The Southern Auto Corridor: It's all the Rage
By Mike Randle
The Southern Auto Corridor is a phrase that has been used
almost every year over the last 10 years by CNN, USA Today,
The Wall Street Journal, Forbes, Fortune, BusinessWeek and
The New York Times, among other major media outlets in various
reports on the South and its remarkable rise in automobile
and truck vehicle production. Every time a major automaker
makes a major move in the South, "the Southern Auto Corridor"
is where media reports the move was made. The phrase did not
exist 20 years ago.
Not unlike the Silicon Valley or Silicon Hills and Biotech
Beach and Biotech Bay, the Southern Auto Corridor is a relatively
new industrial phenomenon. Furthermore, not unlike Wall Street,
the Research Triangle, the Space Coast, the Rust Belt, the
Sunbelt, or simply "Detroit," the Southern Auto
Corridor has become an economic icon that will remain intact
in some way, shape or form for 100 years if not many, many
decades longer. Fact is, the Southern Auto Corridor represents
an irreversible, sustainable and high-end manufacturing region.
It represents strength.
All of the aforementioned great brands of regional commerce
have been the rage at one time or another. In today's economy,
the Southern Auto Corridor not only dominates the previously
mentioned, well earned, easily identifiable economic brands
in the national and international media, it is currently the
No. 1 single industry rage among growing regional economies.
And that newly earned crown is especially true when compared
If anything, the Southern Auto Corridor is an absurdity of
the current American manufacturing condition. While other
manufacturing sectors are shuttering their doors throughout
the U.S. in droves, automotive manufacturers are setting monthly,
quarterly and annual single industry records by opening door
after door of new and refurbished buildings throughout the
You could even call the automotive rage in the Southern Auto
Corridor America's new industrial revolution. I mean, how
could the South, which held mere satellite, afterthought factories
for the domestic automotive industry for 75 years, surge past
"Detroit," home of the world's automotive industry,
in any measure in just 20 years? The answer to that question
can be explained in nine words: Japanese automakers, German
automakers, Korean automakers and domestic automakers.
Yes, foreign automakers have forced the Big Three -- Ford,
General Motors and Chrysler -- the biggest of the big American
industrial machines, to re-think their manufacturing strategies.
Because foreign automakers have chosen the South for almost
all of their U.S. plants in the past 20 years, that re-thinking
is the certain, absolute proof that the Southern Auto Corridor
is all the rage. If you can get the largest industry in the
world to re-think its entire business strategy, then you have
earned the highest honor in the industrial recruitment game.
In short, the Southern Auto Corridor has grown some very large
cohoneys. Think of it as the "rage against the machine,"
not the great, disbanded rock band, but the still great, yet
struggling industrial machine that is Detroit.
While "Detroit," or more accurately, the Midwestern
Auto Corridor, continues to wear the automotive production
crown in the first few years of the new millennium, the Southern
Auto Corridor is making huge strides against the machine.
In fact, over the last couple of years the Southern Auto Corridor
has made its mark. Activity among automakers in the region
in the form of job creation has more than doubled similar
activity in the Midwest. The amount of money poured into the
South by automakers over the last two years doesn't quite
add up to double what was spent by automakers in the Midwest,
but it's close (you can blame DaimlerChrysler's curious back
out in Georgia for not reaching that level). Here are the
details of automaker activities in both regions from Fall
of 2001 to Fall of 2003.
Auto Assembly Plant Activity in the South from Fall 2001
to Fall 2003
* Fall 2001: Ford announces it's investing $375M to expand
Norfolk, Va. plant.
* Fall 2001: GM completes $700 million retooling of Oklahoma
City assembly plant and begins production of GMC Envoys and
* Fall 2001: As part of a $1 billion expansion, Nissan announces
it is moving its Maxima line from Japan to its existing plant
in Smyrna, Tenn.
* Fall 2001: Honda begins production at new plant in Lincoln,
* Winter 2001: Honda announces it is expanding its Lincoln,
Ala. plant one month after opening it, adding 800 new jobs.
* Spring 2002: Korean automaker Hyundai announces it will
build a new $1 billion, 2000-employee assembly plant south
of Montgomery, Ala.
* Summer 2002: Carlos Ghosn, president of Nissan, announces
the company is investing an additional $500 million to expand
its unfinished facility in Canton, Miss. The expansion will
result in 1,300 additional jobs.
* Summer 2002: Honda announces it is doubling production
at its Lincoln, Ala. plant, investing an additional $400 million
and adding 2,000 new jobs.
* Fall 2002: BMW announces a $500 million upgrade of its
assembly plant in Greer, S.C. that will add 400 new jobs.
* Fall 2002: GM announces it is investing $500 million to
retool its Kansas City, Kan. facility to build Malibus.
* Winter 2002/2003: Ford Motor announces it is spending $50
million to expand its Louisville truck plant.
* Winter 2002/2003: Ford announces it will retool its Kansas
City-area plant in Claymoco, Mo. to build multiple models.
Investment is estimated to be at least $200 million.
* Winter 2002/2003: Rumored to close, GM pumps $150 million
into its Doraville, Ga. plant to build minivans.
