsidiary of Japanese auto parts manufacturer Unipres, is expanding its facilities in Portland, Tenn. The company has purchased a 108,000-square-foot warehouse where it will store parts. Unipres' factory in Portland houses over 600 workers who manufacture parts for Nissan, Ford, Isuzu and Subaru. The supplier is one of the largest in Middle Tennessee. The company also has a facility in Forest, Miss.

Japanese Supplier Locates in Tennessee

Aisin Automotive Casting Tennessee, Inc., a subsidiary of Japanese auto parts manufacturer Aisin Seiki Co. Ltd., is locating a 280,000-square-foot plant in the Clinton/Interstate 75 Industrial Park located in Clinton, Tenn. The company, which is one of the Toyota groups, will create 400 jobs in the Knoxville area by 2007. Aisin will invest approximately $67 million in the Clinton community, where it will operate a full process die-casting facility that includes casting, machining and assembly to produce engine components. The components include water pumps, oil pumps and pistons that will be installed in the Toyota Tacoma, Toyota Tundra and Toyota Camry. Aisin officials said an extensive site search was conducted in three different Southern states before the company picked Clinton.

Hyundai Supplier Expands

Mobis Alabama, a Tier one auto parts supplier that is building a plant in Montgomery, Ala. to supply Hyundai's new facility there, is expanding. The company originally planned to employ 430 workers, but has now announced that total employment will increase to over 700 when production begins. Mobis is taking over some of Venture Industries' work after that company's parts plant deal, which was to be built in Prattville, Ala., fell through last year.

Hyundai's Tier One Supplier Total Impressive

Hyundai's Alabama plant won't open until next year, but its Tier one base of suppliers have invested in the state in impressive fashion. As of February 6, 2003, Tier one Hyundai suppliers have accounted for almost half-a-billion dollars in capital investments in the state. Announced employment by those 20-plus suppliers exceeds 4,000 jobs.

Tier Two Supplier Picks Rural Union Springs, Ala.

Hinge Tech announced in February it will move into an existing 41,000-square-foot facility in rural Bullock County, Ala. The Tier two supplier will make materials and handling equipment, such as conveyor belts and small cranes available to Hyundai's Tier one suppliers. The company is expected to hire 60 workers.

Duke University and GM Partner on Fuel Cells

Duke University's Fuqua School of Business, the Pratt School of Engineering and the Terry Sanford Institute of Public Policy are conducting research and creating classes aimed at helping develop hydrogen fuel-cell vehicles for GM by 2010. General Motors made its first donation of $500,000 for the project in the winter quarter. In a related story, in mid-February, GM started up the first of 400 fuel cells in a test at a Dow Chemical plant in Texas. GM plans to sell low-pollution fuel cell vehicles in the U.S. market within six years.

Honda Sees Production in Alabama Soar

Honda's Talladega County, Ala. assembly plant produced 167,884 Odyssey minivans in 2003. The total was a 55 percent increase over the number of vans assembled at the plant in 2002 and 18,000 more than the company estimated would be made. A second production line at the Lincoln, Ala. plant will begin assembling Honda Pilots in April.

North Carolina Pitches Boston Biotech Companies

The privately funded North Carolina Biosciences Organization launched an advertising campaign in the winter in the Boston Globe in an effort to lure biotech concerns and skilled labor to the Tar Heel State. The advertisement invited CEOs of biotech companies in Massachusetts to expand or relocate to North Carolina. Officials with NCBio said that about 18,000 workers are employed in biotech fields in North Carolina and that skilled labor is in short supply, considering companies steal workers from one another all the time. North Carolina recently passed a bill that will fund a $64 million worker training initiative that centers exclusively on biotech manufacturing. NCBio is an organization funded by memberships. Members include GlaxoSmithKline, Biogen, Bayer and Trimeris among others.

Maryland Governor Plans Chespeake Cleanup

Maryland Gov. Robert L. Ehrlich has introduced legislation that would create the Chesapeake Bay Restoration Fund. The program would give the state about $1 billion to improve water treatment plants in the state that dump more than 16 million pounds of nitrogen into the bay each year. Gov. Ehrlich said the plan would cut nitrogen pollution in half. The initiative would be funded by a $2.50 monthly surcharge on residential sewer bills in the state and a $2.50 per month increase for every 250 gallons of water discharged by industry.

Featherlite Reopens Oklahoma Facility

Featherlite, a manufacturer of specialty trailers and luxury motorcoaches, has reopened its facility at MidAmerica Industrial Park, located in Pryor Creek, Okla. The 121,500-square-foot plant had been sitting idle since Featherlite closed it two years ago as a result of the nation's economic downturn. The plant, which at one time employed over 250 workers in the fabrication of motorcoaches, will be used to serve other areas of the recreational vehicle market.

Rolls Royce Naval Marine Expands in Mississippi

Rolls-Royce Naval Marine broke ground in January for the expansion of its foundry in Pascagoula, Miss. The new facility will enhance manufacturing capabilities and improve production across a range of Marine propellers and submarine propulsors. The expansion will enable the company to manufacture marine propellers as large as 80,000 pounds and 26 feet in diameter. Propellers of that size are used by U.S. Navy nuclear aircraft carriers.

Manufacturer Chooses Winston-Salem

A Wisconsin-based manufacturer of detergents is moving into an 84,000-square-foot facility in Winston-Salem, N.C. Jennico2 performed a mid-Atlantic site search for an expansion and chose the Piedmont Triad market over several other locations on the East Coast. The company is expected to employ 40 workers.

Texas Adds Wind Farms

The state of Texas was one of the top states in the U.S. in the development of wind generated energy last year. In 2003, the Lone Star State added 204 megawatts of wind power, fourth-best in the U.S.

Editorial

Magazine Ranks Incentives as No. 1 Site Selection Factor

Area Development magazine published a study in the winter quarter indicating that incentives have become the most important factor for companies looking to expand, startup or relocate. It's the first time incentives have claimed the top spot in the 18-year history of the study.

In the last decade several issues in the site selection game have held the No. 1 position, including location, logistics, taxes, labor availability, labor quality, operating costs, labor unions and availability of product, such as buildings and serviced industrial parks. But in the economic times we've seen over the last three years, it's easy to understand that companies creating jobs and making significant investments are going to be more interested than normal in handouts such as tax breaks, free land or buildings, infrastructure improvements or cold, hard cash (recruiters frown on the cash aspect, but it exists, especially with larger projects).

Furthermore, communities and states recruiting industry have seen their existing industrial base shrink over the last three to five years, some to the extreme. When a company does come around with the promise of jobs and investment in a time when job losses have been paramount, incentives certainly play a big part on the recruiter's side as well. In other words, they are going to do everything they can to land the project.

We agree with Area Development's survey that incentives have become the No. 1 factor for companies like yours looking to expand or relocate. However, we believe that in this economic environment, operating costs are right up there at the top with incentives. After all, low-wage industries have not left the U.S. in droves over the last fews years for incentives being offered by Mexico, India and China. No, they have left the U.S. to take those less skilled jobs to places where operating costs are much lower than those found anywhere in the U.S., even the South.

Additionally, in the last year the South has benefited from more major headquarter relocations to the region from the Northeast, West and Midwest by a large margin compared to any year in the last 25 years. Incentives and operating costs were at the forefront of those decisions, we suspect.

If you are considering expanding or moving your business to the South, we can say with great confidence that you will find no greater or more valuable incentives anywhere in the U.S. than what can be garned in selected locations in the American South. As for incentives and operating costs combined, we'll use the example of Philip Morris, a company formerly based in New York, N.Y., that is currently moving its headquarters to Richmond, Va. Philip Morris officials estimated it will cost them about $120 million to move from Manhattan to Richmond. They are receiving about $40 million in incentives from local and state agencies in Virginia. And the move will save the company about $60 million a year. You do the math.

Lee Burlett (lee@sb-d.com)

Atlanta Named No. 1 Market for Entrepreneurs

In February, Inc. Magazine named Atlanta the best large market for entrepreneurs. The survey is a first for the magazine. Atlanta was followed by Riverside-San Bernadino, Calif., Las Vegas, San Antonio and West Palm Beach. Three other Southern markets landed in the top 10, Fort Lauderdale, Jacksonville and the Washington, D.C. region. Some of the worst markets for entrepreneurs, according to Inc., are San Jose (the Silicon Valley? Oh, how the mighty have fallen), Grand Rapids, Mich., Dayton, Ohio, Rochester, N.Y., New York City, San Francisco, Portland, Boston and Philadelphia. Inc.'s survey named Florida as the top state for entrepreneurs.

Magazine Cites Southern States' Attraction to Industry

It was almost a clean sweep for Southern states in this year's Plants, Sites & Parks' top 10 locations for business. The No. 1 state for relocating and expanding industry according to PS&P this year is Virginia, followed by South Carolina, Alabama, North Carolina and Texas, all Southern states. Rounding out the top 10 are Kentucky, Georgia, Mississippi, Indiana and Pennsylvania. Indiana and Pennsylvania? Come on, PS&P, couldn't you have slipped in Tennessee (11th), Oklahoma, Louisiana, Arkansas or Florida in that ninth and tenth spot?

CSX Promoting Development of Industrial Parks Near its Rail Lines

Jacksonville, Fla.-based CSXT, parent company of CSX Transportation, has launched a program designed to encourage communities in the South to develop new industrial parks near its rail lines. Called The Parks for Growth program, CSX recently assisted officials in Southampton County, Va. in the development of a 400-acre piece of land located adjacent to one of its rail lines into a new industrial park. As an incentive, CSX will build a new switch off its main lines to new tenants of any new industrial parks developed under the program.

Boeing CEO Maintains Wichita Facility "Has a Great Future"

Harry Stonecipher, Boeing's CEO, said in the winter the company's Wichita, Kan. plant will remain a major manufacturing component for the company. Wichita lost out on the assembly of the new Boeing 7E7, which went to Washington State after a long and ridiculously high public site search. Wichita did win some significant work on the 7E7. Boeing Wichita will produce much of the 7E7's structural components, including the wings. Stonecipher said the Wichita plant will continue to produce parts for the 777, 737, 767 and 747.

QUIZ ANSWER

According to R&D Magazine, U.S.-based biotechnology companies will spend (c) $8.1 billion on research and development this year. The answer to the BONUS QUESTION is (d). R&D predicts the pharmaceutical industry will spend $59.6 billion in research and development in 2004.


February

QUOTE

"In fact, the auto industry has become such a big catch for the South that economic developers chase after cars like country dogs."

Beth Gorczyca, The State Journal, Charleston, W.V., November 6, 2003

QUIZ

Mexico has benefited from NAFTA, which took effect 10 years ago on Jan. 1, 1994, by (a) 22 million new jobs; (b) 12 million new jobs; (c) four million new jobs or (d) 300,000 new jobs created in the last 10 years by U.S.-based manufacturers that moved operations south of the border.

(scroll down for answer)

Looking for Low Union Membership States? Try the Carolinas

North and South Carolina continued to sport the nation's lowest union membership rates in 2003. South Carolina's union membership rate is 4.2 percent of all employed persons and North Carolina's rate is the lowest in the nation at 3.1 percent. New York and Michigan had two of the highest union membership rates, both topping 20 percent. The automotive industry was the No. 1 union sector with a membership of over 25 percent. Interestingly, no foreign automakers building cars and trucks in the U.S. are unionized. Most of those plants are located in the Southern Automotive Corridor (www.SouthernAutoCorridor.com).

Hyundai's Alabama Facility Three-Quarters Finished

The $1 billion assembly plant being built by Korean automaker Hyundai is 75 percent finished. Hyundai spokesman Bill Lang was quoted in an article published in the Birmingham News on January 30, that the company will meet its deadline to begin mass production of Sonata sedans in March of 2005. The plant will house about 1,000 employees when it begins production and over 2,000 when full production is reached in 2007. In addition to a next generation Sonata, Hyundai will produce a new version of the Santa Fe SUV at the facility. The plant represents the first in the U.S. for South Korea's largest automaker.

Vanguard Car Rental to Bring 700 Jobs to Tulsa

A Florida rental car company could announce as early as Thursday, February 5, that it is moving to Tulsa, bringing 700 jobs with it. Vanguard Car Rental, whose chief executive is Tulsan William Lobeck, is negotiating to move into existing office space in the Tulsa area. Lobeck said in early January that he was considering moving the company's headquarters to Oklahoma, but that the state's "onerous" capital gains tax on individuals might keep his firm in Florida. During the last week of January, Oklahoma Gov. Brad Henry proposed the elimination of all capital gains taxes on Oklahoma-based property. It is not immediately clear if that announcement prompted Vanguard's reported decision to move its headquarters to Tulsa. Vanguard is the parent company of Alamo Rent A Car and National Car Rental and has substantial operations in Boca Raton, Fla. The company is privately held and employs 14,000 people worldwide.

Big Announcement by Auto Supplier in Kentucky

A subsidiary of Magna International, a worldwide supplier of automotive components and systems, will hire as many as 800 workers in Bowling Green, Ky. The subsidiary, Cosma International, made an announcement in December of 2003 that it will build a 900,000-square-foot parts plant in Bowling Green's TriModal Transpark. At the time, no job figures were announced. The 800-job figure and 900,000-square-foot facility represent one of the largest supplier announcements in years in the Southern Auto Corridor.

Ford Scaling Back in St. Louis

Missouri Gov. Bob Holden recently declared the automotive industry one of the state's primary recruiting targets. The official order coming from the Governor proclaiming automotive No. 1 for Missouri took a hit just a week after it was released. Ford Motor Co. announced in late January it would eliminate the second shift and cut about 1,000 jobs at its Hazelwood, Mo. assembly plant. Ford also plans to lay off 200 workers at its Claycomo, Mo. assembly plant near Kansas City. Rumors surfaced in 2002 that Ford would close the St. Louis plant, which makes Ford, Lincoln and Mercury SUVs. While Ford officials have maintained the plant will not close any time soon, it's apparent the next worst thing is about to occur.

First Infiniti SUV Made in Mississippi

Nissan Motor Co. announced "job one" for the new Infiniti QX56, a full-size sports utility vehicle. The first QX56 rolled off the line at Nissan's new plant in Canton, Miss. in late January. The QX56 is the fourth model of five that will eventually be built at the Canton facility. To date, the plant has rolled out the Nissan Quest minivan, Pathfinder Armada SUV and Titan pickup in addition to the Infiniti QX56. The Nissan Altima will be produced at the plant later this year.

Dana Adding 300 Jobs in Kentucky

Dana Corp. is expanding in Elizabethtown, Ky. The auto parts maker is adding 300 jobs to its truck frame plant that serves the Ford assembly facility in Louisville.

AirTran Opening Call Center in West Georgia

Orlando-based AirTran Airways, the growing discount airline, announced in late January it is opening a 200-employee call center in Carrollton, Ga. Officials with AirTran cited the State University of West Georgia, which is located in Carrollton, as a major source of potential employees at the center.

Rayovac Latest Company to Relocate HQ to the South

Madison, Wis.-based Rayovac Corp., a maker of batteries and the Remington electric razor, announced in mid-January it is moving its headquarters to the Atlanta metro community of Sandy Springs. Founded in 1906, Rayovac is the third-largest maker of household batteries in the U.S. and is No. 2 in Europe. Rayovac follows Newell Rubbermaid, which announced it would move its headquarters from Illinois to Atlanta last year.

Textron Announces Big Deal in Mississippi Delta

Textron Fastening Systems, a $1.65 billion business unit of Textron Inc., announced on Jan. 19 that it is locating an automotive parts plant in a 308,000-square-foot vacant building in Greenville, Miss. The deal will bring over 500 jobs to the Mississippi Delta region. The operation will manufacture a broad range of custom-designed specialty threaded fasteners and other precisely engineered fastening and assembly products for its automotive and industrial customers. The project represents a capital investment of $35 million. Textron will supply tier one automotive suppliers in Mississippi and in other parts of the Southern Automotive Corridor. Textron is headquartered in Troy, Mich.

Auto Logistics Concern Moves Processing to Brunswick Port

GLOVIS America, Inc., which processes cars and trucks imported into the U.S. and exported out for Korean automakers' Kia Motors and Hyundai Motor America, is consolidating its port operations from Jacksonville to Brunswick, Ga. The move is expected to create about 400 new jobs in the port city of Brunswick. Many of those jobs will be filled by employees who will relocate from Jacksonville. Brunswick is the fourth-largest handler of automobiles and trucks on the Eastern Seaboard, with Audi, Volkswagen and Land Rover moving their products through the port.

Missouri Governor Touts Automotive

An executive order was signed by Missouri Gov. Bob Holden in late January creating the Missouri Automotive Partnership. The partnership will help recruit automotive-related businesses to the state, as well as conduct research, propose legislation and lobby policymakers to improve the overall economic climate for the automotive industry in Missouri. Missouri is home to domestic automakers' GM, Ford and Chrysler.

Supplier Expanding in NC's Triad

Metzeler Automotive, a manufacturer of window and door seals for the automotive industry, is spending about $8 million to improve its existing facilities in Reidsville, N.C. Reidsville is part of the Greensboro/Winston-Salem/High Point market known as the Piedmont Triad region. The company is adding about 75 jobs. The German company, which opened in Reidsville in 1994, supplies parts to Ford, Chrysler and BMW's facility in Greer, S.C.

Grubb & Ellis Names Atlanta Hottest Office Market

Commercial real estate giant Grubb & Ellis recently predicted in a study that Atlanta will have the strongest demand for office space over the next five years. The forecast is based on potential job creation in the Southeastern market. Currently, Atlanta's vacancy rate for all office classes is slightly above 20 percent, nearly three percent higher than the national average.

Editorial

Automakers in the South Save in Labor Costs

As we reported to you in December, Hyundai will pay its new production workers $14 an hour when its plant opens next year near Montgomery, Ala. But it wasn't until mid-January before Automotive News reported the $14 an hour rate Hyundai will pay. Automotive News noted that only Nissan's Canton, Miss. plant has a lower starting wage, which they reported to be $13.25 an hour (it is really $15 an hour). Representatives of both automakers have said publicly that the wage increases to about $21 an hour after two years.

Other plants in the South pay slightly higher wages for new production workers. BMW and Mercedes pay about $16 an hour to start at their plants in South Carolina and Alabama and new workers at Honda's plant in Lincoln, Ala. receive about $15 an hour.

Since BMW announced in South Carolina in 1992, Southern Business & Development has consistently maintained that cost factors are behind the growth of the Southern Automotive Corridor. Foreign automakers know better than to set up shop in traditional domestic automotive states such as those that make up Midwestern Automotive Corridor. There, United Auto Workers earn $26 an hour on average when they start.

