December 7, 2011
For real-time news on business, politics and economic development in the South, go to www.RandleReport.com. For more information on economic development in the South, go to www.SB-D.com. And for more information on rural development in the South, go to www.SmallTownSouth.com.
Mercedes produces 1.5 millionth Alabama-made vehicle
In December, Mercedes-Benz produced its 1.5 millionth vehicle at its plant in Vance, Ala. The German automaker rolled off a silver ML 350 SUV that was purchased by a customer in Encino, Calif. The first M-Class rolled of the assembly line in Vance on February 14, 1997.
Mercedes begins expansion in Alabama
Construction got underway in December at the Mercedes-Benz plant in Vance, Ala., paving the way for production of the C-Class model. The latest expansion is a $289 million project, part of a $2 billion build-out of the plant that will take place over several phases. Mercedes currently employs 2,800 workers at the facility and once the $2 billion expansion is complete, that total will rise to 4,200.
Louisiana's Next Autoworks project officially dead
Two years ago V Vehicle announced it would build an inexpensive fuel-efficient car at the former Guide auto parts plant in Monroe, La. The new automotive assembly project called for 1,400 jobs if a loan from the Department of Energy came through. The application for that $320 million loan was denied by DOE in late November. The company, which changed its name from V Vehicle to Next Autoworks, cited the controversy over the Solyndra bankruptcy as the reason the application was turned down.
Manufacturing on a roll; Oklahoma leads pack
Manufacturing jobs increased by 1.9 percent between October 2010 and October 2011. That doesn't seem like much, but considering all other sectors grew by only 1.1 percent during that time it is a huge statement. Utah, Louisiana, South Carolina and Michigan all saw about five percent gains in their manufacturing employment rolls during the October year-to-year. Oklahoma saw an increase of 8.5 percent, the largest such increase in manufacturing job gains in the country from October 2010 to October 2011.
Manufacturing jobs rebound sharply in S.C.
South Carolina saw 15,000 more jobs from October 2010 to October 2011, dropping that state's unemployment rate to 10.5 percent. Manufacturing accounted for more than three-quarters of the job total, posting a 10,800 gain during the same period. In September and October of 2011, Bridgestone, Continental Tire and Nephron Pharmaceuticals announced plans to create a combined 3,250 jobs in the Palmetto State.
Chattanooga gets job push, unemployment down almost a point
Two new, large employers in Chattanooga, Tenn. are helping that market recover and fast. Strong hiring from Volkswagen and Amazon.com helped Chattanooga's unemployment rate to drop nearly a point in October, from 8.7 percent to 7.9 percent. Chattanooga's unemployment rate hadn't seen a rate below 8 percent since just before President Barack Obama took office nearly three years ago.
St. Louis Post-Dispatch courts Mercedes after embarrassing Alabama immigration law event
In November, the St. Louis Post-Dispatch courted Alabama's Mercedes-Benz plant after police in Tuscaloosa arrested Detlev Hager, a 46-year-old Mercedes executive traveling on business in the state. Hager didn't have proper identification on him or in his rental car so under Alabama's new immigration law he was arrested. The Post-Dispatch opinion piece read, "Hey, Mercedes, time to move to a more welcoming state" and "Carpetbaggers never have been treated very kindly in the South, though we would have thought exceptions would have been made for those with SUV factories in their carpetbags." The opinion piece also added, "We are the Show-Me State, not the 'Show me your papers" state. Charges were dropped after an associate delivered Hager's passport and German driver's license, the Tuscaloosa News reported.
Sweeney, Randle weigh in on Alabama immigration law
In an article published on November 30 in the Mobile Press-Register, Mark Sweeney, senior partner at Greenville, S.C.-based McCallum Sweeney Consulting, weighed in on Alabama's tough new immigration law. "Alabama has worked so hard to reinvent itself as a destination for global manufacturing. It's really been a remarkable transformation. Unfortunately, this law really is counter to that effort. There's nothing good about it. I can't see any positives in terms of economic development," Sweeney said in the article. In November, an embarrassing development occurred in Alabama when a Mercedes executive was arrested as a result of the new law. Charges were eventually dropped after the German executive, who was visiting the automaker's assembly plant in Vance, Ala., delivered the proper paperwork to Alabama authorities. A week later, a Japanese man temporarily working at Honda's assembly plant in Lincoln, Ala. was stopped at a roadblock and arrested as a result of the new law. Mike Randle, publisher of SB&D, also was interviewed by an Alabama newspaper about the tough immigration law. "We get foreign visitors all the time. This is going to happen again, there's no question. If it does, I can't imagine what the impact will be," Randle said in an article publishing by The Birmingham News in November.