* Winter 2002/2003: Toyota chooses San Antonio, Tex. area
for $800 million pickup truck plant.
* Winter 2002/2003: DaimlerChrysler announces it will build
a $750 million van plant in Pooler, Ga.
* Spring 2003: Toyota announces it will build a $124 million
engine block plant in Jackson, Tenn.
* Spring 2003: Toyota officials announce the company is investing
$25 million in the expansion of its newly opened engine plant
in Huntsville, Ala.
* Summer 2003: Nissan announces it is moving production of
the Pathfinder model from Japan to its plant in Smyrna, Tenn.,
investing $250 million more in the 20-year-old facility and
adding 1,500 jobs.
* Fall 2003: DaimlerChrysler backs out of van plant in Pooler,
* Fall 2003: General Motors officially dedicates the $500
million expansion of its plant in Shreveport, La. that is
producing Chevrolet Colorado and GMC Canyon pickup trucks.
Total Investment by automakers in the South over the last
two years: $5.874 billion (that's with a "b") not
counting GM's $1.2 billion capital expenditure in Shreveport
and Oklahoma City, which were deals announced prior to Fall
2001 and DaimlerChrysler's Georgia backout.
Auto Assembly Plant Activity in the Midwest from Fall
2001 to Fall 2003
* Summer 2002: Ford and Mazda announce a $644 million, 1,400
job expansion of their Flat Rock, Mich. facility to produce
Mazda6 sport sedans.
* Summer 2002: GM invests $500 million to expand its Lordstown,
* Fall 2002: GM announces $300 million expansion of its Orion,
Mich. plant to build the Pontiac Grand Am
* Fall 2002: DaimlerChrysler adding 1,000 jobs and spending
$35 million at Detroit pickup truck facility.
* Winter 2002/2003: Toyota announces it is adding 400 workers
at its Gibson County, Ind. facility that makes Sequoia and
Tundra trucks. The facility recently went through an $800
* Winter 2002/2003: Ford announces another $644 million expansion
of its Flat Rock, Mich. facility to build Mustangs.
* Fall 2003: Ford announces it is spending $325 million to
expand plants in Livonia, Mich. and Sharonville, Ohio. No
additional jobs are expected to be created in the expansion.
Total Investment by automakers in the Midwest over the last
two years: $3.248 billion.
Auto Assembly Plant Activity in the South Isn't the Half
It's clear that the South is the rage right now when it comes
to auto assembly in the U.S. That activity is likely to increase
in coming years. Simply put, domestic automakers hold too
much production capacity. That has meant the announcement
of plant closures from domestic automakers. Domestic plants
populate the Midwestern Automotive Corridor in great numbers.
They do not in the South. And to date none of the domestic
automakers have closed plants located in the South. On the
contrary, they have expanded them.
On the other hand, foreign automakers have added great capacity
in the U.S. in the last few years. Furthermore, all new foreign
assembly plants built in the U.S. in the last two decades
have been built in the Southern Auto Corridor. It's very unlikely
the Midwestern Auto Corridor will see another foreign auto
plant in the near future or ever. But the South will land
many more foreign auto assembly plants in years to come.
Yep, it's clear that new and expanded assembly plants are
driving the Southern Auto Corridor and winning the assembly
plant war with the Midwestern Auto Corridor. But riding shotgun,
if not taking its turn at the wheel from time to time, are
parts suppliers from all over the world. And those suppliers
are spread from West Texas, throughout the spine of the Southern
Auto Corridor all the way up to Northern Virginia.
A Record Number of Deals Coming From a Single Industry
in the South
Southern Business & Development magazine (www.sb-d.com),
the developer and owner of this Web site, has recorded every
significant capital investment and job deal announced in the
South since it published its first issue in 1992. In the 12
years it has recorded those deals, in no year has 85 significant
deals come from a single industry. We define significant somewhat
loosely, but it hovers around 100 jobs and about $30 million
But in calendar year 2003, that's exactly how many significant
deals came from the automotive industry in the Southern Auto
Corridor. Furthermore, since 1992 no quarter in the South
had generated 27 significant deals from a single industry.
In the winter 2002/2003 quarter, the automotive industry announced
27 significant deals in the Southern Auto Corridor.
This amazing expansion of a single manufacturing industry
is not exclusive to the areas around the "spine"
of the Southern Auto Corridor, which is without question Interstates'
65 and 75. With Toyota's decision to build its newest North
American plant in San Antonio, the Southern Auto Corridor
widened by more than a 1,000 miles. And if DaimlerChrysler
would have made good on its decision to build a van plant
in Savannah, the corridor would have widened even more. That
eastern widening will occur soon when an automaker will announce
an assembly plant somewhere on the I-95 corridor between Savannah
and Rocky Mount, N.C. by 2006.
Conclusion and Comment
The Southern Auto Corridor is, without debate or argument
from any expert, economist or politico, the rage when it comes
to automotive manufacturing in the U.S. and the world. The
industry's future is extremely bright in the region. Most
states and communities in the South are prepared for future
automotive related investment and job creation. And the ones
that aren't are quickly preparing themselves for automotive
We invite your automotive related company to establish a
foothold in the Southern Auto Corridor. Simply click on the
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