So, say there's a difference of $10 an hour that foreign automakers pay for labor in the Southern Auto Corridor compared to what domestic automakers pay in "Detroit." The following tabulates the savings automakers in the South enjoy in different time frames based on a 3,000-employee assembly plant that operates 100 hours a week:

* Savings per hour: $30,000
* Savings per day: $420,000
* Savings per week: $2,940,000
* Savings per month: $12,348,000
* Savings per year: $153 million
* Savings after five years: $765 million

The above figures are conservative at best. For example, there are 168 hours in a week and assembly plants are manned 24/7. That being the case, a nice round figure of $1 billion saved over five years by foreign automakers on labor costs alone in the Southern Automotive Corridor must be a frightening realization to domestic competitors up north.

Lee Burlett (lee@sb-d.com)

Brach's Moving HQ to Dallas from Illinois

Following Newell Rubbermaid's relocation of its headquarters from Illinois to Atlanta in 2003, candy maker Brach's Confections announced it is moving its HQ to Dallas from the Chicago metro market of Woodridge, Ill. The company has about 1,600 employees with sales of $350 million in fiscal 2003.

ACS Expands in Kentucky

Affiliated Computer Services is adding 500 jobs to its Lexington, Ky. call center operations. The company, which handles millions of calls each year, currently employs nearly 2,000 people at several facilities in Kentucky, including four centers in Lexington.

Trucking Company Hiring 400 in Atlanta

One of the country's largest trucking companies is bringing 400 new jobs to the Atlanta area. Schneider National of Green Bay, Wis., is opening an operations center in DeKalb County, Ga. in anticipation of an expansion in 2004 and 2005 in truckloads in the Southeast. Most of the jobs will come from new truck drivers the company expects to hire.

Kia Official Says U.S. Plant Decision May Come in Two Years

Korean automaker Kia may build its first plant in the U.S. within two years. Peter Butterfield, CEO of Kia's U.S. division, said as much at the Automotive News World Congress that was held in Dearborn, Mich. in early January. Kia sold 237,000 vehicles in the U.S. in 2003 and from Butterfield's comments in various media outlets following the World Congress, it looks as if the automaker would like to cut the noose -- at least publicly -- that ties it to Hyundai, its parent company. Hyundai will open its first U.S. plant in Montgomery, Ala. in 2005 and the site it is building on is large enough for Kia to place a plant there. Yet, Butterfield said if a plant is built in the U.S. it will not be built next to Hyundai's factory in Montgomery. We reported U.S. Sen. (Miss.) Trent Lott's comments made last year, that he believes Kia is the next automaker to announce a factory in the Southern Automotive Corridor and that Mississippi will do everything it can to land it. Our response to Lott's comments were that Kia will not make a decision on a U.S. plant until a year or two after Hyundai's plant is up and running. We also predicted that Kia would look very hard at a site near Meridian, Miss., near the Alabama and Mississippi border on I-20/59.

Editorial

Here's a Prediction: Kia Will Announce its First U.S. Plant in 2006 and We Know Where it Will be Built

Alright, we know predictions aren't exactly journalism in the professional sense. Yet, from what we hear, you sure do love to read our predictions, especially those involving prospective deals in the Southern Automotive Corridor (www.SouthernAutoCorridor.com). So let us try to entertain you with another.

Korean automaker Kia will build a plant in the Southern Auto Corridor (SAC) and it will be announced in the spring of 2006. How do we know that? Well, we really don't. But, not unlike our dead-on predictions over the last dozen years in the SAC involving BMW, Mercedes-Benz, Nissan, Hyundai (that one was so easy), Toyota and Honda, (We admit we missed that one. We picked Honda to land in Opelika, Ala. and they chose Lincoln, Ala.), the information we are receiving points to a Kia plant being built in the U.S. soon. In fact, here are 10 indicators that we have found that convince us that Kia will announce in 2006 and where the plant will be built.

Indicator No. 1: Kia's U.S. sales are climbing and fast.

Indicator No. 2: In January, Kia's U.S. division CEO Peter Butterfield said at the Automotive News World Congress in Dearborn, Mich., that the automaker "might build" its first U.S. plant within two years.

Indicator No. 3: Kia is searching for some autonomy from its parent Hyundai. That being the case, when it does announce it will build its first U.S. plant, don't expect it to be built next to the Hyundai facility currently under construction just south of Montgomery, Ala., even though that Korean automaker just happened to purchase enough land to accommodate a second plant.

Indicator No. 4: Kia is not Hyundai and Hyundai is not Honda, Nissan or Toyota. So, will the growing pup build far from its young mother when both are weak dogs in the yard? No way. If Kia builds in the SAC (Southern Auto Corridor), it won't be next to Hyundai's Montgomery plant, but it won't be far from it either.

Indicator No. 5: U.S. Sen. Trent Lott (Miss.) said with much bravado in the summer of 2003 that Kia is the next foreign automaker to land in the SAC and Mississippi will do what it takes to land it. In fact, Lott claimed Mississippi would land it, end of story. Lott's lost some political power in the last few years, but not enough to keep him from turning a big automotive deal for Mississippi before he hangs up his hat. Rumor has it Lott is hell-bent on the deal.

Indicator No. 6: In 2003, Alabama and Mississippi did something that has never been done before in economic development history. They joined hands in an effort to develop and make more prosperous their border regions, which, for the most part, are rural. No two states have joined together in any kind of economic development effort of that magnitude.

Indicator No. 7: Over 75 percent of automotive deals landing in the Southern Automotive Corridor in the last three years have chosen rural areas.

Indicator No. 8: There is a sense of urgency among federal and state DOT officials to improve U.S. Highway 80 from Montgomery, where the Hyundai plant is, through Selma, Ala. on to Meridian, Miss., which is located on Interstate 20/59 on the border of Alabama.

Indicator No. 9: There happens to be an excellent, flat-as-a-board greenfield site near Meridian and even one on the other side of the border in Alabama that can easily accommodate an auto assembly plant.

Indicator No. 10: History has shown that the last five assembly plants built in the South were built within two miles of an Interstate.

So, what do our indicators tell you about where Kia will build its first North American assembly plant? Circle Meridian, Miss. on the map. Kia will build its first U.S. assembly plant in Mississippi (the new governor better write the check) near Meridian. But Lott was wrong. Kia is not the "next" foreign automaker to announce a plant in the Southern Auto Corridor. That will be a Japanese automaker in late 2005.

Lee Burlett (lee@sb-d.com)

Hyundai Expects More Suppliers in Alabama

The years' 2002 and 2003 saw 15 tier one auto suppliers pick sites in Alabama. Most of those were in rural counties and towns in the state. After a lull in supplier announcements in the fall quarter of 2003, Hyundai officials maintained the rush to 'Bama isn't over. The Korean automaker expects eight more primary parts suppliers to pick Alabama for facilities. The expected total of 23 tier ones will employ 4,000 in Alabama and will essentially be located from the state's most northern counties to its most southern counties.

Nissan's Ghosn Pondering New Plant

Nissan CEO Carlos Ghosn said at the North American International Auto Show in January that he is already thinking about whether to expand existing plants in the U.S. and Mexico or build another assembly facility. Nissan's newest facility, located in Canton, Miss., has not reached full production as of yet and the Japanese automaker's massive facility in Smyrna, Tenn. has expanded numerous times.

Production Increased for Japanese Automakers in 2003

Four of Japan's five largest automakers increased vehicle production in 2003. The only major Japanese automaker to drop production in 2003 from 2002 was Mitsubishi. Honda, Nissan, Mazda and Toyota, which recently overtook Ford as the No. 2 automaker in the world, all increased production last year. Much of Nissan's rise in production came from its new plant in Canton, Miss. that opened in 2003.

Mobile Expands Foreign Trade Zone

The U.S. Dept. of Commerce has approved almost 10,000 acres near the deepwater port in Mobile, Ala. to expand that markets foreign trade zone by more than 10 times its original size. The 1,000-acre Brookley Industrial Complex, a former Air Force base that is located near the port, made up the original trade zone.

Another Korean Supplier Lands in Rural Alabama

Yient Alabama Corp., a South Korean auto parts supplier, announced in early January it would build a $2 million, 25,000-square-foot plant in rural Tallassee, Ala. The tier two supplier will make racks, pallets, carts and automation equipment for tier one suppliers to the Hyundai facility being built in Hope Hull, Ala. The announcement is expected to create 80 new jobs.

Walgreens Building $175M Distribution Center in SC

Walgreen Co. announced on Jan. 7 that it plans to build a new 700,000-square-foot distribution center in Anderson County, S.C. The center will serve 250 stores in eight states in the South and Mid-Atlantic areas. The center is expected to house 450 employees. Walgreens is the nation's largest drugstore chain with 2003 sales topping $32 billion.

West Virginia Cabinet Maker Building Third Plant

American Woodmark, which already operates two large plants in West Virginia that produce kitchen cabinets, is adding a third facility in the state. The company has started construction on a 250,000-square-foot facility in Hardy County, W.V. The deal will create 300 jobs and result in an investment of about $30 million.

Omega Picks Clinton, Tenn.

Omega Cabinetry is taking over the old HomeCrest Cabinetry plant, located in the Knoxville MSA market of Clinton, Tenn. Omega is hiring 150 of HomeCrest's displaced workers and plans to hire an additional 450 workers over a five-year span. Omega has purchased the 200,000-square-foot facility and is expanding it by another 100,000 square feet. Both Omega and HomeCrest are divisions of MasterBrand Cabinets.

MasterBrand Buying Facility in Virginia

MasterBrand Cabinets has purchased the old 5B plant in Henry County, Va. and will turn it into a new cabinet factory. The deal is expected to create as many as 700 employees. MasterBrand has already invested nearly $3 million in the facility.

Editorial

Site Selection and Mac Conway Celebrate 50 Years

If the Top 10 Most Influential Southerners Was a Category in this Year's 10 Top Tens, Mac Conway Would be at the Top of the List

In January, Site Selection magazine, a competitor to Southern Business & Development, celebrated its 50th year in print. McKinley "Mac" Conway founded the publication, at the time titled Industrial Development, in 1954. In the 50th Anniversary Site Selection edition (January 2004), there is an excellent time line showing Site Selection's first 50 years as well as Conway's pioneering economic development adventures in the 1950s, 1960s and beyond.

Some of Conway's accomplishments and ideas outlined in the issue just blew me away. This Southerner conducted the first regional industrial science conference in Winston-Salem, N.C. in 1952. He also conducted the first industrial wastes conference in New Orleans in 1953 that was organized to establish environmental standards for industry, years before the federal government even thought about the issue.

Mac Conway, the former Georgia state Senator, NASA engineer, pilot and current environmentalist, logistics expert, publisher, political consultant, real estate planner, retiree and all-around, smart as hell dude, now lives in central Florida.

Mac, none of your other competitors may give you recognition as the facilitator of economic development, not only in the South and the U.S., but throughout the world, but we will. As we say around our office, "Old man Conway invented it. We're merely adding a few creative touches here and there."

Mike Randle (mike@sb-d.com)

Magazine Ranks Dallas No. 1

Plants, Sites & Parks magazine recently ranked Dallas the No. 1 market in the nation for corporate relocation. The publication surveyed readers by asking them which markets in the U.S. would they most likely expand to. Other markets that ranked high on the survey include Atlanta, Charlotte, Austin, St. Louis and Phoenix.

Nashville Lands Another Headquarters

On the heels of Asurion and Louisiana-Pacific's headquarter relocations to Nashville, another company has announced it is also moving to the Music City. Rockford, Ill.-based Clarcor Inc., a manufacturer of industrial filtration products, announced in January it would move its headquarters to Nashville. The company did not say how many people if any would relocate from Illinois to Tennessee. However, company officials did say they would employ about 75 at the new office facility in Nashville.

Port of Baltimore Sets Tonnage Record

Public terminals at the Port of Baltimore set new records in tonnage handled in 2003. Over seven million tons of cargo was handled at the port in the last calendar year, the highest total since the war times of WW II. Goods that increased tonnage at the port the most included roll on and roll off cargo such as cars, trucks and farm equipment. In fact, in 2003, Baltimore became the No. 2 handler of automobiles in the nation and remains No. 1 in forest products tonnage.

Cheap Textiles Continue to Flood U.S. from Overseas

Offshore textiles arrived in the U.S. in 2003 at an 85% increase over 2002, which was more bad news for domestic firms. Over 50,000 jobs were lost in 2003 in the U.S. textile manufacturing sector, with most of those jobs loses coming from the American South.

Jacksonville Weighs the Weight of Water

Following Tampa Bay's lead, officials with the St. Johns River Water Management District are conducting a study that includes actual sites for the location of a saltwater desalination plant. Jacksonville officials maintain water resources in North Florida remain high, however, 20 years from now, that may not be the case. A desalination plant recently began producing fresh water from saltwater in the Tampa Bay region.

QUIZ ANSWER

January of 2004 marked the 10th birthday of the passage of the North American Free Trade Agreement. Perceptions exist that Mexico, as a result of NAFTA, has robbed many states in the U.S. of millions of manufacturing jobs. Nothing could be further from the truth. Since the passage of NAFTA 10 years ago, manufacturing productivity per hour in the U.S. grew 60 percent faster than in the 10 years prior. Manufacturing wages grew almost 15 percent in the U.S. since NAFTA was passed in 1994. From 1984 to 1994, they grew by a 7.5 percent rate. Over 100,000 manufacturing jobs were created in the Rural American South in the mid-to-late 1990s, the region that has seen more plants close and move to Mexico than any place in the U.S. since the economic downturn started in 2001. But since 2001, more than 500,000 manufacturing jobs have been lost in the rural South. Did they all go to Mexico? Hardly. Since NAFTA was passed 10 years ago only (d) 300,000 jobs have been created by U.S.-based manufacturers in Mexico.

 

January

North Carolina May Adjust Incentives Again

Since 1996, when the William S. Lee Act was adopted in North Carolina, lawmakers in the Tar Heel State have tinkered with incentives for locating and expanding industry several times. There's nothing wrong with that. After all, economies change -- North Carolina's certainly has -- and as a result, state incentives for industry should as well. In the 1990s, North Carolina officials tried to steer investment and job making deals to its rural regions with a tier-based incentive plan. That's exactly what the William S. Lee Act was designed to do; give out more incentives to companies investing in poorer regions of the state and less to companies investing and hiring in NC's metro areas. At the beginning of this decade, the Act was adjusted with the addition of a "big deal" initiative that was designed to lure large, single investments such as automotive assembly plants. That adjustment included rebates of employees' state wage withholdings during the first few years of operation. North Carolina called that incentive the Job Development Investment Grant program. The program remains in place and is an excellent incentive for large projects. As the year 2004 began, there was talk in North Carolina that lawmakers and economic developers saw a need to adjust state incentives again. In the spring, when lawmakers convene, look for new incentives in North Carolina that will focus on urban economic development and especially on smaller projects of 50 to 100 jobs locating in rural and metros alike.

Houston Metro Running

The nation's fourth-largest city saw the inaugural running of its new light rail system on January 1. The $324 million system is a first for Houston, which has never had mass transit in the form of rail or subway in its history.

Editorial

2004 Prediction: No New Assembly Plants

The Southern Auto Corridor has been incredibly active over the last four years. Automakers' Toyota, Mercedes, BMW, Nissan, Honda, Hyundai, Ford and GM have invested billions (that's with a "b") on new and existing assembly factories in the region in the first four years of the new millennium. Rumor has it that Volvo, Audi, Mitsubishi, Suzuki and Kia will do the same soon. But as the New Year breaks the gate, we predict the automaker frenzy seen in the Southern Auto Corridor will slow to simply steady in calendar year 2004. Hear this: no new assembly plants will announce in 2004 in the Southern Automotive Corridor, but two or three or more will break ground in 2005 and 2006.

Yes, rest is needed in every business endeavor (the folks at Southern Business & Development (www.sb-d.com) need it, too, after launching this Web site in January). And rest automakers will do in 2004. But like all massive industries, resting and planning go hand-in-hand. Yep, automakers are planning new plants in the South as I write this. They will make their plans known to all in 2005.

What you will see in 2004 is a steady, but slower stream of suppliers opening up shop in the region, except of course in south Texas where a whole new supplier network will emerge to serve the Toyota truck plant in San Antonio. Suppliers will jostle for new contracts and become extremely picky in their site selection decisions. In other words, they will go where incentives are the best. Yet, again, you won't see an automaker whip out a billion dollar investment for a new plant this year in the SAC.

The western portion of the Southern Automotive Corridor is the next great active OEM region. But then again, so may be the east. The central region, or the spine, which, without question is Interstate 65, will be resting for not only 2004, but 2005 and beyond. Why? Alabama, Tennessee and Kentucky have established huge automotive clusters. While they will remain popular destinations for suppliers, it's unlikely a new assembly plant will locate in any of those three states anytime soon.

Mississippi, Arkansas, Texas, Louisiana, Oklahoma and even Kansas in the western SAC all have a chance to land an automaker in 2005 or 2006. And there are several states in the eastern portion of the corridor that have a chance at landing the big kahuna, as well. All of those states are hungry for automotive and will write the check for the right deals. And if an assembly plant does indeed announce in 2004, which is extremely unlikely, look at two areas: somewhere in the western region of the SAC or somewhere in the eastern region, or away from the "spine." But our prediction is "it ain't gonna happen" until 2005.

Mike Randle (mike@sb-d.com)

Study Shows Defense Industry a $44 Billion Business in Florida

A study done by the University of West Florida's Haas Center for Business Research and Economic Development shows that direct and indirect spending by the defense industry in Florida topped $44 billion in 2002. That figure represents almost 10 percent of the Sunshine State's gross state product. According to the study, of that $44 billion, $21.7 billion was spent directly by the Department of Defense.

Winston-Salem's New Marketing Plan Focuses on Quality of Life

Site selection factors run parallel with changes in the economy. Labor quality was a serious factor in the mid-1990s. Then in the late 1990s, mere labor availability (warm bodies will do) took center state when unemployment rates in many areas of the South fell below two percent. As the economy soured in 2001 and 2002, operating costs took its place as the No. 1 site selection factor (we maintain it has always been the No. 1 site selection factor and always will be, generally speaking, and everything else jockeys for No. 2). The economic development agency representing Winston-Salem, N.C., Winston-Salem Business, Inc., is betting that quality of life surges to the top of the site selection factor list in 2004 and 2005 as it rolls out its new marketing campaign. The campaign focuses on Winston-Salem's "livability." A report recently released by AngelouEconomics indicated that quality of life issues are gaining importance in corporate and industrial site selection factors.

Missouri Governor Signs "Buy in State" Order

Missouri Gov. Bob Holden signed an executive order this winter that requires state agencies to purchase goods and services from Missouri-based companies if price is equal or lower to that of vendors located outside the state. The order also gives Missouri companies rejected in the bid process to receive a letter explaining why they were rejected. Currently, the state purchases about 70 percent of its products and services from Missouri-based companies.