Kia's effect on Alabama and Georgia
Two years ago Korean automaker Kia opened its first assembly plant in the U.S. in West Point, Ga. After two years we thought it would be a good idea to update the automaker's economic impact on Alabama and Georgia. The plant itself currently houses about 3,000 workers that build three models working three shifts a day. Two of the plants largest suppliers, Mando and Sewon America, have expanded several times. The two suppliers are part of a network of 60 in east Alabama and west Georgia that supply the plant. It is estimated that well over 10,000 jobs have been directly created, including assembly plant jobs and supplier jobs.
Japanese auto parts manufacturer to locate plant in Kentucky
Daicel Safety Tube Processing, a Japanese automotive components manufacturer, announced in the fall it will locate a new facility in Beaver Dam, Ky. The $8.8 million investment represents the third Daicel plant to locate in Beaver Dam. The company is creating 25 new jobs to be added to its current employment of 525 in the rural Kentucky market.
Forbes' best states for business
Virginia (2), North Carolina (4), and Texas (6) were the only Southern states to make the top 10 of Forbes magazine's best states for business report of 2011. Georgia and Oklahoma made it into the magazine's top 20.
Louisiana jumps 14 spots in Forbes' 'best states' ranking
Louisiana vaulted 14 positions in the latest Forbes ranking of "Best States for Business," capping a year in which the state climbed to its highest-ever business climate ranking by every leading publication that measures the economic progress of states. Until recently, Louisiana had ranked 49th or 50th in every year of the Forbes ranking. In the latest Forbes ranking, Louisiana ranked 30th among all U.S. states.
New megasite being readied in Northeast Florida
The Crawford Diamond Industrial Park is being readied by Nassau Co., Fla. The site features 1,814 acres and sits at the junction of two major railroad lines. Steve Rieck, executive director of the Nassau County Economic Development Board, said that Toyota considered the site for an assembly plant a few years ago before choosing Tupelo, Miss. About $86 million in state road construction is being spent to widen access to the site and a gas line is being built adjacent to the dual-rail site.
Sam Dong opening second facility in rural Tennessee
Sam Dong, a South Korean company that manufactures magnet copper wiring products used in the production of transformers, motors and generators, announced in December it is locating a second manufacturing facility in Rogersville, Tenn. The $2.8 million project will create 85 new jobs.
Israeli auto parts supplier to set up plant in Auburn, Ala.
Arkal Plastic Products announced in November it will invest more than $7 million to set up a plant in Auburn, Ala. to produce plastic parts for the automotive industry. The Israeli company, which operates a plant in Canada that serves the Canadian and Michigan automotive cluster, will hire 25 workers initially for the new Auburn plant.
Caterpillar moving plant to North America from Japan
Caterpillar officials announced in mid-November that the world's largest manufacturer of construction and mining equipment will build a new plant in North America and relocate production from Japan. The plant will be CAT's "global source" for small-track tractors and mini-hydraulic excavators for the America's. The new facility will also export partially assembled mini-excavators to Europe. No location for the plant has been determined as of mid-November, but the Illinois-based company said it will house about 1,000 workers. Caterpillar began a "Southern strategy about 15 years ago placing plants in the American South in Arkansas, North Carolina, Texas and Georgia, where union activity is much lower than where the company is located in the Midwest.
Toyota celebrates 25 years at Georgetown, Ky.
In November, Toyota and Kentucky officials celebrated the 25th year of production in Georgetown, Ky. The company began hiring workers at the plant in 1986. Today, the Japanese automaker employs about 6,600 workers at the facility, which assembles about 500,000 vehicles a year. The Georgetown plant produces the Camry, Camry Hybrid, Avalon and Venza and is one of 14 Toyota plants in North America. The company, which also opened its newest plant in Blue Springs, Miss. in the fall quarter, has invested about $5.4 billion at its Kentucky facility. Suppliers to Toyota's Georgetown plant employ about 9,600 workers.
GM bringing back assembly to Spring Hill, Tenn. plant; 1,900 jobs
General Motors announced in late November it will reopen its Spring Hill, Tenn. plant for assembly next year. In an unusual move, GM plans to use the facility as a flexible plant, one that would allow for "real time reaction to sales spikes in a given car or crossover.” To start though, GM will invest $61 million and rehire 700 workers to build the Chevrolet Equinox. That model, which GM has had difficulty in keeping up with demand, is currently being built in Canada. Later, GM will bring in a new midsize vehicle and invest $183 million and an additional 1,200 workers for that vehicle's debut in the 2015 model year. GM closed its Spring Hill facility for assembly in 2009, but kept its massive stamping operations going to build engines at the former Saturn assembly plant.
