East Arkansas: Rising from Manufacturing Ashes to Automotive Success

By Trisha Ostrowski and Jennifer LeClaire

Arkansas Governor Mike Huckabee is known for his hunting and fishing metaphors. He described landing the $35 million, 217,000-square-foot Denso Corp. facility that will bring 500 jobs to rural Arkansas as a “wall mount,” which is a trophy so impressive that you take it to the nearest taxidermist and have it mounted for display.

Executives at the Japanese auto parts supplier may not have immediately understood Huckabee's southern communication style, but they did understand the advantages of locating in rural Arkansas. Indeed, since Toyota scouted the state for an automotive manufacturing plant in 2003, Arkansas has fast become one of the most desirable spots in the South for Japanese auto suppliers like Denso.

In addition to the Denso plant that will produce air conditioners for cars and radiators for heavy construction equipment, several other auto industry players are now settling in eastern Arkansas. Eakas Corp. announced its choice of Wynne to produce exterior parts for automobiles last year. Eakas' 91,000-square-foot facility will employ 250 people.

Then there's automotive supplier Systex Products Corp., which announced it would build a $12.5 million manufacturing facility in Osceola to supply the Denso plant last fall. Systex plans to eventually employ 40 people there. And Hino Motors Manufacturing recently announced it would build an $88 million manufacturing plant in Marion. It's a big change for east Arkansas.

“I'm convinced the future of the Delta region of our state will be far different from the struggles recent generations have endured,” Huckabee says of the east Arkansas region. “We're improving our schools, we're improving the health of our people, we're improving our interstate highways – we're doing the types of things we need to do to close the gap between the prosperity in northwest Arkansas and the poverty that besets so much of east Arkansas.”

Those struggles Huckabee mentioned include devastating plant closings in several area communities. The area lost more than 1,400 jobs when a Fruit of the Loom plant closed in 2001. Other plants had also closed, handing the area repeated job losses. But things are changing – and fast. Call it one of the South's greatest rural success stories in recent years as this impoverished rural area of east Arkansas transforms itself into the state's automotive corridor. The comeback begins with a strategic location.

Raw materials come in cheaply and finished products ship out quickly. That's because the state is bordered on one by the country's largest and busiest inland waterway – the Mississippi River. Just across the river in Memphis sits the largest airfreight facility in the world. Meanwhile, the largest railroad lines in the country – the Union Pacific and Burlington Northern – also serve the region. Finally, Arkansas boasts one of the busiest east-west interstate highways in the country, Interstate 40, which joins one of the busiest north-south interstate highways in the country, Interstate 55.

“The advantages that automotive suppliers are discovering in east Arkansas are an outstanding labor supply, a great location, and – being 40 minutes from Downtown Memphis — this area offers all of the amenities of a big city with the quality of life found in a small town,” said Clif Chitwood, president of Great River Economic Development Foundation, which promotes economic growth in Mississippi County. “Companies will also benefit from the fairly aggressive stance in attracting business and the desire of all counties in east Arkansas to attract companies. We have all had hard job losses and we are committed to replacing those jobs with better jobs. In large part, we believe that those better jobs will be automotive.”

Chitwood's belief is holding true despite what appeared to be a set back last year. Of all the recent auto supplier arrivals, Hino's decision to locate in east Arkansas is the silver lining of the dark cloud that hung over the region after being named runner up in 2003 for a Toyota assembly plant that eventually went to San Antonio. Toyota owns 50.1 percent of Hino, which somewhat redeems rural Arkansas in the auto race. The land that Hino will use is across the street from the Marion supersite, which the state views as a perfect location for an auto assembly facility.

“Toyota officials looked at this site intently when we sought to land the Tundra plant,” Huckabee said. “We didn't win the battle for the Toyota plant, but the fact that we were the runner up put Crittenden County on the radar screens of economic developers across the country and around the world. Companies worldwide have come to recognize that this is a magic location from a transportation standpoint.”

Wooing Hino is no small victory. Hino Senior Managing Director Bunju Hagiwara said the company selected Marion after considering 20 locations around the country. The company is an industry leader in Japan and has held the top position in the Japanese market for medium- and heavy-duty diesel trucks for 30 years. Hino will provide 200 to 300 high-paying factory jobs to manufacture its differentials, rear axle and suspension-related parts for Toyota vehicles. Hino chose a 160-acre site in Crittenden County's Marion Railport Industrial Park - 2,100 acres bounded on the north by the Union Pacific Intermodal Railport.

“The East Coast lines that terminate in Memphis can exchange freight with the West Coast lines, and from Marion, auto assembly plants and suppliers benefit from rail and highway coverage for the entire country,” says Kay Brockwell, director of Marion's Department of Economic Development. “The Railport Industrial Park, designated an Arkansas Enterprise Zone, is located within three miles of both Interstates 55 and 40, four miles from a municipal airport, eight miles from the Port of West Memphis, 16 miles from the Port of Memphis, and 20 miles from the Memphis International Airport.”

Governor Huckabee has been close to the airport himself lately, traveling to and from Japan to woo additional automotive companies to his state. Huckabee understands the importance of building long-term relationships with Japanese companies to continue developing the east Arkansas section of the Southern Auto Corridor. State officials still have not given up hope that a major assembly plant will choose the Marion supersite and further drive this rural region of the state.

Huckabee says, in no uncertain terms, “The trend of automobile manufacturers coming to the South is only going to accelerate, and Arkansas is ready to be a player in the competition to land these facilities.”