Let Us Shock You: Majority of Digital Cities Located in the American South

The annual survey conducted by the Center for Digital Government, a national research organization that studies information technology in government and education, recently released its 2003 results. The report breaks down its top digital cities (not MSAs) in three categories: large cities over 250,000, mid-sized cities (125,000-249,999) and small cities (75,000-125,000). The American South landed 21 cities in the top 10 of all three categories, or 21 cities of the top 46 cited (curiously there were numerous ties in the ranking). That means 45 percent of the top digital cities in the nation are located in the American South.

Top 10 Digital Cities: Major Markets

1. Tampa
2. Colorado Springs
Los Angeles
3. Virginia Beach
4. Tucson
5. Seattle
6. Chicago
Nashville
7. Kansas City
8. Corpus Christi
9. Jacksonville
10. Honolulu

Top 10 Digital Cities: Mid-Markets

1. Fort Wayne IN
2. Winston-Salem NC
3. Des Moines IA
4. Plano TX
Salt Lake City UT
5. Richmond VA
6. Lincoln NE
Norfolk VA
7. Torrence CA
8. Irving TX
9. Hampton VA
Bakersville CA
Mobile AL
10. Madison WI
Naperville IL

Top 10 Digital Cities: Small Markets

1. Roanoke VA
2. Coral Springs FL
Ogden UT
3. Denton TX
Fort Collins CO
4. Olathe KS
5. Bellevue WA
Carrollton TX
6. Boulder CO
Schaumburg IL
7. Independence MO
Pueblo CO
Tyler TX
Westminister CO
8. Macon GA
9. Arvado CO
10. Costa Mesa CA
Manchester NH
Roseville CA

* Bold indicates Southern cities


Family Dollar Building Distribution Center in Rural Florida

Family Dollar, a Fortune 500 company, has chosen rural Jackson County, Fla., for its latest distribution facility. The retailer plans to build a 907,000-square-foot big box and will invest over $50 million in the project. Family Dollar officials said about 500 workers will be housed at the facility.

Florida Governor Increases Rural Development Initiative

Florida Gov. Jeb Bush announced in late December a new initiative that will assist Florida's 33 rural counties in creating jobs and investment. Florida is increasing rural economic development program funding by 75 percent, including a $4 million addition to the state's Rural Infrastructure Fund.

Blastech Building Steel Plant in Mobile

Ontario-based Blastech Corp. is constructing a steel-plate blasting and painting line plant in Mobile, Ala. The steel processor is building the plant adjacent to IPSCO's Mobile steel mill.

North Carolina Considers Privatizing State Department of Commerce

North Carolina House and Senate members discussed privatizing the North Carolina Department of Commerce during the winter quarter. Plans are in the works to possibly set up a public/private state economic development agency when legislators meet in the spring. Tar Heel State leaders are pointing to the Virginia Economic Development Partnership as a model. That quasi-private group was started by former Virginia Gov. George Allen shortly after he took office in 1994. North Carolina is not unfamiliar with state-level economic development changes. In the mid-1990s, North Carolina set up the most comprehensive regional economic development initiative ever done in the South. The state has also made more changes to its incentive packages for industry than any state in the South over the last eight years.

Nonattainment Status Threatening Power Delivery in Dallas-Fort Worth

Dallas-Fort Worth's nonattainment status with the U.S. Environmental Protection Agency because of the four-county area's dirty air, is threatening delivery of electric power to the market. Construction of new power plants that are sorely needed to serve one of the South's largest markets cannot be done because new plants would contribute to existing ozone levels. Furthermore, new generating plants cannot be built under EPA regulations unless some of the older facilities are shuttered. Currently, all power generation in Dallas-Fort Worth comes from six gas-fired power plants owned by TXU. All six plants are older facilities that pollute more than newer plants built just outside the Dallas-Fort Worth metro by independent power producers as a result of deregulation of the electric power industry two years ago in the state. To date, the independent power producers are operating their plants located outside the D/FW Metroplex at low levels they say because transmission lines into the market are fully subscribed by TXU. This is going to be an interesting battle to watch in the near future.

Timco Aviation Growing in NC's Triad Region

On the brink of bankruptcy shortly after Sept. 11, Greensboro, N.C.-based Timco Aviation Services is now adding hundreds of jobs to its aircraft maintenance facilities at the Piedmont Triad International Airport. Timco added 500 jobs in 2003 and plans to add up to 400 this year. Timco has seen its revenue grow 90 percent in the last quarter from a year ago.

December

QUIZ

In the five years of 1998 through 2002, what was the total investment made by automotive-related manufacturing companies in the state of Alabama? (a) $1.8 billion; (b) $6.3 billion; (c) $12.5 billion (d) $557 million.

(Scroll down for answer)

Nissan Training Centers Open

Mississippi State University opened two training and engineering support centers for Nissan North America in December. The Center for Advanced Vehicle Research (CAVS) opened at MSU in Starkville on December 4 and a satellite facility opened near Nissan's new assembly plant in Canton on December 15. The centers will help the Japanese automaker develop more efficient vehicles at the Mississippi plant, as well as develop manufacturing and design methods for vehicle production. The Canton center is the engineering component and will also serve suppliers. Both centers will be operated by Mississippi State University and will train manufacturing employees for the Canton plant. CAVS is part of the $353 million incentive package Mississippi gave to Nissan when it chose the Magnolia State three years ago for its $1.43 billion plant.

Fourth Innovation Center Opens in Kentucky

The state of Kentucky has opened its fourth innovation center in a rural region of the state. The newest center is in Elizabethtown. The centers assist and encourage entrepreneurs in rural Kentucky in transforming ideas to product and product to market. Other innovation centers in rural Kentucky are located in Pikeville, West Liberty and Ashland.

World's Biggest Truck Stop Being Built in Arkansas

The St. Francis County (Arkansas) Transportation Commission is in the final site search phase for a $50 million truck stop that will be built on 200 acres on Interstate 40 about 45 miles west of Memphis. The stretch of Interstate 40 west of Memphis is one of the busiest sections of interstate in the country with 17,000 trucks on average rumbling from Memphis to Little Rock every 24 hours. The new truck stop will include all of the basic services, but will feature hotel accommodations, upscale dining and a retail mall. The truck stop will employ up to 400 when opened and up to 1,000 when the mall opens. When completed, it will be the biggest truck stop in the country.

Ford Likely to Refit Atlanta Area Plant

Two years ago, Ford sent site search teams to Georgia to find a site to replace its 57-year-old Hapeville, Ga. assembly plant. Two sites farther out of the Atlanta metro area were chosen. Unfortunately for the state of Georgia, a single site was not chosen by Ford officials. Ford backed off the plan to replace the aging facility, located on a mere 128 acres near the Hartsfield-Jackson Atlanta International Airport. In December, a Ford official stated that the company would continue to build Mercury Sables and Ford Tauruses at the facility for two more years and will likely refurbish the facility for new models after that, if market conditions are favorable. The statement is bad news for Georgia, whose legislators approved $50 million last year to purchase a site in the state for a new Ford plant. It's bad news in two ways: one, the decision by Ford to shelve a new replacement plant in the state means a new supplier network to support a new, modern, larger facility with much greater capacity is now history. A new Ford facility would have meant thousands of new jobs in Georgia. Secondly, domestic automakers such as Ford are dealing with overcapacity issues that compute to plant closures, not new or expanded projects. But there's good news for Georgia's automotive industry as well. For one, if domestic automakers close plants, they will likely be in higher cost areas, not in the South. Secondly, Georgia happens to be home to one of the best sites for an auto assembly plant; the former DaimlerChrysler site near Savannah. DC chose not to build a van plant at that site last year.

Mississippi Leads Nation in Unemployment Drop

In November 2003, Mississippi's unemployment rate dropped .7 percent, the largest reduction in unemployment rates of any state in that month. In November, the South saw the lowest unemployment rate among all four U.S. regions at 5.3 percent. Following the South was the Northeast at 5.5 percent, the Midwest at 5.6 percent and the West at 6.1 percent.

Hyundai to Pay $14 an Hour at New Alabama Plant

Officials for Korean automaker Hyundai announced in December the company will pay production workers $14 an hour when its new assembly plant near Montgomery, Ala. opens in 2005. The wage is comparable to the $15 an hour Nissan paid its production workers in Canton, Miss. when it opened that plant in May of 2003. Hyundai officials also announced the wage will jump to $21 an hour for workers that have been at the plant for at least two years. To date, over 14,000 people have applied for jobs at the Hyundai plant. The $1 billion facility will produce Santa Fe SUVs and Sonata sedans when and is expected to employ at least 2,000 workers by 2007.

Municipal Utility Makes History

Memphis Light Gas & Water (MLG&W) made history in December when it pre-paid TVA for 50 percent of its base load power supply for the next 15 years. The municipal utility serves residential, commercial and industrial customers in the Memphis, Tenn. region. It's the first time ever that a U.S. utility has pre-paid for as much as 50 percent of its base power. MLG&W officials said that by pre-paying, they are receiving a discount of $225 million over the 15-year period. Total cost of the pre-payment is estimated to be $1.4 billion.

After Five Years, FedEx Gets Green Light in North Carolina ... For Now

In the 1999 SB&D 100, this magazine named the 1998 spring quarter announcement by FedEx that it would build a cargo hub in Greensboro, N.C., one of the Top 10 Deals of the Year. After five years, maybe we should now recant that recognition and make the FedEx project in the Triad one of the top 10 deals for 2004. The U.S. Army Corps of Engineers in December finally agreed to give a federal water permit to the Piedmont Triad Airport Authority, paving the way for the 1,000,000-square-foot cargo hub. The permit is the last FedEx needs to build the facility that is expected to be operational by 2008 or 2009. When announced in 1998, the hub was expected to cost $300 million. That figure is expected to jump to over $400 million now. Opponents of the hub are expected to challenge the issuance of the permit.

Cinram to Create 500 Jobs in Nashville

Cinram International has leased the former La Vergne Distribution Center east of Nashville for a multimedia manufacturing and distribution center. The Toronto-based company makes pre-recorded CDs, DVDs and other multi-media products for a variety of users including movie studios and music companies. The deal is expected to create 500 jobs.

Wiring Company Moves HQ from N.Y. to Georgia

Cooper Wiring, which built a large distribution center in Peachtree City, Ga. in 1997, is moving its headquarters from Long Island City, N.Y. to the Georgia market located just southeast of Atlanta. Cooper, which makes various wiring devices, broke ground in December on a 50,000-square-foot headquarters facility in Peachtree City that is expected to house more than 100 employees.

Tech Company Relocates from Cleveland to Houston

Augrid, a developer and manufacturer of thermocouples, silicon carbide tools and nanoparticle technology has moved its headquarters from Cleveland to Houston. Much of the company's technology centers on electronic and display products.

Duke Energy Settles with FERC

Duke Energy agreed to pay almost $5 million to settle a dispute that it manipulated energy prices during the California energy crisis that occurred in 2000 and part of 2001. The settlement is with the Federal Energy Regulatory Commission and does not shield Duke from lawsuits and other liabilities that may come from California customers.

More Woop-d-Doop in the Triangle

No major market in the American South sees its economy see-saw as much as the Raleigh-Durham region. Of course, no local Southern economy is tied as tightly to a massive piece of dirt that is known as the Research Triangle Park. Here's a small example: Over the last dozen years, a traveler to RTP through the market's airport can find an aviation facility that's packed with customers one year, and virtually empty the next. Same is true with the rental car companies at RDU; easily available one year, impossible to get a car the next. Here's a larger example: IBM, which has laid off thousands of employees at RTP over the years, but remains a huge employer with 13,000, apparently is planning to move as many as 5,000 Raleigh-based jobs offshore. We'll let you know when the next great tech company hires 5,000 at RTP, making it impossible again to find a rental car in one of the South's great cerebral locales.

Georgia Governor Recants, Will Give $500M for Atlanta Sewers

We reported in November that Georgia Gov. Sonny Perdue shot down a proposal to assist the city of Atlanta with $500 million in state money to overhaul the city's sewer system. Well, in December, Perdue had a change of mind and agreed to dole out the $500 million. The total cost to fix Atlanta's sewer problems is estimated to be $3 billion (that's with a "b").

Kohl's Building Distribution Center near Macon, Ga.

Retailer Kohl's Corp. announced in December that it will build a distribution center in Bibb County near Macon, Ga. The center will be built at the Airport East Industrial Park and is expected to house 300 workers.

QUIZ ANSWER

Automotive-related manufacturers invested $12.5 billion (c) in Alabama from 1998 through 2002. The figure represented an astounding 37.4 percent of all manufacturing investments made in the state during those five years. Even more astounding, in 2002, automotive manufacturers invested more than $2.1 billion in Alabama, or 68 percent of all manufacturing investments made in the state that year.

 

November

QUIZ

True or False: During the month of October 2003, the 17-state American South experienced triple the amount of mass layoffs announced (50 jobs or more) than mass layoffs announced in economic powerhouse states' California, Illinois, Massachusetts, Michigan, New Jersey, New York, Pennsylvania and Ohio combined.

(Scroll down for answer)

Toyota Officials Back in Marion, Ark.

SB&D has learned that representatives of Japanese automaker Toyota were back in Marion, Ark. to look at the site that placed second in the company's site search for a pickup truck plant that landed in San Antonio. The visit occurred the week of Nov. 3-7. The visit by Toyota certainly doesn't mean an announcement is forthcoming, however, this magazine predicted in the winter of 2002/2003 edition that Toyota would choose both San Antonio (first) and Marion (second) for assembly plants, all within a three-year time frame. Rumors are also swirling that two other automakers, one from Germany and the other from Japan, looked at the Marion site in the fall 2003 quarter. Arkansas officials have placed a billboard near the Marion site with a headline that reads "First come, first served."

State Incentives Total $320M for Scripps

The only incentive packages in economic development history exceeding $300 million given out by Southern states were offered to automakers over the last 10 years. That's changed. The Florida Legislature approved $320 million for California-based Scripps Research Institute, the huge biotech concern that announced this fall it is building a 350,000-square-foot facility in western Palm Beach County. Palm Beach County is adding an additional $200 million to Scripps in the deal. The deal represents what might be the largest incentive package given to any company in the South's history. Also, the 6,500 projected jobs Scripps will create would be one of the South's largest job-making announcements in history.

Mercedes May Assembly New SUV in Alabama

Automotive News reported in mid-October that the Mercedes-Benz plant in Vance, Ala. may produce the G-Class Gelaendewagen, a high-end SUV now being built in Germany. The G-Wagen was first built in 1979 as a military vehicle for the Shah of Iran and is popular for similar uses in other countries. It can be compared favorably with the popular Hummer. The G-Class is built on a different platform than the M-Class, which has been assembled at the Vance-based plant since 1995 and the new R-Class, which will be built at the Alabama facility. Yet, a new variation of the G-Class could be designed and built at Mercedes' Alabama facility. The Mercedes plant in Vance, Ala. is undergoing a $600 million expansion that will add 2,000 workers and double production sometime in late 2004. The GST, or R-Class, is being added to the line. That vehicle is a variation of an SUV and a station wagon.

No Union Organization for Mercedes Plant

The recent United Automobile Workers union's quest to organize the expanding Mercedes plant in Vance, Ala. was dealt a blow in early October when DaimlerChrysler officials took a neutral stance on the matter. UAW officials had lobbied DaimlerChrysler's administration hard to allow card checks as opposed to plant-based secret ballots in an effort to unionize the Mercedes division of DaimlerChrysler A.G., the Stuttgart, Germany-based company that is the parent of both Chrysler and Mercedes. Specifically, though, UAW officials targeted the Vance Mercedes facility. Secret ballot voting for unionization has occurred at other foreign-owned automotive plants in the South, most recently with Nissan in Smyrna, Tenn., without any success. In fact, the UAW union has never organized a foreign-owned automotive plant in the United States, much less the South, where right-to-work laws are paramount.

In the summer of 2003, Nate Gooden, the UAW's chief negotiator with DaimlerChrysler said in a New York Times article that "Vance, Ala., will be a UAW organized plant in the very near future." Apparently that isn't going to be the case. Alabama Gov. Bob Riley was adamant about the UAW's desire to fill many of the 2,000 new jobs being created at the expanding Vance-based Mercedes facility. A spokesperson for Riley said that incentives given to Mercedes to expand its employment at the plant from 2,000 to 4,000 weren't given out so that the UAW could fill the positions with laid-off workers from Michigan. Riley demanded that those jobs be filled by Alabamians.

Kansas to get 7E7 Work

Boeing officials confirmed in late November that the aviation giant will build the flight deck and part of the fuselage of the new 7E7 Dreamliner at its facilities in Wichita. The 7E7 is Boeing's newest jetliner and is expected to be flown for the first time in 2008. Kansas approved a $500 million bond to lure the assembly factory for the new jet to Wichita. No decision on an assembly facility has been made, however. Yet, the flight deck and fuselage work prompted the city of Wichita to approve a $60 million bond for the company.

Atlanta Making Big Comeback in Job Creation

For most of the 1990s, Atlanta officials touted their market as No. 1 in the nation for job creation. That ended with the economic downturn. In fact, in 2001 and 2002 Atlanta lost more jobs than most major markets in the U.S. Yet, from August 2002 to September 2003, Atlanta led all other major metros in the U.S. with 65,700 new jobs created.

Georgia Governor Rejects $500M for Atlanta Sewer

Officials say it is going to take $3 billion to fix Atlanta's chronic sewer problems. Georgia Gov. Sonny Perdue recently rejected a plea by Atlanta officials to chip in $500 million over 10 years toward basic infrastructure improvements in the South's fourth-largest market. The city of Atlanta is on the hook for the $3 billion in improvements. But only 14 percent of the Atlanta MSA's total population lives in the city. As of now, those 450,000 residents could foot the $3 billion bill for the sewer improvements themselves. If that happens, expect a large out-migration from the city of Atlanta to suburbs that are already overcrowded to serious levels.

Atlanta MSA, an Expanding Monster

The federal Office of Management and Budget has added a record eight counties to the Atlanta Metropolitan Statistical Area. Now called officially the Atlanta/Sandy Springs/Marietta, Ga. MSA, the area encompasses 28 counties, 4.5 million Southerners and 8,379 square miles. Atlanta's MSA now extends to the west all the way to Alabama border, to the north almost to Tennessee and to the east within two counties of South Carolina.

Chinese Economic Development Delegation Visits Vicksburg, Miss.

A Chinese delegation led by Jiangsu Province's new Vice Governor, Zhang Weiguo, visited Vicksburg, Miss. in the fall to, among other things, understand regional development strategies in markets located on rivers in the U.S. Vicksburg is located on the Mississippi River. Officials in Jiangsu Province are focusing on major economic developments on the Yangtze River corridor and have singled out Vicksburg as a model for economic development on a major U.S. waterway. In addition to learning about Vicksburg's success at waterway development, the delegation met with businesses in the South to discuss investment by Chinese companies in the U.S.