GM's retooling of Arlington, Tex. plant on schedule
The 57-year-old GM plant in Arlington, Tex. is retooling for another era of auto assembly in Texas. Last spring GM announced it was investing $331 million to expand and retool the facility that builds full-sized SUVs. That retooling, which includes a new body shop, is on schedule according to GM. The Arlington plant is the only U.S. facility left where GM assembles full-sized SUVs such as the Yukon, Tahoe and Escalade models. The expansion project will enable GM's 2,500 employees in Arlington to produce the next generation of large SUVs.
Toyota era begins in Mississippi
The first Mississippi-built Toyota Corolla model rolled off the line at the Japanese automaker's plant in Blue Springs on November 17, 2011. The $1.3 billion facility officially opened in November after several delays after it was announced in 2007. The plant can produce up to 150,000 Corollas a year. The current workforce at the plant stands at 1,500 that work a single shift Monday through Friday. Next year, Toyota will add a second shift, which should bring employment at the plant to 2,000. As of the end of the year, seven suppliers have announced facilities in Mississippi to serve the plant.
Toyota supplier opens in Mississippi
Systems Automotive Interiors has opened its facility that it shares with Toyota Boshoku Mississippi. The facility will assemble seats for Toyota Motor Manufacturing Mississippi. Boshoku is producing the interior door panels for the Corolla. At full production, SAI expects to produce 150,000 seats for the Blue Springs assembled vehicles in a just-in-time environment. Employment at the seat plant is set for 80.
Caterpillar opens $426 million Winston-Salem, N.C. plant
One of the largest manufacturing and economic development projects in North Carolina history officially opened for business. Caterpillar opened its $426 million axle manufacturing plant in Winston-Salem in the fall quarter. According to Steve Wunning, Caterpillar group president who is responsible for resource industries such as mining, the plant will export about 90 percent of the axles made at the plant. The project will create 398 full-time jobs and 112 contract jobs.
Kumho Tire plant in Macon delayed again
In the fall quarter, Kumho Tire officials announced a third delay in the building of the Korean tire maker’s plant in Macon-Bibb Co., Ga. The $225 million plant was announced in 2008 and company officials have told Georgia Gov. Nathan Deal that the facility's opening won't occur until 2013. When announced, the proposed project was supposed to create 450 new jobs.
Kia celebrates second year of assembly in west Georgia
Korean automaker Kia celebrated its second year of production at its plant in West Point, Ga. in the fall quarter. The facility produces 300,000 vehicles a year and began production in November 2009. Currently, Kia's plant houses more than the 2,500 workers the company announced would be employed at the plant.
Steit USA Armoring hiring 50 in S.C.
Streit USA Armoring, a maker of armored vehicles, announced plans to expand its operations in Charleston Co., S.C. in the fall quarter. The company will invest $5.8 million and add 50 jobs.
Alabama ties Michigan, Minnesota for steepest drop in unemployment rate
In October, Alabama's unemployment rate fell from 9.8 percent to 9.3 percent. The half-point drop tied Michigan (11.1 to 10.6) and Minnesota (6.9 to 6.4) for the steepest drop in jobless rates among all U.S. states that month.
West Tennessee adds more jobs than any TVA region in 2011
Economic development in West Tennessee is surging as companies like Electrolux, Mitsubishi Electric, and auto parts suppliers Quaprotek and UGN begin hiring at new plants. Among TVA's regions, West Tennessee saw the most added jobs and the second highest in capital investment in the first 11 months of 2011.
U.S. manufacturers book most orders since 2008
In September, U.S. manufacturers booked $32.6 billion in new orders for machinery equipment, the largest total since July 2008. The data, released by the Census Bureau in the fall quarter, includes sales by Caterpillar, which in the summer saw its best quarter for sales in the company's history.
Southern-built, foreign-owned and exported worldwide
The U.S. has lost 2.8 million jobs to China alone over the last 10 years. The vast majority of those jobs are in the manufacturing sector and SB&D estimates that over 1 million manufacturing jobs have been lost in the South to China in those 10 years. But the tide is turning and it is doing so fast. No where else is the return of manufacturing jobs to the South more visible than in the automotive industry, where vehicles built in the Southern Automotive Corridor are now being delivered all over the world at a pace never before seen. Toyota is now exporting San Antonio-built Tundra and Tacoma pickup trucks and exports 100,000 vehicles from its four U.S. plants in Blue Springs, Miss., Georgetown, Ky., San Antonio and Princeton, Ind. to 19 foreign countries. Nissan, which operates plants in Canton, Miss. and Smyrna, Tenn., is preparing to begin exporting its vehicles and may even build some models -- some that are not even sold in North America -- in the Southern Auto Corridor strictly for export. Currently, more than half of the models assembled at the Mercedes-Benz Vance, Ala. plant are exported overseas and BMW is expected to export about 70 percent of the X3, X5 and X6 models made at its Greer, S.C. plant to more than 130 global markets. BMW was recently named "Exporter of the Year" by the National Association of Foreign Trade Zones.