Arkansas Lands Second Major Supplier This Year

Before Toyota put Arkansas on its site search map last year, the automotive industry did not exist for the most part in the Razorback State. But since Toyota chose San Antonio over Marion, Ark. for a pickup truck plant, the state has begun to create some momentum in the auto sector. Following a major supplier announcement by Dana Corp. in Osceola, Ark. earlier this year, Sakae Riken Kogyo Co., a Japanese supplier, announced a $15 million, 250-employee plant in Wynne. Wynne, Ark. is located about an hour northwest of Memphis.

TVA Approves Millions in Tax Payments to Southern States

The Tennessee Valley Authority is paying state and local governments in the South a record $329 million in tax payments for the 2003 fiscal year. The federal utility has been making tax equivalent payments to states in the South since its inception in 1933. The payments are based on electric power sales and TVA owned property in seven Southern states. Tennessee, where TVA provides the most power of any Southern state it operates in, is receiving about $200 million of that $329 million this year. Alabama will receive over $77 million. Knoxville, Tenn.-based TVA is the nation's largest public power producer and receives no federal tax assistance.

Alabama Looking at Hyundai Construction Workers' Home States

Officials with the state of Alabama are looking into reports that too many out-of-state workers are helping build Hyundai's auto assembly plant south of Montgomery. The investigation was prompted by an Alabama newspaper report showing that of all the construction workers' automobiles parked in the construction lot on a day in November, about 40 percent had out-of-state license plates. Agreements were made by Hyundai and the state to use a certain amount of Alabama-based labor in the construction of the massive plant.

Toyota Takes New Approach to Construction Hiring in San Antonio

Toyota officials have instructed building contractors for its new pickup truck plant in southwest San Antonio to hire all qualified workers it can find in the San Antonio 12-country metro area before it looks elsewhere in Texas for labor. The Japanese automaker has also set a goal of 20 percent worth of construction contracts to minority builders. Over 2,000 laborers are expected to help construct the $800 million assembly plant, which will open in 2006. Officials with Toyota want to hire as many workers in San Antonio as possible for the plant's construction. The city of San Antonio and Bexar County, where the plant is located, shared equally with the state in the incentive package given to Toyota. Usually, the state provides the lion's share of incentives for projects the size of automotive plants. Giving San Antonio-based workers a better chance at landing jobs for the construction of the plant is a way Toyota is thanking local San Antonio governments.

First Toyota Supplier Announces in Texas

Tasus Corp., an Indiana-based supplier of plastic injection molded products for the automotive industry, has announced it will buy or lease a manufacturing facility near Toyota's plant being built in San Antonio. Company officials maintain that a handful of markets in Central Texas remain in the hunt for the 100,000-square-foot, 150-employee facility including Pflugerville and Georgetown, both suburbs located north of Austin.

Georgia Changes Direction on Buying Potential Ford Site

After agreeing to do so, economic development officials in Georgia have decided against buying nearly 1,500 acres of land in Morgan County for a new Ford Motor Co. plant that would have replaced the company's aging facility in Hapeville. For two years Ford officials have been site searching in Georgia for a site to build a new plant to replace the one it operates near Atlanta. The decision not to purchase the land indicates that Ford has chosen not to replace the Hapeville plant just yet.

Big Challenge for Kannapolis, N.C.

For almost a century, downtown Kannapolis, located in the Charlotte metro area, was home to Pillowtex Corporation's headquarters. In fact, Pillowtex facilities made up almost the entire central business district of Kannapolis. When Pillowtex dissolved operations in Kannapolis and elsewhere in the South, Kannapolis' downtown became a ghost town. Now city leaders are facing a challenge many other smaller cities in the South are facing: what to do with large, empty buildings in their central business districts.

Toyoto Breaks Ground in Jackson, Tenn.

Toyota Motor Manufacturing of America broke ground on its Bodine Jackson plant in November in Jackson, Tenn. The plant will open in 2005 when it will produce engine blocks for various Toyota and Lexus products including the Tundra, Corolla, Camry, Avalon and RX330. The facility will produce one million engine blocks annually and house at least 200 employees.

Two Southern States Land on Milken Tech Report

Maryland and Virginia are the only two Southern states to rank in the top 10 in the recently published Milken Institute's Science and Technology Index. Massachusetts, Colorado and California were at the top of the ranking respectively and Maryland and Virginia ranked fourth and fifth respectively.

Scripps to Redefine Western Palm Beach County

The massive Scripps Research Institute project now underway in Palm Beach County, Fla. will change the last remaining rural land available in South Florida forever. Palm Beach County is ponying up $200 million to purchase 1,900 acres of rural orange groves in its western region and build a state-of-the-art, 364,000-square-foot research hub. In time, the hub is expected to create as many as 6,500 jobs in it and as many as 40,000 around it. Scripps has also secured over $300 million in incentives from the state of Florida.

Toyota Expands Kentucky Facility

Toyota's Erlanger, Ky. research and development facility is expanding. The Japanese automaker is adding about 100,000 square feet and 75 new jobs at its R&D center in Northern Kentucky. The expansion should be completed by summer of 2004.

Biotech Expenditures Top $200 Million in Kansas City

In the last three years, expenditures from grants and contracts in Kansas City's life sciences industry topped $200 million. The figure represents the largest total ever in Kansas City over a three-year period. In addition, about $1.5 billion (that's with a "b") has recently been targeted for construction of research facilities in the area.

RJ Reynolds Bringing 1,000 New Jobs to N.C.

The merger of RJ Reynolds and Brown and Williamson will result in 1,000 new jobs in the Winston-Salem, N.C. area. The expansion could generate a $40 million to $50 million investment by the cigarette maker.

Quad/Graphics Opens in OKC

Quad/Graphics opened its 218,000-square-foot printing plant in Oklahoma City in the fall quarter. The facility employs 100 workers, but expects to expand to its original announcement of several years ago of 1,000 workers within three years. The plant is Quad's first west of the Mississippi River.

Boeing Adding 500 Jobs in Tulsa

Oklahoma's Boeing facility in Tulsa has been chosen to receive at least 500 new jobs beginning as early as next year to provide the fixed and moveable leading edges of the wing of the company's 7E7 Dreamliner. No assembly location has been chosen as of yet by Boeing for the 7E7.

GM Officially Dedicates New Shreveport Plant

Three years ago GM announced a $500 million retooling of its Shreveport, La. assembly facility in order to build the new Chevrolet Colorado and GMC Canyon pickup trucks. The new facility was officially dedicated in mid-October. The Michigan-based automaker employs over 2,500 at the northwest Louisiana assembly plant.

Big Deal in Laurens County, S.C.

Plastics manufacturer Sterilite Corp. announced in late November it is building a two million-square-foot manufacturing and distribution facility in Clinton, S.C., which is located in Laurens County near Greenville. The Townsend, Mass.-based company is investing $65 million in the facility and expects to employ 600 at the new plant when fully operational.

Two Announcements Made in One Day in Martinsville/Henry Co., Va.

Defense contractor MZM, based in Washington, D.C., is buying a shell building in Martinsville and adding 150 new jobs. MZM provides information technology services to the federal defense and intelligence communities. The company recently secured a new contract with the U.S. Army National Ground Intelligence Center in Charlottesville, Va. MZM is investing $5 million in the deal. On the same day in early November that MZM announced its project, Globaltex, an international provider of chenille and textured yarn for upholstery products, announced it was investing $5 million in Henry County. The company is moving into a 77,000-square-foot building and will hire 154 workers.

Nissan Begins Full-Size Pickup Truck Production in Mississippi

Nissan began production this fall on its first full-sized pickup truck, the Titan at the automaker's $1.43 billion manufacturing facility in Canton, Miss. The launch of the Titan is the third of five models to be produced at the new plant. In May, production of the Quest minivan began and in August Pathfinders were first assembled at the plant. The Canton factory will have the capacity to produce a total of 400,000 vehicles each year when fully operational. At that time, the plant will total 3.5 million square feet and house 5,300 workers.

Ford to Build Hybrid SUV in Kansas City

Ford will build a hybrid version of the Ford Escape at its Kansas City area assembly plant in Claycomo, Mo. The Escape will be the auto industry's first SUV that operates on both gasoline and electric power. Production is expected to begin in the summer of 2004. The announcement follows a decision by Ford to keep its St. Louis assembly plant open for now. The automaker previously announced the St. Louis plant was headed for closure. Ford's Claycomo, Mo. plant employs nearly 6,000 workers with an annual payroll of more than $400 million. The Ford F-150 pickup truck and two SUV models, the Tribute and Escape, are made at the plant.

QUIZ ANSWER

False: The answer is the other way around. October of 2003 saw mass layoffs in California, Illinois, Massachusetts, Michigan, New Jersey, New York, Pennsylvania and Ohio total 975 companies that laid off 50 employees or more. The 17-state American South, on the other hand, experienced a mere 301 mass layoffs in October. So, those states had more than triple the amount of mass layoffs than the South did in October. You might be saying to yourself right now, "that's because those states outside the South used in the QUIZ have a larger business and population base." Nah. We used the aforementioned states located outside the South in the QUIZ for a reason. Their population collectively totals 109.2 million. The South's population is estimated by the Census Bureau now as 108.8 million.

 

October

Another Big Buffalo for Alabama?

Alabama Gov. Bob Riley was absent from the ever-important Southeast U.S./Japan Conference in Tokyo on Monday, October 27. Several Southern governors and their economic development entourages are attending the conference. Riley was scheduled to attend, however, sources told us he bolted from the conference to deal with some issues regarding a large project. Boeing is currently in a site search for its 7E7 Dreamliner plant. Mobile, Ala. remains in the mix for that deal.

Editorial

Our Count: 73 Major Factories Closed in Rural South

So far this year (Jan, 1, 2003 to October 27, 2003), the rural South has seen 73 major plant closures of 100 jobs or more. What's significant about that figure? It equals the total number of major plant closures in the Rural American South in all of 2002. In other words, plant closures in rural towns and counties throughout the South and probably in other regions are increasing, not decreasing as some would want you to believe.

The good news in this NAFTA-generated loss of jobs and industry is that of those 146 plants that shuttered their doors from Jan. 1 2002 to Oct. 27, 2003, 113 came from the textiles, apparel, furniture/wood products or food products industries. In other words, most of the closures are in a handful of industries, almost all of which are low-wage industries.

In comparison, currently there are about 3,000 automotive industry-related factories in the South employing 100 workers or more. Of those, only four have closed so far this year and three closed last year. Most of those assembly and supplier plants are operating in the rural South.

If the fact that a mere two-tenths of a percent of the region's major automotive industry factories closed during a tough two years isn't enough to convince auto industry execs that the South is the place to operate in the U.S., then nothing will. Furthermore, if that data doesn't convince leaders in the rural South to focus like a laser on the automotive industry, then nothing will, as well. Someone should link those two large entities together. Hey, that would be me.

Mike Randle (mike@sb-d.com)

Editorial

Did He Really Say That?

A recent article published by the Atlanta Journal-Constitution focused on what will be done with the 1,500-acre Pooler, Ga. site that was to be developed by DaimlerChrysler. DC decided against building a 3,000-employee Sprinter van plant on the site in September. Georgia Gov. Sonny Perdue was quoted as saying he would prefer to preserve the site for the next auto assembly plant that comes down the pike. Perdue is right to do so. The site features $60 million in improvements and is located at the junction of I-95 and I-16. It happens to be one of two very attractive sites for auto assembly in the South. The other site is in Marion, Ark.

But in the article, Jim Hossack, a senior consultant with Auto-Pacific, Inc., an automotive industry research firm based in California with offices in Michigan, said that landing an automotive assembly plant is a "high risk" venture. He cited DC's back down and the current overcapacity in the industry. His tone in the article indicated that states in the South should reconsider the recruitment of automotive assembly plants. Maybe Mr. Hossack should take a tour of more than three-dozen markets in Alabama where the automotive industry has virtually transformed their economies in just 10 short years.

The landing of an automotive assembly plant remains the crown jewel of economic development recruitment in the South. No industry at any time in the South's economic history has had such a positive effect than the automotive industry over the last 20 years. To suggest that states in the South be wary of the automotive industry and auto plants in particular is simply one of the most ludicrous statements we've heard all year. By year's end, significant (100 jobs or more) new and expanded automotive plants in the South will top the 100 mark and only four have closed this year. No single industry can match that performance. In fact, over the last three years, no single industry has even come close. That being the case, states in the South must do everything they can to court automotive, especially the biggest deal of them all, automotive assembly.

Lee Burlett (lee@sb-d.com)

DCI Names Best Business Climates

Texas has been ranked the No. 1 business climate in the U.S. by Development Counsellors International, a New York-based consulting firm. Following Texas this year is North Carolina and South Carolina. DCI ranks state business climates each year by polling executives of companies with annual revenues of more than $100 million.

QUIZ

In what Southern state is Fort Knox located? (a) Tennessee; (b) Mississippi; (c) Virginia; (d) Kentucky; (e) Alabama. BONUS QUESTION: Name the metropolitan area Fort Knox is located.

(Scroll down for answer)

DHL Latest Big Company to Relocate HQ to the South

Rubbermaid, Philip Morris, Fidelity, R.R. Donnelley and Louisiana Pacific are just a few of the high-profile companies that have announced this year they are relocating their headquarters from outside the South to the South. Add DHL to that mix as well. The small package carrier, with headquarters in Brussels, Belgium and a division of the German postal service, is relocating its North American headquarters from Seattle to South Florida.

Louisiana-Pacific Picks Nashville for HQ

Louisiana-Pacific is the latest large corporation to relocate its headquarters to the South. The building material supply company is relocating its headquarters from Portland, Ore. to Nashville within the next year. The company chose Nashville over Charlotte, Jacksonville and Richmond. In a related case, Charlotte will lose its existing LP sales and marketing unit, which employs about 50 workers. That department is headed to the new Nashville headquarters.

Bank of America Hiring 340 in Charlotte

Charlotte-based Bank of America is adding 340 jobs at its home-equity division. The company already employs 2,000 at its facility in Gateway Village. B of A employs almost 14,000 in the Charlotte MSA.

South's Small Businesses Show Most Optimism

Small businesses in the South have shown the most optimism about the economy over the next six months in another study done by American Express. According to the study, 66 percent of small business owners in the Midwest were upbeat about the current economy, while 63 percent felt the same way in the Northeast. In the West, that optimism was at 71 percent. But in the South, 80 percent of small business owners were bullish on the economy.

More Relocations to the South

Goodrich is closing its aerospace plant in New Jersey and will open a new facility in the Carolinas. No Carolina locations for the new plant have surfaced as of this writing. List, a Swiss technology company, is relocating its U.S. headquarters from Massachusetts to southwest Charlotte. In addition, Strategic Partners, a maker and distributor of work uniforms and footwear, is moving its distribution center from Los Angeles to Dallas. The company will bring with it some personnel from California but the number is unknown. What is known is SP will hire 200 in the Dallas area and build a 242,000-square-foot distribution center in southwest Dallas. A spokesperson for SP cited tax and workers' comp issues in California as reasons supporting the relocation. Finally, S.Com, is moving its headquarters from San Francisco to downtown Miami. The company is a division of U.K.-based S.Com Group, a consultant to high-tech industries.

Georgia Opening Office of International Protocol

Atlanta and South Florida are in a tight race to secure the headquarters of the Free Trade Area of the Americas and Georgia Gov. Sonny Perdue has come up with an idea that may swing the deal in his favor. The Peach State is creating an office of international protocol that will provide assistance to foreign leaders who visit or conduct business in the state. The new facility will serve as a central location for international officials and will assist them with various arrangements during their stay.

North Carolina DOT Wants Tolls on I-95

Interstate 95, one of the nation's busiest roadways and the primary north-south route on the East Coast, may get some new tollbooths in the Tar Heel state. The North Carolina Department of Transportation has made a request with the Federal Highway Administration for permission to charge tolls on Interstate 95 to pay for improvements made on the road. North Carolina has already spent about $3 billion in the last 10 years on I-95. The request asks that six toll centers be built on I-95 that could charge as much as $3 each.

QUIZ ANSWER

Fort Knox is located in Meade County, Kentucky. Where is Meade County? Why, it's in the Louisville, Ky. MSA. Pat yourself on the back if you got that bonus question. Fort Knox is a large contributor to the Louisville area economy. Its payroll exceeds $600 million annually.

Study Claims Wichita Has Easiest Commute

American City Business Journals recently completed a study on commutes in U.S. metros. The study found that Wichita, Kan. has the easiest commute of any mid-size or large city in the country. The ACBJ Commuting Ease Index compares each metro's number of workers with short commutes to those with long commutes (45 minutes or more). The five worst commutes in the study, regardless of market size, were New York, Washington-Baltimore, Atlanta, Chicago, Picayune, Miss. (outside New Orleans) and East Stroudsburg, Pa.

Editorial

The South's Biggest Battle Grounds

This editorial isn't historical. It will not deal with brutal battlegrounds at Fredericksburg, Chickamauga, Fort Sumter, Shenandoah, Bull Run, Shiloh or Vicksburg. No, this description of 21st-century battlegrounds has to do with states and markets in the South that compete for jobs as if it were indeed a war.

When I first launched this magazine almost 12 years ago now, it was common to visit a community and hear the economic developer spend the majority of his or her time with me bad mouthing the county next door. I would then move on to the county next door and hear the same thing. Yep, fighting among neighbors in the same state was commonplace in 1992. Economic developers back then must have felt that the best way to land your expansion was to bury the competition with words. It was no different than family feuds such as the Hatfield and McCoy's, minus the deadly hardware.

It was also a common practice for the gas and electric company to go at each other. We actually accepted and published an ad in 1993 that featured a line drawing of a middle-class rural South home. The drawing showed the back of the house and clearly the large propane gas tank next to the deck. The headline of the ad read, "The bomb in your back yard." Gas companies did the same thing in those days, but not so blatantly.

Around 1995, "regionalism," or cooperation among neighbors in the never-ending economic development quest, was a practice that was getting some big-time attention in the South. North Carolina invested in it like no other state at the time and no other state since. Alvah Ward, the former director of North Carolina's Department of Commerce, told me at the time, "Mike, it's the end of economic development in North Carolina as we know it." To this day, I am still pondering that statement.

But it wasn't North Carolina that started the good neighbor economic development recruitment strategy. Virginia had implemented regionalism (a happy cluster of competitors) with little fanfare as early as the late 1980s. And interestingly enough, it was rural based and rightly so.

As an executive looking for a site for your company in the South, you will experience more cooperation among Southern states, counties and utilities than ever before. The backbiting, generally, is all but over. Even Alabama and Mississippi have joined together to recruit industry to their rural border areas. That partnership is unprecedented. Never before have two states linked together to recruit industry.

But there are still pockets of resistance. There are still brutal battlegrounds recruiting your project. In fact, there remain areas of the South where the battle for industry is invisible on the outside, yet, inside, in the back rooms, it's war.

The following are areas of the South that fight, scratch, claw and spit at each other like no other places in the region. These states, communities or regions are all extremely professional in how they practice economic development and are very attractive places to locate your business. It's just that these folks know full well what the daily competitive grind of locating industry is all about. And that might not be such a bad thing for your next expansion. In short, the following states, regions and counties wake up each morning and arm themselves with weapons for the recruitment battle like no other in the American South. Why? Well, their competitors next door are right behind them with even more deadly weapons.

The 10 Biggest Economic Development Competitors in the South

1. Charlotte, N.C. vs. Central and northern South Carolina

South Carolina's aggressive incentives have lured more than one Charlotte-based company over the line into South Carolina. Now it looks like the worm has turned. SC is without rudder and NC has recently indicated a competitive edge missing for years.

2. Hampton Roads, Va. vs. Hampton Roads, Va.

You won't notice it when site searching this large region of Virginia on your first visit, but community leaders in places like Virginia Beach, Norfolk, Newport News, Suffolk and Chesapeake are fierce competitors behind the scenes.

3. Charlotte vs. Jacksonville vs. Richmond vs. Nashville

These four markets may be the hottest in the South for headquarter relocations from outside the region. They are constantly butting heads with each other for the same deals.

4. Memphis vs. Northern Mississippi

A regional effort to band this region together is underway as I write this. Good luck!

5. Dallas vs. North Dallas

Blatant incentives specifically designed for companies located in Dallas to move up the road to Frisco, Tex. says enough.

6. Dade County, Fla. vs. Broward and Palm Beach Counties

A war of words, incentives and bad-to-the-bone blood. Fightin' counties in paradise.

7. Pennsylvania vs. West Virginia

OK, Pennsylvania isn't in the South. But West Virginia is. Enough said.

8. Inside Atlanta's Perimeter vs. Outside Atlanta's Perimeter

You can't feel any love here. Almost all counties outside the Interstate 285 perimeter in the Atlanta MSA spend all of their marketing dollars targeting companies inside the perimeter.

9. Oklahoma City vs. Houston

A small battle, so far, is breaking out between these two economies that remain centers for the oil industry.

10. North Carolina vs. South Carolina

No two states in the South fire shots at each other like these two.

Mike Randle (mike@sb-d.com)

QUIZ

Which two states in the South were involved in the Hatfield and McCoy feud?

(Scroll down for answer)

Magazine Cites Savannah

Expansion Management magazine recently named Savannah, Ga. the No. 1 distribution and logistics location in the nation. The magazine based its rankings on data derived from the U.S. Bureau of Transportation Statistics, Bureau of Economic Analysis, Federal Aviation Administration and the Federal Highway Administration among others. Criteria used in the study included transportation infrastructure, road conditions, rail to highway connections, cargo capabilities and interstate highways.

Arkansas Lands Second Major Supplier This Year

Before Toyota put Arkansas on its site search map last year, the automotive industry did not exist for the most part in the Razorback State. But since Toyota chose San Antonio over Marion, Ark. for a pickup truck plant, this state has begun to create some momentum in the auto sector. Following a major supplier announcement in Osceola, Ark. earlier this year, Sakae Riken Kogyo Co., a Japanese supplier, announced a $15 million, 250-employee plant in Wynne. Wynne, Ark. is located about an hour northwest of Memphis.

Big Deal in Florida Emerges

We wrote in late September of a big deal in the air in Florida and now in mid-October we know what it is. The Scripps Research Institute, which operates a major biotech research center near San Diego, announced on October 8 it had chosen Palm Beach County, Fla. for a new science center that will take up nearly 400,000 square feet and create over 6,000 jobs. Scripps employs about 3,000 in California at its research center and is the leading non-profit biomedical research firm in the U.S. To date, the company has spun off 40 biotech companies in Southern California. Officials in South Florida say that site requirements for Scripps and it suppliers could total as much as 2,000 acres. That type of site is hard to come by in South Florida. However, Jupiter, Fla. and Palm Beach Gardens are two of just a handful of locations in Palm Beach County that could accommodate Scripps' site requirements. In a story published by the Boca Raton News on October 13, Gov. Jeb Bush said that 40,000 spin-off jobs could be created by Scripps locating in Florida.

New Venture Capital Fund for Appalachia

U.S. Senate Majority Leader Bill Frist (Tenn.) and Tennessee Congressman Zack Wamp joined with the Appalachian Regional Commission and TVA on October 7 to announce a new $12.5 million Southern Appalachian Venture Capital Fund (SAF). The fund will be a source of equity capital for businesses that historically have not had access to equity capital. The fund actually targets the Southern Appalachian region, which basically encompasses the Tennessee Valley.

Wake Forest University Sets Up Nano Center

The Center for Nanotechnology, a division of Winston-Salem, N.C.-based Wake Forest University's physics department, is now operating with 15 skilled scientist. The center is expected to draw new technology industries to the Triad region. The formation of the Nanotech center happened quickly. This past summer, officials with Wake Forest offered $1 million to professor David Carroll and 14 of his fellow scientists at the Lab for Nanotechnology at Clemson University. Carroll and the other scientists at Clemson agreed to the offer.

QUIZ ANSWER

Kentucky and West Virginia


Top 20 Family-Owned Businesses in the South

Company/Family Revenues Headquarters
1. Wal-Mart (Walton) $244.5 Bentonville AR
2. Tyson Foods (Tyson) $23.3 Springdale AR
3. Mars (Mars) $17.0 McLean VA
4. Publix (Jenkins) $16.0 Lakeland FL
5. General Dynamics (Crown) $13.8 Falls Church VA
6. Anheuser-Busch (Busch) $13.6 St Louis MO
7. Winn-Dixie (Davis) $12.3 Jacksonville FL
8. H.E. Butt Grocery (Butt) $9.9 San Antonio TX
9. Cox Enterprises (Cox) $9.8 Atlanta GA
10. Marriot International (Marriot) $8.4 Washington DC
11. Clear Channel (Mays) $8.4 San Antonio TX
12. Dillard's (Dillard) $7.9 Little Rock AR
13. JM Family Enterprises (Moran) $7.8 Deerfield Beach FL
14. Enterprise Rent-a-Car (Taylor) $6.5 St Louis MO
15. Dollar General $6.1 Goodlettsville TN
16. Danaher Corp $4.6 Washington DC
17. Carnival Corp $4.4 Miami FL
18. Hallmark Cards $4.2 Kansas City MO
19. Murphy Oil $4.0 El Dorado AR
20. Milliken & Co $3.6 Spartanburg SC

-Source: Family Business Magazine. Revenues in billions (that's with a "B"). Note: The degree of family control and involvement in the companies ranked above varies, but all companies on the list have either a single family controlling ownership, members of the family are currently active in top management or the family's involvement extends over more than one generation.

Editorial

Lost Manufacturing Jobs Vaporized Forever in the South? Nah.

But in other U.S. regions, that could be the case.

You've heard it from more than one economist. You've read such things as "it's pretty bleak out there and those manufacturing jobs aren't coming back." Yes, tens of thousands of U.S. manufacturing jobs have gone offshore just this year alone. Unfortunately, the majority of the manufacturing jobs lost in the U.S. this year have come from the South and its rural regions have felt the brunt of the impact. But that's only because the majority of manufacturing jobs in the U.S. are located in the South, specifically the rural South, or counties with less than 100,000 in population.

This bloodletting continues a trend that started in the late 1990s, or when the U.S. dollar rose to value-heights not seen in decades. But before we make a believable argument that a good portion of those manufacturing jobs lost in the last five years will eventually come back, and to the rural South in particular, let's look at a few facts:

1. From 1991 to 1998, over 100,000 net manufacturing jobs were created in the rural South alone.
2. During that same time, rural factory jobs jumped over 4 percent in the region.
3. Nearly half of all manufacturing job losses in the South since 1/1/01 were the result of plant closures, not relocations offshore. Plant closures indicate a bad economy.
4. If you are a prolific reader, you could easily believe there are no manufacturing jobs left in North Carolina. Nothing could be further from the truth. The Tar Heel State, hit harder per capita than any other state in the South, has lost nearly 100,000 blue-collar jobs since 2000. Yet, that is but 12 percent of its total and it should be noted that about 60 percent of those jobs lost came from one industry sector -- textiles and apparel.

It's our opinion that those economist who have been quoted as saying "those manufacturing jobs aren't coming back" are all wet in one very important -- at least for us -- category. Yes, we agree those manufacturing jobs lost in the West, Midwest and the Northeast since 1998 may not come back. But they will come back, in waves, in the American South. Here's why:

1. The American South is the least-expensive region in which to manufacture in the largest consumer nation, by far, in the world.
2. The Rural American South is the least-expensive location in which to manufacture in the most active manufacturing region in the largest consumer nation, by far, in the world.
3. The automotive industry, especially foreign automakers, will continue to locate in the American South at numbers never before seen. Their suppliers, by the way, prefer rural locations, in this case, rural South locations.
4. Let's face it, the economic downturn of the last three years is more to blame than the prospects of cheap offshore labor for manufacturing job losses, not only in the U.S. as a whole, but in the South in particular.
5. A growing economy, like that found in most of the 1990s, will bring manufacturing jobs back to the South, but not to other high-cost areas of the country such as California, parts of the Midwest and almost all of the Northeast. Yes, in those regions, "those jobs aren't coming back."
6. High-end manufacturing from foreign companies will continue to develop in the American South, especially when the recovery turns to recovered.
7. For most manufacturers, it's cheaper to make their products in the U.S. if indeed it's U.S. customers they are selling to.

As you can see, we are bullish on manufacturing in the South. But of all the reasons manufacturing jobs will come back to the South, reason No. 1 is paramount. We are the largest consumer nation in the world, and manufacturers will always find the most cost-effective place in this nation to manufacture their products. And the South is that place.

Mike Randle (mike@sb-d.com)

Auto Park Being Developed in South Carolina

Clemson University announced this month it is developing an automotive research park in Greenville. The park, called the International Center for Automotive Research, will merge higher-learning research capabilities with the private automotive sector. Clemson officials said the park will include a graduate school of auto engineering. The new park will be located on 400 acres that front Interstate 85 in southern Greenville County.

More Manufacturing Jobs Lost in China than in U.S.

A report from Alliance Capital's Global Economic Research Department claims that more manufacturing jobs have been lost in China than in the U.S. since 1995. The report revealed that 11 percent of U.S. manufacturing jobs were lost between 1995 and 2002. In comparison, 15 percent of China's manufacturing jobs have been lost during the same period.

Toyota Breaks Ground in San Antonio

The ceremonial ground breaking of Toyota's pickup truck plant in South San Antonio took place in October. Dennis Cuneo, senior vice president of Toyota Manufacturing North America was present at the event as was Hidehiko Tajima, who will serve as president of the Texas plant. Cuneo noted that he had never seen such a large crowd at any of the automaker's groundbreakings. Toyota will build Tundra pickups at the new plant.

UAW: Baltimore GM Plant to Close

The president of United Auto Workers Local 239 in Baltimore claimed that General Motors is planning to close its old Baltimore assembly plant sometime in 2005. The plant houses just over 1,000 workers who assemble mid-sized vans.

Georgia GM Plant to Build New Vans

General Motor's Doraville, Ga. assembly facility is adding four new minivans to its assembly lines for 2005. The Pontiac Montana SV6, Buick Terrazza, Chevy Uplander and Saturn Relay will all be made at the Georgia plant, which is located near Atlanta. The Saturn and Buick models are first-time minivans for those two GM divisions.

Mercedes May Assemble New SUV in Alabama

Automotive News reported in mid-October that the Mercedes-Benz plant in Vance, Ala. may produce the G-Class Gelaendewagen, a high-end SUV now being built in Germany. The G-Wagen was first built in 1979 as a military vehicle for the Shah of Iran and is popular for similar uses in other countries. It can be compared favorably with the popular Hummer. The G-Class is built on a different platform than the M-Class, which has been assembled at the Vance-based plant since 1995 and the new R-Class, which will be built at the Alabama facility. Yet, a new variation of the G-Class could be designed and built at Mercedes' Alabama facility. The Mercedes plant in Vance, Ala. is undergoing a $600 million expansion that will add 2,000 workers and double production sometime in late 2004. The GST, or R-Class, is being added to the line. That vehicle is a variation of an SUV and a station wagon.

Georgia Officials Approve Purchase of Potential Ford Site

The state of Georgia already owns one of the South's best sites for an auto assembly facility. That would be the 1,500-acre, Pooler, Ga. site that was secured for DaimlerChrysler. Now Georgia officials have approved the purchase of another 1,500-acre site. While state officials won't say, the site might be for a new Ford plant that may or may not replace the automaker's Hapeville, Ga. facility. Speculation has it that the site the state is buying is either in Meriweather or Morgan Counties, two locations about an hour from Atlanta Hartsfield International Airport.

Automotive Deal in Orlando

Detroit-based Trans Logic Auto Carriers, a holding company for Chrysler Corp., has leased 23 acres in the Taft-Vineland area near Orlando International Airport. The company transports and stores automobiles for Chrysler nationwide.

Japanese Supplier Opens Plant in North Carolina

NT Techno USA, a Japanese-owned company that manufactures automotive transmission parts, officially opened its new $21 million, 63,000-square-foot production facility in Oxford, N.C. on October 8. The Oxford plant, located in Granville County, is NT Techno's first venture in the U.S. The company will supply transmission parts to AW North Carolina in Durham, which manufactures and distributes fully assembled automatic transmissions for Toyota Motor Manufacturing North America. On October 7, AW NC dedicated its new expansion in Durham that will provide 450 new jobs. NT Techno has manufactured automotive parts since 1927.

Mercedes Supplier Building in Birmingham

Toronto-based supplier Decoma International is leasing 120,000 square feet of space in a 300,000-square-foot building being built by Birmingham-based Graham & Company. The location is the Jefferson Metropolitan Park (JeffMet), located southwest of the city of Birmingham. Decoma will produce plastic exterior parts for the next generation Mercedes M-Class and the new Grand Sports Tourer, or GST. The Vance, Ala. Mercedes assembly plant is undergoing a $600 million expansion that will double employment to 4,000. Oxford Automotive and Plastech, two other suppliers, are currently building their facilities in JeffMet. Decoma International is part of the Magna International group that produces auto parts for various automakers in North America, Europe, and Asia.

No Union Organization for Mercedes Plant

The recent United Automobile Workers union's quest to organize the expanding Mercedes plant in Vance, Ala. was dealt a blow in early October when DaimlerChrysler officials took a neutral stance on the matter. UAW officials had lobbied DaimlerChrysler's administration hard to allow card checks as opposed to plant-based secret ballots in an effort to unionize the Mercedes division of DaimlerChrysler A.G., the Stuttgart, Germany-based company that is the parent of both Chrysler and Mercedes. Specifically, though, UAW officials targeted the Vance Mercedes facility. Secret ballot voting for unionization has occurred at other foreign-owned automotive plants in the South, most recently with Nissan in Smyrna, Tenn., without any success. In fact, the UAW union has never organized a foreign-owned automotive plant in the United States, much less the South, where right-to-work laws are paramount.

In the summer of 2003, Nate Gooden, the UAW's chief negotiator with DaimlerChrysler said in a New York Times article that "Vance, Ala., will be a UAW organized plant in the very near future." Apparently that isn't going to be the case. Alabama Gov. Bob Riley was adamant about the UAW's desire to fill many of the 2,000 new jobs being created at the expanding Vance-based Mercedes facility. A spokesperson for Riley said that incentives given to Mercedes to expand its employment at the plant from 2,000 to 4,000 weren't given out so that the UAW could fill the positions with laid off workers from Michigan. Riley demanded that those jobs be filled by Alabamians.

Maryland Launches Raid Radio

The Maryland Department of Business and Economic Development has begun a radio advertising campaign in New York, New Jersey, Chicago and Boston. The radio ads tout Maryland's existing industries, including Toyota Financial Services, Citicorp among others. The ads promote Maryland's business climate for financial services and high-tech industries.

Editorial

Businesses in California, Listen Up!

I read with interest a story written by Gillian Flaccus, distributed by the Associated Press and published by Atlanta Journal-Constitution on October 23. The story was about states in the West that are seducing businesses in California, namely Oregon, Nevada and Idaho. The neighboring states are taking advantage of California's problems, which primarily center on high-operating costs for business, a political landscape that's odd at best and an overall state economy that is beset with problems.

Let's get right to the point. If you are considering moving your business from California to another state, the most likely reason is the incredibly high cost of operating your business in that state. When the economy is humming and you're making money hand-over-fist, high operating costs are not that noticeable. But when profit margins are reduced for lack of contracts or buyers, you tend to look at your overhead more closely. That being the case, why not compare the general business climate and overhead presented by those courting your business aggressively -- other states in the West -- with that found by states in the South.

That's exactly what Bill Foley, Chairman of Fidelity Insurance did when his company decided to leave Santa Barbara, Calif. Foley crunched the numbers and found that a state in the South, namely Florida and specifically Jacksonville, was a fit for him. Foley found that no state in the West could compete with the South when it comes to overall business climate and the cost of operating a business.

So if recruiting officials in Oregon, Idaho or Nevada are selling you on their business climates, ask them if they are part of the World's Third-Largest Economy, which is the American South (behind only the U.S. and Japan and ahead of Germany in Gross Product generated). Ask them if the average cost of a four-bedroom home (you must think of the employees that will be going with you) in their state is around $250,000, like it is in the South. And finally, ask them if they are a part of a region that has created more jobs than any other region in the U.S. every year for the last 15 years.

Lee Burlett (lee@sb-d.com)

"Project Music" Could be 2,000-Job Mega-Deal

Atlanta seems to be the focus of a site search from a company that could bring 2,000 jobs to the metro's northern suburbs. Project Music is potentially a huge deal from an unnamed company, one that could be another relocation. To date, the South has garnered more headquarter relocations from outside the region this year than any year since the early 1970s. Some of those include Fidelity, Rubbermaid, Philip Morris, Louisiana-Pacific and DHL.

Oklahoma City Recruiting Houston Labor

Bad blood must be spilling in Houston as companies in Oklahoma City are actively recruiting workers in the Texas market. Oklahoma City energy companies are successfully luring the skilled workers with attractive relocation packages, perks and promises of a better lifestyle such as 15-minute commutes as opposed to 45 minutes to an hour in Houston.

R.R. Donnelley Continues Investment in the South

R.R. Donnelley Corp. announced this summer it was relocating its corporate headquarters from New York to the Raleigh-Durham area. The publisher of yellow pages and other publications announced it would create 275 new jobs over the next three years in the Triangle. The company announced in October it is leasing nearly 250,000 square feet of industrial space in the Atlanta area.

Charlotte Airport May Build Its Own Power Plant

On the heels of the Great Northern Blackout of 2003, officials at the Charlotte/Douglas International Airport are considering building a power plant that will serve the facility exclusively. Currently, the airport has backup generators that keep critical functions operational in the event of power interruptions. Charlotte's airport encompasses 1.7 million square feet and 6,000 acres of land.

Commuter Rail for Austin?