Auto parts supplier adding 64 jobs in rural N.C.
Henniges Automotive, a manufacturer of automotive sealing parts, is expanding its plant in Reidsville, N.C. The company is investing $2.2 million and will hire 64 workers.
Stamping operation expanding in Kentucky
GR Spring & Stamping, an automotive parts supplier, is expanding in Richmond, Ky. The company is investing $1.7 million in the project and 25 new jobs are being created.
Cummins expands in Charleston, S.C.
Cummins Technical Center Charleston, a designer and tester of diesel engines and parts, announced plans to expand its operations in Charleston Co., S.C. More than $24 million is being invested in the project, which will create 31 new jobs.
Bosch Rexroth expands in upstate S.C.
Bosch Rexroth announced plans to expand its hydraulics manufacturing operations in Greenville Co., S.C. in the fall quarter. The company is investing $80 million in the project and will add 160 new jobs.
Honda hiring at its Alabama assembly plant
Japanese automaker Honda announced in November it is hiring 100 new workers at its plant in Lincoln, Ala. The added workers are part of the company's $84 million capacity upgrade at the plant.
Titan Tire purchases former Goodyear plant in Union City, Tenn.
For more than a year now it was hard to find bad news coming from the Southern Automotive Corridor (www.SouthernAutoCorridor.com). Really, the only negative was a big one when Goodyear closed its large plant it had operated in Union City, Tenn. since 1969 in July of this year. That closure, the only significant one of any kind in the Southern Auto Corridor in 2011, put 1,800 Tennesseans and Kentuckians out of work. But the bad news was followed by good news in November when Titan Tire announced it had purchased the former Goodyear tire plant. Titan manufactures tires for earth-moving equipment, farm implements and other off-road vehicles.
5,000 wait in line for 1,600 Nissan jobs in Tennessee
An estimated 5,000 people stood in line in Murfreesboro, Tenn. in November to get a crack at one of the 1,600 jobs the automaker is adding for its new lithium-ion battery plant that is located next to its assembly plant. The jobs will pay an average of $12.50 an hour with benefits.
La.-based Entergy CEO wants to deal with global warming now
J. Wayne Leonard, CEO of News Orleans-based Entergy Corp., said in a speech to executives of the National Wildlife Federation in November that he supports a per-ton fee on carbon emissions. Leonard has been controversial among his power company peers, as he has long supported some form of a carbon cap and trade initiative. Instead of supporting the unsuccessful national carbon emissions "cap and trade" program, Leonard now is in favor of a per-ton fee on carbon emissions. The fee will be levied on all carbon emissions to provide a financial incentive to reduce emissions, with money from the fee to be used to reduce the national deficit and for support of research and development of carbon reduction technologies. In Leonard's speech he said "I can think of no time in history when the planet is in as much peril as it is today." He also said, "Every single ton that's put into the atmosphere is just going to have to pay its own way. People are going to argue that there are losers in that. Well, there have been winners for decades, because they've been putting it out there for free. We have to get started or we will end up doing a lot of triage, trying to decide between who lives and who dies, what species do we save, what cities do we save."
Port of Savannah deepening clears hurdle
In November the deepening of the Savannah River to accommodate large Panamax ships cleared a big hurdle when the board of the South Carolina Dept. of Health and Environmental Control unanimously voted to let the project move forward. The two states have been in a 12-year battle to decide which port would be dredged first, the Port of Charleston or the Port of Savannah. Dredging the ports from 42 feet to 48 feet will enable post-Panamax container ships to call on Savannah. Currently, the only East Coast port that can accommodate the larger ships is the Port of Hampton Roads in Norfolk, Va.
Kongsberg Automotive expands in S.C.
In the fall quarter Kongsberg Automotive, a maker of automotive components, announced plans to expand its existing operation in Pickens County, S.C. The $7.3 million investment is expected to generate 300 new jobs.
Another BMW parts supplier expanding
Gestamp South Carolina announced in the fall it is investing $51 million to add space at its facility in Union Co., S.C. The project will generate 100 new jobs.
FMC Lithium investing $50M in electric car battery plant
FMC Lithium is adding 25 jobs in a $50 million expansion of its electric car battery component plant in Gaston County, N.C. The expansion will bring employment at the facility to 240.
Auto supplier creating 150 jobs in Dunlap, Tenn.
In the fall quarter, Mann+Hummel USA announced plans to build an auto parts plant in Dunlap, Tenn. The German automotive supplier will make air intake manifolds and air cleaner systems. The $15 million deal will create 150 jobs.
Texas tops business climate honors
Site Selection magazine has named Texas as the state with the best business climate for 2012. Following The Lone Star State was Georgia, North Carolina, Virginia and South Carolina.
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