A Texas lawmaker is proposing a commuter rail on existing rail lines in Austin to reduce that city's traffic problem. Rep. Mike Krusee (R-Taylor, Tex.), is suggesting that existing rail routes be used for a new commuter rail system that would cost about $100 million in the first phase. Voters in Austin defeated a light rail plan in 2000 that would have cost nearly $1 billion for a 20-mile section. Krusee maintains the commuter rail option is affordable for the Austin area and it could be implemented in three years.

Atlanta Stuck With Traffic

In an unusual admission, officials with the Atlanta Regional Commission say that no amount of money will be enough to reduce traffic congestion in the city for the foreseeable future. The ARC put together its "aspirations plan" in October, a list of transportation projects it would like to complete by 2030. But even with all of those projects becoming a reality, traffic will continue to be a major problem in the South's fourth-largest MSA for the next three decades. Officials with the ARC cite the fact that an estimated 2 million persons will be added to Atlanta's population by 2030.

County in Orlando MSA Defeats Sales Tax Increase

Voters in Orange County, Fla. defeated a half-cent sales tax increase that would have funded transportation improvements in the Orlando area. The sales tax increase, if approved, would have raised nearly $3 billion over 20 years. That money would have been used for a much needed widening of Interstate 4, which runs through Disney World and downtown Orlando. It would have also provided funds for new transportation projects, including mass transit.

Editorial

Mapping a Strategy for Luring Automotive Suppliers to Alabama's Rural Areas

One of the biggest Rural American South success stories in history has occurred over the last year in Alabama. More than two-dozen automotive suppliers have landed in places like Luverne, Elba, Shorter, Fort Deposit, Greenville, Oxford, Prattville, Alexander City, Enterprise and Opelika in the last year. While all of those markets are small, the interesting thing about almost all of them is they are located south of Montgomery.

For decades, Alabama's industrial core has centered in Birmingham and north to Huntsville. Gadsden, Cullman, Decatur and other markets north of Birmingham remain major industrial centers. But this new surge of industrial development south of Montgomery is something new. If anything, it didn't hurt that markets south of Montgomery complained to the Alabama Development Office for years that north Alabama had a grip on industrial development in the state. It also didn't hurt that Hyundai decided to place its assembly plant in Montgomery, geographically making it the most southern of all Southern automaker facilities (when Toyota builds its plant in San Antonio, it will take that claim).

Now more rural counties in Alabama may benefit from a new initiative. The U.S. Department of Commerce Economic Development Administration recently gave the University of Alabama $350,000 to develop a strategy to lure automotive suppliers to distressed rural counties in Alabama. To us, the strategy seems to be working pretty well. Regardless, we're sure the money will be well spent.

Lee Burlett (lee@sb-d.com)

Recovery Without Job Creation - True Almost Everywhere But Florida

In mid-October, Gov. Jeb Bush announced Florida's 18th straight month of positive job growth. In fact, from August of 2002 to August of 2003, the Sunshine State gained a positive net of nearly 100,000 new jobs. Currently, Florida's unemployment rate is about one-percentage-point below the national average.

Hapeville, Ga. Ford Plant to Build Sport Wagons

Mixed rumors surround Ford's 56-year-old, 2,300-employee assembly facility located near Atlanta. Earlier this year speculation centered on Ford closing the plant in the near future and building a new one further outside the Atlanta MSA. While that rumor swirled, Ford officials maintained there were no plans to close the old Hapeville facility. Over the summer, rumors surfaced that a new assembly plant would not be built in Georgia but rather in Mexico. Also during the summer, automotive industry analysts claimed there's no way, considering Ford's capacity problems, there will be two Ford plants operating in Georgia. Regardless, the Hapeville facility will phase out production of the Ford Taurus and Mercury Sable, two hot cars in the 1990s but no longer so. Instead, Ford officials have confirmed the Hapeville plant will build sport wagons under the Ford and Lincoln name plate beginning in 2006.

Celebration in Alabama, Disappointment in Georgia

Talk about a tale of two states. DaimlerChrysler informed Georgia officials on September 23 it would not build its Sprinter Van plant near Savannah. Exactly one week later, DaimlerChrysler and Alabama officials celebrated the automaker's 10th anniversary in the state and a $600 million expansion of its plant located between Birmingham and Tuscaloosa. While it's clear there is no connection between the two, it was cruel timing for officials in Georgia. Mercedes announced on September 30, 1993 it would build its first U.S. plant in Vance, Ala. Alabama offered $253 million to lure Mercedes. The state was highly criticized for the incentive package. Since Mercedes announced, Alabama has landed two other assembly plants and numerous other major automotive projects. Currently, $1.4 billion in annual payroll is doled out by the automotive industry in Alabama. Over 30,000 jobs have been created in the sector since 1993 and that figure is expected to increase to 40,000 within three years.

Brose Building in Vance, Ala.

Brose, a future supplier of door components to the Mercedes-Benz factory, is building a $13 million plant in Vance. The plant will employ 80 workers and is expected to open next spring in the new Legacy Industrial Park.

QUIZ

Alabama's automotive industry has earned international recognition in a short time. No state in the short, but incredibly active history of the Southern Auto Corridor has landed three assembly plants in just 10 years. But there is one other industry that's firmly plant in the Heart of Dixie that rivals the automotive industry. It is responsible for 100,000 more jobs currently than automotive in Alabama and $6 billion (that's with a "b") in annual payroll. Is that industry (a) Cotton picking and cotton processing combined; (b) Aerospace; (c) Biotechnology; (d) Biomedicine; or (e) Poultry processing?

(Scroll down for answer)

South Carolina Economic Developer Cited

Henry (Hal) Johnson III, Executive Director of the Orangeburg (S.C.) County Development Commisssion, has been named 2003 Economic Developer of the Year by the National Rural Economic Developer's Association. The honor given by NREDA, cited Johnson's outstanding achievements, individual leadership and his measurable contribution to economic development in a rural setting.

Charleston Port Sets Record

In its 300-plus history, the Port of Charleston has never been busier. Container volume through Charleston increased to more than 1.68 million TEUs for the 2003 fiscal year marking a new all-time record and an 11 percent increase over 2002. The Port of Charleston is the fourth-busiest container port in the U.S. and the second-busiest container port along the Atlantic and Gulf coast. The port is undergoing a two-year, $128 million expansion and attempting to gain approval for a new terminal on the old Charleston Naval Base.

Jaxport Sets Record

In October, officials in Jacksonville, Fla. celebrated a new national record for a vehicle handling port. During fiscal year 2002/2003, 600,000 vehicles were handled by the port. Ford, Toyota and GM are the three largest auto manufacturers that use the port for import and export.

Atlanta MSA, an Expanding Monster

The federal Office of Management and Budget has added a record eight counties to the Atlanta Metropolitan Statistical Area. Now called officially the Atlanta/Sandy Springs/Marietta, Ga. MSA, the area encompasses 28 counties, 4.5 million Southerners and 8,379 square miles. Atlanta's MSA now extends to the west all the way to Alabama border, to the north almost to Tennessee and to the east within two counties of South Carolina.

Tampa Bay Cited in Real Estate Study

Sperry Van Ness recently named Tampa as the nation's best market to buy office real estate and second-best for industrial property. Atlanta came in second in the office category and Dallas was No. 1 in the industrial real estate sector.

QUIZ ANSWER

Growing industries in the South's next great state (Florida, Georgia, North Carolina, Tennessee, Texas and Virginia have all achieved "economic development greatness" in the South to date) include biotech, automotive and financial services. But it's (b) aerospace that that is responsible for 140,000 jobs in Alabama and a $6 billion (that's with a "b") annual payroll.

 

September

Editorial

Don't Start It if You Can't Finish It!

DaimlerChrysler Decision Not to Build in Georgia Sends Up the White Flag

DaimlerChrysler's decision on September 23, 2003 to scrap a proposed Sprinter van plant in Pooler, Ga., had nothing to do with the state of Georgia itself. Nor did it involve local officials in the Savannah area, where the plant was to be built. Economic developers and political leaders in the Peach State, including Georgia Gov. Sonny Perdue and Glenn Cornell, commissioner of the Georgia Department of Industry, Trade and Tourism, did everything they were asked to do by the automaker and more to land what would have been the South's newest large auto assembly plant.

No, the reason DC officials pulled the plug on the Pooler, Ga. deal centers on the fact that its Chrysler division is pulling what was one of the world's most admired and profitable international automakers down to financial depths never before experienced. Case in point was the $1.1 billion loss that division slapped on the automaker in the second quarter of this year (Oh, to reverse Daimler's decision to envelope itself with a Big 3 automaker).

One could also place blame on the nation's current economic state for the cancellation of the plant. U.S. sales of the Sprinter van, now being manufactured in Germany and assembled in Gaffney, S.C., were expected to top 8,000 units this year after 2,000 were sold domestically last year. But only about 850 Sprinters have been sold in the U.S. so far in 2003.

But a valid argument can be made that the economy is not to blame for DC's cancellation of the project. There is no question tens of thousands of U.S. companies have held off buying commercial vans for two, maybe three years now. A lousy economy tends to dictate those types of buys, but only for so long. Eventually, companies that use commercial delivery vans, companies as large as FedEX or as small as an independent, two-man repair concern, will have to replace those vehicles and soon.

So, it's our belief, even with the poor sales seen this year, that the commercial van market will be there next year and most certainly in 2005 and 2006. It's simply a case of pent-up demand. By the way, by 2006 DaimlerChrysler would have produced tens of thousands of Sprinters at the proposed assembly plant in Pooler, Ga. Now they won't.

We strongly believe that the reason DaimlerChrysler canned the deal was because the company is struggling. And it is struggling because of its Big 3 connection that is Chrysler. DC is in a hunker-down mode. You don't expand in that environment. You cut and that's where the Savannah van plant lies now: on the cutting room floor. Not unlike the other two that make up the Big 3, DC's Chrysler division has eliminated over 30,000 jobs and closed seven plants in the last two years. More will follow.

I read with interest the recent United Auto Workers negotiations with DaimlerChrysler, GM and Ford. For the first time in decades, the Big 3 were given permission by their employees to close plants and thus benefit from the savings. There is something wrong there. When you must ask your employees -- once every four years, no less -- to save your ass, well, that's a business model that won't fly. And that's especially true when your biggest competitors, namely foreign automakers manufacturing and assembling in the South, need not ask their employees for their opinions -- or worse yet, permission -- on critical moves. Maybe that's why those folks are expanding.

As for the 1,550-acre Pooler, Ga. site that has seen $60 million in improvements over the last year or so, all paid for and spiffed-up quite nicely in good spirit by the folks of Georgia for DaimlerChrysler? Well, that patch of beautiful brown, flat dirt has now vaulted itself to the top of our Best Auto Assembly Plant Sites in the South ranking (see feature on this Web site). The site features rail, seaport, and double interstate access. Did we mention $60 million in improvements? There is no site on this planet better suited for an automaker right now than the Pooler, Ga. site.

We are quite confident that soon enough another automaker, most likely a different one from Germany, or most certainly one based in Japan, will thank DaimlerChrysler for their decision on this day not to build their proposed $750 million, 3,500-employee van assembly plant. Yes, today, September 23, 2003, a white flag was raised. That white flag was raised by the Big 3.

Mike Randle, editor
mike@sb-d.com

A Big Deal is in the Air

There's a huge deal out there and it looks as if Florida is where it's headed. Gov. Jeb Bush admitted September 19 that he may have to call lawmakers back to Tallahassee this fall for a special session to formulate an incentive package to land the project. Florida officials are especially tight-lipped, but we believe the project is one of two looking at the Sunshine State right now. The deal is either a proposed $6 billion (that's with a "b") communications satellite system designed to link armed forces worldwide that the federal government wants operational by 2008 or the relocation of Lockheed Martin Space Systems headquarters and facility, which is currently located near Denver. That facility employs over 10,000.

Ford Does About Face in St. Louis

In the summer quarter, Ford officials announced they would close their St. Louis assembly plant and move production to Louisville. Apparently, a $9 million incentive package put together by officials in Missouri has changed Ford's mind. Now it looks as if the plant has gotten a reprieve and will continue to operate for at least four more years.

University of Texas Building Biotech Site

The University of Texas has announced a new $25 million biomedical research facility at its J.J. Pickle Research Campus in North Austin. The new facility will be the home of UT's new Department of Biomedical Engineering. Five-hundred undergraduates are expected to be studying at the facility sometime in 2005.

UAB Breaks Ground on Biomedical Research Building in Birmingham

The University of Alabama Birmingham has broken ground on a 300,000-square-foot, $56 million biomedical research center in downtown Birmingham. The 12-story Shelby Interdisciplinary Biomedical Research building has been described as "UAB's Mercedes" for the potential economic impact it could bring. It's estimated that the new research facility will generate 1,400 jobs and attract hundreds of millions of dollars in research grants when completed in 2005.

LP Considering Several Southern Markets for HQ Relocation

Portland, Ore.-based Louisiana-Pacific is considering Charlotte, Nashville and Richmond as sites for a relocation of its headquarters. The company, which is a global leader in building supplies, operates six administrative offices in North America and is considering whether to consolidate them all to one site. If the company does relocate to the South, it will join several other large companies that have relocated to the South this year. Fidelity, Philip Morris, Rubbermaid, R.H. Donnelley and Asurion are just a sampling of companies that have relocated their headquarters to the South from the West, Midwest or Northeast just this year.

FedEx Chooses Hutchins, Texas

Officials with Memphis-based FedEx announced in late August the company would build a 330,000-square-foot distribution hub in Hutchins, Tex. The small city if located in southern Dallas County. The new hub is expected to employ 200 office personnel, 1,200 package handlers and about 400 independent contractors, making the deal one of the largest announced in the South this year.

Future Pipe Expanding in Gulfport

Dubai, UAE-based Future Pipe Industries announced in September it would build a much larger facility in Gulfport, Miss. than originally planned. Future Pipe announced a 40,000-square-foot facility earlier this year, however, officials with the company recently announced the construction of a 100,000-square-foot facility and a 50,000-square-foot building. The company is expected to employ 300 workers at the site.

Three More Suppliers to Nissan Announce in Mississippi

Three new Nissan suppliers, Goggin Warehousing, Waltex MS and Logistics Insights, have recently opened up shop in the Jackson, Miss. area. The three companies, which provide the Nissan plant with a variety of products and services including robotic welding, warehousing and light manufacturing, employ about 100 now, but that figure will rise as production increases at the plant.

Hyundai Supplier Picks Selma

Lear Corp. will most likely bring two tier-two supplier plants to Selma, Ala. The facilities will supply Lear's car seat plant that is a tier-one supplier to the new Hyundai plant being built in the Montgomery area.

Nordyne to Set up Shop in Tennessee

St. Louis-based HVAC manufacturer Nordyne, is signing a 15-year lease on a 385,000-square-foot manufacturing facility in Dyersburg, Tenn. The deal is expected to result in 400 new jobs by early 2004 and up to 600 by 2006.

 

August

QUIZ

The $8 billion restoration project of the Florida Everglades recently experienced a setback when the Florida Legislature passed a bill that eliminates a deadline set 10 years ago for stopping the flow of a basic element that has been polluting the glades region for decades. Gov. Jeb Bush signed the bill. This common element has already caused permanent damage to the Everglades and much of South Florida. What is the common element? (a) arsenic (b) oxygen (c) phosphorus (d) retirees (e) cream of wheat (f) sulphur (g) mercury

(Scroll down for answer)

NC Governor Appeals to President Bush

Gov. Mike Easley sent a personal appeal in August to the President asking again for help for the struggling textile industry in North Carolina. Easley sent an e-mail to the President, which included a video message from 10 former employees who had worked at Pillowtex from 10 to 25 years. In August, Pillowtex announced that it was filing for bankruptcy, closing its facilities and terminating over 6,000 employees. More than 4,000 workers were employed in North Carolina. "I wanted President Bush to hear directly from the people that are impacted by these destructive federal trade policies," said Easley. "These people have given their lives to ensuring that the 'Made in America' label is synonymous with quality and now they need our help."

Easley has written to the Bush administration on nine occasions asking that trade policies be revisited to stop the exportation of jobs overseas. Since 2001, North Carolina has lost 50,000 textile jobs due to federal trade policies. Specifically, Easley is asking that the U.S. Trade Representative do the following:

* Start aggressively combating the widespread dumping of textile goods on U.S. markets
* Address the failure of trading partners to open their markets to our products
* Devote sufficient resources to fight illegal smuggling and customs fraud
* Initiate the "special China safeguard" on sensitive textile and apparel categories to control the unfair surge of Chinese imports
* Take action to curb currency manipulation
* Withdraw from the recent trade agreement with Vietnam

Major Biotech Move Made by North Carolina

The Golden LEAF Foundation, the group formed in 1999 to use $2.3 billion of North Carolina's tobacco settlement shares, is investing $60 million to train workers in the state for work in biotechnology. The money will be given as grants to N.C. State and other colleges and universities in the state to train workers to fill jobs in various biotech fields. The motivation behind the grants is to train and retrain labor for work in drug and vaccine production and a myriad of biotechnology innovations from agriculture. Existing biotech companies in the Tar Heel State have committed another $4.5 million for the training program.

Calling the Kettle Black

Georgia Gov. Sonny Perdue recently asked state officials in neighboring South Carolina and Alabama to work with him in bringing some "sanity" to rising incentive packages set up by the three states to lure automakers. The question we'd like to pose to Gov. Perdue is this: Just when did the idea come to your mind, before you approved a $322 million incentive package for DaimlerChrysler to build a $800 million truck/van plant near Savannah, or after?

Louisiana's Wetlands are Focal Point of Big Oil

About 25 percent of the nation's energy is being threatened by the loss of natural wetlands in southern Louisiana. To give you an idea of the level of the threat, the city of New Orleans was located 52 miles from the Gulf of Mexico 100 years ago. Today New Orleans is located 21 miles from the Gulf. Wetlands lost in Louisiana each year equal about 25 square miles and big oil is concerned. Pipelines throughout southern Louisiana that were under water when originally placed are now exposed. Shell Oil is doing something about it, as they should. The wetlands being lost are home to about a quarter of the nation's fisheries. But more importantly to big oil, the risk of damage to their delivery systems is at an all time high. Storm surges from hurricanes not only have exposed New Orleans, but also the facilities that bring natural gas from the Gulf of Mexico to processing terminals. It's been estimated by the Corps of Engineers that it will cost $14 billion (that's with a "b") to save Louisiana's coastlands. We hope big oil is preparing to pony-up.

Clean Sweep for the South in Best Drivable Cities Report

In a story published in 1997, we wowed you by revealing that the South had double the population of the Northeast, yet its major markets had one-fifth the number of vehicular hours of delay compared to major markets in the Northeast. Our discovery has been supported again by another study done by Bert Sperling, who also does Money magazine's annual most livable places in the U.S. survey. The Sperling study, called America's Most Drivable Cities, ranked Southern markets exclusively in its top 10. In its bottom 10 worst drivable cities, no Southern market can be found. In the ranking, Sperling considered vehicular hours of delay, road quality, climate and gas prices. Included in the study were the 77-largest markets in the U.S.

Top 10 Drivable Cities

1. Corpus Christi
2. Brownsville
3. Beaumont
4. Pensacola
5. Fort Myers
6. Oklahoma City
7. Birmingham
8. El Paso
9. Memphis
10. Tulsa

Bottom 10 Drivable Cities

68. Washington, D.C.
69. Seattle
70. New York
71. Detroit
72. Oakland
73. Boston
74. Denver
75. Chicago
76. San Francisco
77. Los Angeles

DHL Looks to Move Headquarters to South Florida

DHL, which is close to acquiring rival Seattle-based Airborne Express, is site searching Dade, Broward and Palm Beach Counties in South Florida to build a new headquarters campus that could total 300,000 square feet and house as many as 2,000 employees. The air carrier is already moving its U.S. operations center from San Francisco to South Florida.

Asurion Relocates from California to Nashville

Another relocation from California to the South has landed in Nashville. Asurion, North America's largest provider of enhanced services for the wireless communications industry, has relocated its headquarters from San Mateo to Nashville. The deal will result in 600 new jobs in Tennessee's capital city over the next three years. The privately held company, with revenues of $250 million, serves 10 million subscribers with roadside assistance programs, handset and data device insurance programs and warranty management plans.

Port of Savannah Expansion Could Create Over 10,000 Jobs

According to state government officials, a $120 million expansion of the Port of Savannah announced by Gov. Sonny Perdue in late July could create nearly 11,000 jobs throughout the state of Georgia by 2007. The port will add 2,100 linear feet of berthing space and over 100 acres for the handling and storage of containers. When the expansion is completed in late 2005, the Port of Savannah will have 10,000 linear feet of berthing space for container ships. That will give Savannah the capacity to become one of the largest container ports on the East and Gulf coasts. Currently, Savannah is the fifth-largest container port in the U.S. Total tonnage at the port has grown to just over 4 million tons in 1994 to over 11 million tons last year. The expansion will be paid for by the Georgia Ports Authority.

Jetblue Locating Maintenance Facility at Orlando International

Officials with New York-based JetBlue Airways have decided to build a $160 million maintenance and training facility at the Orlando International Airport. The low-cost airline will locate a hanger at OIA that will house 150 workers with salaries averaging about $50,000 annually. Jetblue will receive a minimum of $3.5 million in city, county and state tax breaks.

World's Fourth-Largest Plane Maker Chooses Jacksonville

Embraer, the fourth-largest manufacturer of commercial airplanes, has chosen Cecil Field near Jacksonville for a new facility. The Brazilian aerospace concern hopes the new plant will lead to U.S. government defense contracts.

American Eurocopter Breaks Ground In Columbus, Miss.

One hundred and eighty jobs will be created by American Eurocopter in Columbus when its 100,000-square-foot, single-engine turbine helicopter plant is completed. The company broke ground on the facility in August. The company is a subsidiary of France's European Aeronautics. The company is investing $11 million in the facility.

California-Based Nanotech Company Relocates to Hattiesburg

Officials with Hybrid Plastics announced this summer the relocation of their research facilities to Hattiesburg. The company works a revolutionary new nanotechnology that improves the thermal and mechanical properties of traditional polymers. It will be moving into a new 26,000-square-foot building in the Hattiesburg/Forrest County Industrial Park. About 25 jobs will be created.

Pork Processing Plant Will Create 1,000 New Jobs

Premium Pork Allied Producers have announced a $130 million, 1,000-job hog-processing plant in St. Joseph, Mo. The plant is being built on 60 acres. Incentives of nearly $15 million were secured by Premium to build the facility.

Donnelley Moving HQ to Research Triangle

R.H. Donnelley Corp. is relocating its corporate headquarters from New York to the Raleigh-Durham area. The publisher of yellow pages and other publications announced it would create 275 new jobs over the next three years. Donnelley has a 240-employee publishing plant in Morrisville, N.C. The company is traded on the New York Stock Exchange and is one of several high-profile companies that has recently announced headquarter relocations from New York to states in the South.

RF Micro Expanding Again

Greensboro, N.C.-based RF Micro Devices is expanding its operations in the Triad once again. The chipmaker is investing $40 million to build six-inch diameter wafers that contain thousands of microchips.

Hewlett-Packard Leases 700,000 Square Feet in Memphis

California-based Hewlett-Packard has closed a deal on a 708,532-square-foot building in Memphis. The computer manufacturer will use the facility for distribution and assembly work. About 600 jobs will be created when the facility becomes operational in November.

Florida, Georgia Water Riff Going to Supreme Court

While Alabama and Georgia are close to signing an agreement on water rights to the Alabama, Coosa and Tallapoosa river basin, Florida and Georgia are taking their gripes concerning the use of water from the Apalachicola, Flint and Chattahoochee river basin to the Supreme Court. On September 3, Georgia Gov. Sonny Perdue said Florida officials are asking too much over how much water should flow from the Peach State to the Sunshine State.

EDITORIAL

Utilities are Ramping Up -- That Means One of Your Best Southern Site Searching Friends is Back

By Mike Randle

For decades, the South's utilities were the second-most powerful economic development entities at creating jobs in the region. Some folks would argue that their utilities were more powerful than their state economic development agencies at making your deal a reality during that time. Regardless, one thing is for certain: when the prospect of deregulation -- not the passing of deregulation by state lawmakers -- swept the region in the 1990s, many economic development departments of major utilities in the South were gutted, if not dismantled altogether.

Why did many of the South's utilities feel such a sense of urgency in the mid-to-late 1990s to get out of the business of treating site searchers like royalty, while never admitting or announcing that they were moving in that direction? Well, the primary reason must have centered on the assumption that under deregulation, major utilities in the South would sell their product outside of their designated territories -- or outside the state they represented -- therefore, there would no longer be allegiances to their historical territories. If that were the case, what's the utility's motivation to operate a very expensive department of economic development professionals designed to bring business to their state, when much of their product -- presumably -- would be sold out of state?

By the way, the reason utilities in the South never announced a downsizing of their economic development departments had to do with one thing: a little chance scenario where deregulation was not passed by state lawmakers in the time frame that it was supposed to pass. If you read articles on the subject and the debate surrounding it back in the mid-1990s, we were all supposed to be enjoying lower utility rates by now as a result of dereg. Uh, someone missed that deadline.

I witnessed the gutting of utility economic development departments over the years personally. I recall visiting Florida Power in 1992. There, Ed Schons showed me the first computer disc I had ever seen that was chock-full of data any site searcher would need. At the time -- pre-Internet -- it was cutting edge marketing. Schons' economic development department, I would estimate, had about 30 employees in 1992. By the end of the '90s, Schons was the only one left in the department.

The close-the-hatch mentality of utility economic development groups in the '90s wasn't exclusive to Florida Power (now Progress Energy). In fact, nearly every major utility in the South downsized their ED departments. There were some exceptions. Mississippi Power and SCANA come to mind. With dereg looming, those two continued to get their hands dirty working deals. But Southern Company cousins of Mississippi Power, such as Alabama Power and Georgia Power, reduced their departments dramatically. That's changing.

Now it's 2003 going on 2004. Interestingly, economic development departments of utilities in the South are ramping up to assist your deal like they did for decades before the prospect of dereg blew their minds. Even TVA is back in the game. The expansion of utility economic development groups is a strong indication that the prospect of deregulation has dimmed in many states in the South. That's probably a good thing for site searchers.

At any rate, it's very encouraging to see economic development departments of utilities throughout the region figure out that what they did for more than nine decades wasn't such a bad thing after all. It's also a secure feeling that the folks charged with delivering one of the most basic and important products in our daily lives -- energy -- is apparently out of entrepreneurial endeavors, something they failed at miserably in the trading sector.

QUIZ ANSWER

The Army Corp. of Engineers is responsible for rerouting water flows into the Everglades as a result of their massive projects in the 1950s and '60s aimed at reclaiming wetlands. This new "land" was bought by big agribusiness concerns for pennies and subsidized by the federal government. The element (the answer to the Quiz) spewed into the Everglades by those same big agribusiness concerns located south of Lake Okeechobee is (c) phosphorus. Editor's Note: The Everglades is the South's most sensitive environment as well as one of its most spectacular (have you ever driven Alligator Alley?). In a time when low-wage manufacturing is closing its doors like never before in the South, why would Florida's governor, Jeb Bush, give any assistance to big sugar plantations that pay below even low manufacturing scale, while polluting one of the most precious environments in the South?

 

July

QUIZ

Georgia officials are anxiously awaiting an announcement by DaimlerChrysler AG officials on whether a site near Savannah will indeed be where the massive automaker will build its next U.S. assembly plant. The proposed commercial truck facility (vehicles not purchased by individual consumers), if built, is expected to house 3,000 workers with an investment of at least $800 million. The question posed to you is, how much money has the State of Georgia and communities in the Savannah region already invested in the preparation of the site located in the town of Pooler? (a) $179 million (b) $0 (c) $60 million (d) $650,000

(Scroll down for answer)

 

Steel Plant Chooses Moss Point, Miss.

The largest steelmaker in the UK has chosen the Mississippi Gulf Coast town of Moss Point for its first U.S. plant. Corus Bi-Steel, the third-largest steel company in Europe, is building a facility to produce bi-steel, a product used in the construction, defense and security industries. The company is expected to invest $20 million in the deal and hire up to 250 workers.

Study Shows Silicon Valley Hard Hit, But Austin Hit Harder

San Jose, Calif. has made news over the last couple years as one of the hardest hit areas in the country during a two-and-a-half-year economic slowdown. But a new study shows that Silicon Valley hasn't lost as many computer and electronic products manufacturing jobs as has the Austin, Tex. area, which is known as Silicon Hills. Since mid-2000, the Silicon Valley has lost 29.3 percent of its high-tech manufacturing jobs, while Austin's Silicon Hills has lost 32.4 percent of its high-tech jobs. The study was done by Palo Alto, Calif.-based Center for Continuing Study of the California Economy. Stephen Levy, the director of the Palo Alto think tank said the study was done to point out that California's economy has suffered from a perception that it is leading the nation in lost jobs. Actually, California and Texas have led the nation in lost jobs.

Georgia Governor Meets with Audi Officials

New Georgia Gov. Sonny Perdue's first recruiting trip abroad included a meeting in Germany with officials with Audi AG. Perdue made it clear to officials with the German automaker during the two-and-a-half-hour meeting that Georgia would be an attractive location for Audi's first North American assembly plant. Rumors have been floating that several foreign automakers, including Audi, Mitsubishi, Volvo and Kia are considering building original equipment manufacturing plants in the U.S. for the first time.

Markets in the South Score Well in Job Creation Study

The Milken Institute's Best Performing Cities Index, which was published recently, measures job creation in U.S. metros. This year's ranking showed that Fayetteville/Rogers/Springdale, Arkansas is the No. 1 market per capita in job creation in the U.S. Other markets in the South making the top 10 in job generation include Fort Myers, Palm Beach and the Texas/Mexico border markets of Laredo, Brownsville and McAllen, Tex. Outside the South, Las Vegas, San Diego, San Luis Obispo and Monmouth, N.J. cracked the top 10 metros in job creation.

Biggest Automotive Deal in Arkansas History Announced

Arkansas isn't home to an automotive assembly plant ... yet. Furthermore, the Razorback State trails neighboring Tennessee by light years in the number of automotive suppliers operating shops. But if a deal announced in mid-July is any indication that the automotive industry has discovered Arkansas, then Tennessee officials need to take note. DENSO Corp., the world's third-largest automotive parts maker, a company that knows Tennessee very well because of its plants there, has crossed the Mississippi River into Arkansas for its latest venture. DENSO announced it is building a $35 million, 225,000-square-foot facility in Osceola, which is located in the Mississippi Delta region north of Memphis. The company is expected to hire 500 new workers at the plant where heavy-duty radiators and air conditioners will be manufactured. Like many Japan-based automotive concerns, the deal announced is most likely a conservative one. Expect the job total to double when the plant is fully operational in a few years.

Toyota Expanding Alabama Engine Plant

Like Honda, Nissan and other Japanese automotive deals done in the South over the years, Toyota has announced it is expanding its Huntsville, Ala. engine plant just after the paint has dried on its new facility. The expansion will add over 400,000 square feet to the existing plant, which just recently opened. Toyota will invest $20 million in the deal and add 150 workers. The massive Japanese automaker announced in the spring another engine plant in Jackson, Tenn. If history repeats itself, expect that facility to expand right after it opens two years from now.

Half of Forbes 10 Best Places for Business in the South

Today, the cost of doing business has charged to the top of most site selection factor lists. The editors of Forbes have noticed. Their recently published annual ranking of the nation's Best Places for Business and Careers added the cost of labor, energy, taxes and office space into the ranking's methodology. Additionally for the first time ever, the ranking factored in crime rates, housing costs and net migration. Needless to say, with that methodology being used, many Southern markets fared well. Austin, Raleigh-Durham, Atlanta, Dallas and the D.C./Northern Virginia region all made Forbes top 10 best places for business. Outside the region, Boise, Madison, Wis., Provo, Omaha and Des Moines made Forbes top 10.

Alabama, Mississippi Band Together

In an unprecedented partnership announced in July, Alabama Gov. Bob Riley and Mississippi Gov. Ronnie Musgrove signed an agreement to market the border between the two states to expanding and locating industry. During the signing ceremony, Gov. Musgrove said that the agreement will change the way economic development is practiced "in the South and in America." The two states have been in the running for several automotive assembly plants in the last several years. In fact, of the last five new auto assembly plants announced in the U.S., Alabama and Mississippi have landed three of them. It is believed by many in the economic development profession that the partnership between the two states is the first of its kind in U.S. history.

TI Building $3 Billion Chip Plant

Texas Instruments (TI) announced it is building a $3 billion chip factory in Richardson, which is located near the University of Texas at Dallas (UTD). The plant will house over 1,000 workers. The deal is the first big one turned since Texas legislators passed two critical economic development bills in June, including one that sets aside $295 million to recruit selected large projects to the state. Texas Gov. Rick Perry is sending $50 million to UTD for research that will compliment the new Texas Instrument facility. Officials with Dallas-based TI insisted that the funding would have to be made for the Dallas area to secure the high-tech plant, the first new semiconductor facility to announce in the South since 1996. Texas Instruments operates chip plants in Europe, Asia as well as Texas.

Two Small Southern Markets Top U.S. in Unemployment Rate Improvements

Florence, Ala., located in the northwest corner of the state and Rock Mount, N.C. located east of Interstate 95, are No. 1 and No. 2 respectively in unemployment rate decreases over the last year. Recent numbers produced by the Bureau of Labor Statistics show that Rocky Mount reduced its unemployment rate by 2.1 percentage points from May 2002 to May 2003 and Florence led all markets in the U.S. during that time with a 2.4 percent reduction.

FedEx Ground Building Hub in Maryland

As part of Memphis-based FedEx's nearly $2 billion expansion strategy, Hagerstown, Md. has been chosen for a 335,000-square-foot ground distribution center. FedEx officials announced that the Maryland ground distribution hub is the first of 10 it plans to build in the U.S. over the next six years. The rest of FedEx's Ground division growth strategy consists of the expansion or relocation of more than 300 pickup and delivery terminals and the expansion of 23 existing ground hubs.

California Pharma Relocates HQ to Oklahoma

Norman, Okla. is an unlikely location for a pharmaceutical relocation from Palo Alto, Calif. Regardless, Norman is exactly where Yamanouchi Pharma Technologies is setting up shop in a new 60,000-square-foot research, development and headquarters facility near the University of Oklahoma. The company is investing $40 million and bringing 200 new jobs to the Norman area.

Power Costs in Kentucky, West Virginia Lowest in U.S.

The U.S. Department of Energy released its annual ranking of energy costs and it showed that Kentucky has the lowest costs of electric power in the U.S. Kentucky's average cost of electricity is just over 3 cents per kilowatt-hour. The national average is 5.04 cents per kilowatt-hour. West Virginia followed Kentucky as the Southern state with the second-lowest electric power costs.

Texas, Florida Top California in Housing Starts

From July of 2001 to July of 2002, Texas and Florida were the top two states in the country in new housing starts. Both states topped California, even though that state has a much larger population. Texas led all state with 149,208 new homes built and Florida followed close behind with 147,377. California came in third with 130,779 with Georgia (87,909) and North Carolina (76,480) rounding out the top five.

QUIZ ANSWER

Various entities in the State of Georgia have invested $60 million (c) in the preparation of the Pooler, Ga. site for DaimlerChryler's proposed Sprinter Van assembly plant. However, to date no announcement has been made on whether the automaker will go ahead with plans on the plant.


June

Nissan Expands in Tennessee

Nissan North America Senior Vice President Emil Hassan announced on June 25 that the Japanese automotive giant is expanding its Smyrna, Tenn. assembly plant and its engine facility in Decherd, Tenn. The $250 million expansion will create 1,500 additional jobs.

The expansion of the 22-year-old plant in Smyrna will allow Nissan to produce the popular Pathfinder sport utility vehicle in Tennessee. The Pathfinder will be added to Smyrna's lineup beginning in the fall of 2004. Already in production at the facility are the Nissan Maxima, Xterra, Altima and Frontier pickup truck.

Just last week, The Harbour Group, a Michigan-based consulting firm, rated Nissan's Smyrna plant the most productive automotive manufacturing facility in North America.

More than 950 automotive-related businesses employ over 150,000 Tennesseans, representing 33 percent of the state's manufacturing work force. Tennessee's automotive industry annual payroll is estimated at more than $6.3 billion.

Northrop Grumman Adding 2,000 Workers in Mississippi

Northrop Grumman officials announced on June 9 that its Ship Systems division is converting a plant on the Mississippi Gulf Coast into the nation's first advanced composite manufacturing facility for U.S. Navy and Coast Guard ships. The company is expected to hire up to 2,000 workers who will begin work on San Antonio Class amphibious transport dock ships that are being built in Pascagoula, Miss. and New Orleans.

Nissan's Newest Plant Opens in Canton, Miss.

Nissan Motor Co. held an enthusiastic official opening of its Canton, Miss. auto plant on May 27. The 3.5 million-square-foot facility is Nissan's first new assembly plant in 20 years. At full production, which is expected to be next year, the facility will house over 5,000 workers and produce 400,000 vehicles a year.

Texas Reorganizes Economic Development Efforts

On June 1 Texas legislators passed two new economic development bills that will move state economic development efforts from the former Texas Department of Economic Development to an agency under Gov. Rick Perry's control. Senate Bill 1771 sets up the Texas Enterprise Fund for economic development. House Bill 7 also passed. That bill allocates $295 million from the state's rainy day fund for economic development in the state.

Five Southern Markets Make Forbes "Best Places for Business" Top 10

In a recent edition the editors of Forbes ranked their best places for business. This year's annual ranking placed more emphasis on the cost of doing business. Five Southern markets made the magazine's top 10 best places for business. They were Austin (No. 1); Raleigh-Durham (3); Atlanta (4); Dallas (9); and Washington/Northern Virginia (10).


May

Citibank to Stay, Expand in Jacksonville

Officials with Citibank have decided to stay in Jacksonville and nix a move to Birmingham. The financial services giant will invest $90 million on Jacksonville's Southside for a new credit card operation and technology center. Citibank will add at least 400 jobs to its current workforce of 3,400 in Jacksonville. Plans call for 500,000 square feet of office space to be constructed during the expansion.

Thirteen Power Plant Projects Delayed in Texas, 11 Cancelled

Texas, which deregulated its electric power industry last year, is facing an oversupply of electric power. The problem of oversupply in Texas is so extreme that 13 new power plants, which were already scheduled to break ground, have been delayed. The surplus of power has also cancelled the development of 11 other power plants. Since 1995, electric generation is Texas has increased by 22,000 megawatts. The oversupply of power has led to environmental groups leading the charge to shut down older power plants that pollute the most. State officials project the Texas wholesale power market won't return to normal levels until 2007.

Toyota Eyeing Texas' Air Quality Situation Carefully

In the winter quarter, Toyota officials announced a $750 million, 2,000-employee pickup truck assembly plant in San Antonio. Not unlike recent deals made by Honda, Nissan and Hyundai in the South, the Toyota plant will likely grow to $2 billion in investment and 4,000 jobs prior to opening in 2006. But there's a threat to that expansion and others like it in the Lone Star State if funding to a Texas Emissions Reduction Plan isn't carried out. Texas officials say they must come up with $375 million in funding for TERP to appease the Environmental Protection Agency. The EPA has made it clear that Texas will fall out of federal compliance by 2007 if it does not fund TERP properly. A state legislative proposal that proponents say could help San Antonio and other markets in Texas remain in compliance with federal clean air laws passed the Texas House in May. The proposal, which includes a $225 first-time vehicle registration fee, may or may not be unconstitutional. And even if it is deemed constitutional, it might not raise enough cash to fund TERP to levels that would meet EPA approval. Toyota officials are watching the situation carefully. Officials with the automaker have said that one of the key reasons San Antonio was chosen was the fact that the Alamo City was in attainment with federal clean air standards. Those same officials said recently, though, that if San Antonio fails to remain in attainment, it will concern them greatly. If Texas fails to remain in attainment by 2007, the EPA would slam the state by freezing federal highway funds and putting in place pollution caps. Those caps would stop all new manufacturing expansions in areas of the state that reach non-attainment status.

Mobility Study Ranks South's Most Congested Urban Markets

According to its latest Urban Mobility Study, the Texas Transportation Institute says the South's roadways are getting more congested. The study maintains that the time penalty for making "rush hours" trips is greater and that the period of time that travelers might encounter traffic congestion is longer. The study also showed that the number of streets and freeways in the South that are congested is higher. The following are the most and least congested Southern metros based on annual hours of vehicular delay.

Most Congested Markets in the South

Market *Hours

1. Wash. D.C./MD/VA 84
2. Houston 75
3. Dallas/Ft. Worth 74
4. Atlanta 70
5. Miami 69
6. Orlando 66
7. Austin 61
Ft. Lauderdale 61
9. Baltimore 50
10. Charlotte 47

Source: Texas Transportation Institute. *Based on annual vehicular hours of delay.

Least Congested Markets in the South

Market *Hours

1. Brownsville 5
2. Laredo 6
Corpus Christi 6
4. Oklahoma City 12
Beaumont 12
6. Fort Myers 16
7. Tulsa 19
8. Kansas City 19
9. El Paso 21
10. Richmond 22

Source: Texas Transportation Institute. *Based on annual vehicular hours of delay.

Crime Rate at 30-Year Low in Florida

Crime is increasing in most states in the U.S. That's natural. It usually does in a struggling economy. But crime is not increasing in the Sunshine State. In fact, the index crime rate, which is based on murder, robbery, assault, burglary, larceny, auto theft and forcible sex declined by 3.3 percent in 2002 to a rate that hasn't been matched in 30 years. Is it a coincidence that the state's crime rate is bucking the trend and dropping when Florida is the only state in the nation that has seen 11 straight months of positive job growth?

New York Life Picks Atlanta

New York Life has selected Atlanta for a new corporate data center. The mutual insurance company based in New York City, looked at Charlotte and Dallas before selecting metro Atlanta. The insurance carrier is moving into a 95,000-square-foot facility that was designed to be a BellSouth Entertainment data center. New York Life will increase the size to 135,000 square feet. The company is investing $100 million in the project and will employ 140.

Boeing Relocating Division to St. Louis

St. Louis is the new home of Boeing's Future Combat Systems division. The move from California will include some relocated positions as well as new hires in St. Louis. Boeing officials said the new headquarters of the division will house 500 employees. The Future Combat Systems division is digitizing the Army's ground forces.

Atlanta Breaks Out Big Guns in Bid for HQ

Atlanta officials revealed in early May a high-powered collection of governmental, academic, business and diplomatic leaders that will make up Hemisphere Inc., a non-profit whose sole goal is to land the headquarters of the secretariat of the Free Trade Agreement of the Americas. Already with $2 million behind the effort and the promise of more if needed, Hemisphere Inc. will now turn its attention to leaders in Latin America. Members of the group include Gov. Sonny Perdue, Atlanta Mayor Shirley Franklin, as well as board members representing Delta Air Lines, BellSouth, UPS, Coca-Cola and other corporate giants headquartered in Atlanta. The proposed free trade region will run from Chile to Canada including every country except for Cuba. Miami, which might be the front-runner in the quest for the headquarters, formed its group two years ago. Other markets pursuing the FTAA HQ include Mexico City, Panama City, and the Port of Spain in Trinidad and Tobago. Reports from throughout the region say that a free-trade agreement among all countries won't be hammered out until at least 2007.

Big Automotive Supplier Network Expected to Form in Texas

With no existing supplier network to speak of, the San Antonio/Austin, Tex. regional economies are expected to benefit in the next few years from up to 100 new automotive suppliers as a result of Toyota's decision in the winter to build an $800 million vehicle plant near San Antonio. Few if any existing suppliers located in automotive states in the South such as Alabama, Tennessee, Kentucky or Mississippi will be able to supply the Toyota plant because of San Antonio's far western location in the Southern Automotive Corridor. Which is exactly why the San Antonio choice by Toyota was a curious one. We've heard that more than one large automotive supplier was upset that Toyota officials chose Texas. It means that suppliers will be unable to serve the facility by simply expanding existing operations in the central South. They will be forced to spend hundreds of millions of dollars collectively on new facilities in South Texas. In a related story, we received information in early May that Ford was scouting sites in South Texas for a new assembly plant. Could it be that Toyota officials eased supplier concerns by explaining to them that it's not just Toyota you'll be supplying by building in Texas, but two or three more assembly plants?

DaimlerChrysler Incentives Top $300 Million

It's been awhile since a new automotive plant has received $300 million in incentives, but that's what Georgia gave up to lure DaimlerChrysler to a site near Savannah. Counting state and local tax exemptions, reduced rates for use of the Port of Savannah, roads, rail and other infrastructure, a museum on site, the purchase price of the site itself, free English language classes for German execs, their spouses and children and a critical $70 million in upfront incentives and bonuses and the total comes to $322 million that DaimlerChrysler will ultimately receive to build its Sprinter van plant in Pooler, Ga. The total comes to about $80,000 per job of the 4,000 to be hired at the plant. Interestingly enough, South Carolina was willing to offer more for the plant. Their incentive proposal totaled $346 million, however, it did not include the site or upfront cash and tax exemptions. Site work on the DaimlerChrysler plant is expected to begin this summer.

No Takers Yet for NC's New Incentives

For years many economic development officials in North Carolina complained about the vanilla incentive programs that were available for new and expanding industry in the state. They pointed to major projects lost such as Mercedes to Alabama 10 years ago and Eli Lilly to Virginia last year as proof the Tar Heel State's incentives weren't competitive. In response, Gov. Mike Easley passed the North Carolina Economic Stimulus and Job Creation Act. The new incentive plan, which became law in the fall of 2002, was hailed throughout the state's economic development community. The main part of the plan gives back qualifying new or expanding companies much of their state withholding taxes. In fact, up to $120 million has been set aside this year alone for the new incentive plan. Yet, to date, no companies have applied for the new incentives. You can bet, however, that when the economy changes for the better, those applications will be rolling in.

Alabama and Florida Luring Lockheed

Reports from Denver confirm that economic development representatives from Alabama and Florida have talked to Lockheed Martin officials about relocating their aerospace operations in Colorado to one of the states. Both Alabama and Florida have promised large tax breaks, lower operational costs and cash grants if the company relocated. It's unclear whether Lockheed Martin contacted the two states, but it's likely considering Alabama and Florida have proposals on the table at the same time. Lockheed Martin Space Systems is one of Colorado's largest employers and is headquartered in Denver. The company designs, develops, tests, manufactures and operates a variety of advanced technology systems for military, civil and commercial customers. Primary products include space launch systems, communications satellites, missile systems and interplanetary spacecraft. Lockheed Martin's astronautics operations are located in Huntsville, Ala. and Cape Canaveral Air Force Station, Fla.

Samsung Upgrades Semiconductor Plant with $500M Investment

Samsung is spending $500 million to upgrade its existing semiconductor facility in Austin, Tex. The project will add 40,000 square feet of clean room space and the facility will be updated from 130-nanometer to 90-nanometer technology. Samsung employs 950 workers at its Austin facility. The expansion is expected to create 300 new jobs. It's the first major expansion of a semiconductor plant in the South in five years.

Infonxx Adding 2,000 Jobs in San Antonio

A Pennsylvania-based call center operation is adding 2,000 jobs in San Antonio. Infonxx, a directory-assistance call center operation that provides advanced information services has secured 25,000 square feet of space near where it occupies 17,500 square feet of space in the Alamo City. The company currently employs 500 in the Texas market.

Boeing Moving All of Delta Work to Alabama

Boeing Integrated Defense Systems is closing its Pueblo, Colo., Delta launch missile facility and moving all assembly operations to its plant in Alabama. Called the "rocket ranch" by Boeing officials, the three-year-old missile assembly facility in Decatur is located on the Tennessee River in north Alabama. The move is one of consolidation and will include the relocation of almost 200 Pueblo-based workers to Decatur. Boeing tests and assembles the Delta IV rocket in Decatur.

Kansas Approves $500 Million for Boeing

In what is most likely the largest incentive package offered a company in economic development history, the Kansas Senate and House overwhelmingly approved in May $500 million in state backed bonds to help Boeing create jobs at its huge plant in Wichita. Boeing officials have said they will use the money to pay for research and development and for tooling the facility for new components of the new 7E7. Officials in Puget Sound, where all of Boeing's final assembly plants are located, are worried Boeing will use the incentives to prepare the Wichita facility as the final assembly site for the 7E7. The 7E7 work would create 4,000 new jobs at the Wichita plant. Under the incentive proposal, income tax on the 4,000 new Boeing workers making $50,000 or more a year would be withheld for 20 years, a total of $200 million. That would pay more than half the interest on the bonds. Boeing is responsible for paying the remaining interest.

Michelin Investing $200M in Ardmore, Okla. Tire Plant

Michelin North America is adding 45 new employees and spending $200 million at its tire plant in Ardmore, Okla. The South Carolina-based tire manufacturer took advantage of a new incentives package passed by the state in 2002 that is directed at tire makers. Michelin will expand the size of the plant and add production capacity.

Verizon Hiring 1,000 in Rutherford County, Tenn.

Verizon Wireless announced it is opening a 160,000-square-foot call center in Murfreesboro that will house 1,000 workers. The telecommunications company signed a 10-year lease on a building in this city located southeast of Nashville. The center will open for business in October.


April

QUIZ

The year before Mercedes-Benz announced a new assembly plant in Alabama in 1993, the state saw less than $20 million in automotive manufacturing-related investments. Now, 10 years later, automotive manufacturing investment has improved in the state. How much did automotive industries invest in Alabama in 2002? (a) $156 million (b) $2.1 billion (c) $912 million (d) $561 million

(Scroll down for answer)

Tennessee Gov. Bredesen Welcomes Toyota to Tennessee

In the administration's first major economic development announcement, Tennessee Gov. Phil Bredesen and state Economic and Community Development Commissioner Matthew Kisber unveiled plans for Toyota to build a state-of-the-art engine block plant in Jackson, Tenn. The new $124 million facility will be located in the Jackson/Madison County Airport Industrial Park and is expected to generate approximately 200 new jobs. The plant will begin production in late 2005.

"We are pleased to have the opportunity to expand our business in Tennessee," said Dennis Cuneo, senior vice president of Toyota Motor Manufacturing North America, Inc. "As Toyota grows its manufacturing operations in North America, this plant will be a vital element in our expanding engine assembly."


There's not a lot of talk on the street as of yet, however, it looks, sounds and smells as if another major automotive assembly plant is on the horizon for the South

By Lee Burlett

We are working on the spring edition and one feature we have coming to you are profiles on what we believe are the South's best automotive assembly plant sites. Doing the research on these profiles has been tough considering the fact that Alabama, Georgia, Mississippi and Tennessee officials have been reluctant to offer information on prospective automotive assembly plant sites. Why? They have gladly offered similar information on specific sites in the past. Something must be up.

And now we find out that Toyota has announced it will build another engine plant in the central South (see above) when it already has one in Huntsville. Huntsville and Jackson, Tenn. are both about 700 miles from Toyota's newly announced assembly plant in San Antonio and only about 125 miles from each other. Certainly the Huntsville and Jackson engine plants are not going to supply the San Antonio pickup truck plant. So, Toyota's choice of Jackson for an engine plant is very curious.

And then, on April 2, we get news that East Mississippi and West Alabama officials are joining forces to attract major economic development projects, such as original equipment manufacturers, like, say an automotive assembly plant. Both of those areas are rural regions of the states. It is unprecedented that two states would work together like that unless they have their sights set on another automotive facility. Could Toyota be planning another assembly plant in the central South in Alabama, Georgia, Mississippi or Tennessee on the heels of the San Antonio announcement in February? Stay tuned.

Nation's First Major Desalination Plant Opens in Tampa Bay

The nation's first seawater desalination plant built to be a primary source of drinking water is now providing water to homes and businesses in the Tampa Bay area. At full output the plant provides 25 million gallons of water a day or 10 percent of the area's drinking water. The plant is located on Tampa Bay.

Here's a Blockbuster: Ford Site Searching in South Texas

By Mike Randle

On the heels of Toyota's announcement made in February that it would build a pickup truck plant in San Antonio, Ford officials have been sighted in South Texas during the weeks of April 7 and April 14. Confirmation that officials representing Ford had indeed searched sites in South Texas was made by me personally on April 15th. The information I received was unusual in that it provided much more than we ever could have imagined from an initial site search. From what we gathered, Ford is looking to build a pickup truck plant in South Texas that would include union participation. We also gathered information that if the the automaker opened a plant in Texas, they would pay wages that are about half that of what the company pays on average in Michigan, or about $18 an hour.

This blockbuster batch of information we received this week makes perfect sense. During Toyota's site search, we questioned the choice of San Antonio for the simple fact that no automotive supplier network exists in South Texas. In other words, suppliers would be forced to spend hundreds of millions of dollars to set up shop just to service a single OEM facility. That's why we thought the Marion, Arkansas site, Toyota's apparent second choice, was a better location simply because it was close enough to tap into a large, existing supplier network located in Tennessee, Kentucky, Alabama and Mississippi. The Marion site would also save Toyota up to $200 million over the course of 10 years in logistics.

But Toyota officials must have known something we didn't know. Most likely they won over the suppliers with an argument that centered on something like this: "You won't be servicing just our plant. You'll be supplying three or four new plants." How else could they rationalize the choice of San Antonio to their suppliers? They knew other automakers would follow. But a domestic automaker? Now that's a lightening bolt from left field. No, make that a screaming meme from the back forty!

If Ford, or any domestic automaker builds a new plant in the American South it would be the first in over 30 years, outside of the Saturn plant built by GM in Spring Hill, Tenn., in the 1980s. But the mere fact that Ford is looking in the South is big, big news. Because if Ford did build a pickup truck plant in Texas, GM and most likely Chrylser would quickly follow suit. And, once built, if those pickup truck plants showed profits and productivity -- which they would -- that greatly exceeded their existing plants in the Midwest, how long would it take for the domestics to relocate their car plants to the South?

Let's put this first tidbit of information regarding Ford's site searching in the American South in perspective. If a domestic automaker locates an assembly plant in the American South, it will be the beginning of the end of the automotive industry in the Midwest as we know it today. If it occurred, it would be one of the most significant stories in the history of American business, commerce and industry. That's how big the story would be.

Big Deal Sniffing in the Central South

A factory that could bring 2,000 jobs and $1 billion in investment is on the verge of siting in the central South. Without doubt it's another automotive assembly plant and we believe it to be a Japanese automaker. The latest visit by officials of the unknown automaker was made in Meriwether County, Ga., during the week of April 7. Representatives of the company gave a look at a 1,900-acre greenfield site near I-85 in Meriwether County. The site is located just across the county line from the Coweta County city of Grantville. Word on the street has it that Georgia has one other site in the running for the facility and Alabama, Tennessee, Mississippi and Arkansas are in the running for the plant as well.

Two More Auto Suppliers Choose Alabama

Fort Deposit and Opelika, Ala. are the latest small markets in the state benefiting from the automotive industry. Mando Corp., a Hyundai supplier, will announced in April it will build a $30 million brake, steering and suspension system plant in Opelika that will employ 150 workers. Sejong Industrial and Arvin Meritor announced they will build a $10 million facility in Fort Deposit that will manufacture exhaust systems and mufflers for Hyundai. Hyundai is currently constructing a $1 billion assembly plant just south of Montgomery, Ala. that will make SUVs and sedans in 2005.

Worldcom Becomes MCI. Clinton, Miss., Loses HQ to Northern Virginia

Worldcom, the Mississippi born and bred telecommunications giant that declared bankruptcy after it revealed over $11 billion in acounting errors, is moving its Clinton, Mississippi-based headquarters to Ashburn, Va., which is the headquarters of the MCI Group. Already 4,000 MCI employees work at the Northern Virginia location. MCI will keep about 700 employees at the Clinton complex, down from about 2,800 a few years ago. The three-building Clinton complex includes 84 acres and 420,000 square feet of office space. The remaining employees will consolidate to one of the three buildings, fueling speculation that MCI will sell or lease the other two large offices.

QUIZ ANSWER

Alabama's automotive industry investments did indeed improve in 2002. Ten years after securing its first assembly plant, Alabama's automotive industry investments have risen from $20 million in 1992 to (b) $2.139 billion (that's with a "b") in 2002. The figure represents 67.6 percent of all manufacturing investments made in the state in 2002.