Spring 2010
Editorial
New VW Plant has Big Connections with Detroit and Mexico
Mike Randle, Editor
We've never seen as much interest in the opening of a new foreign automotive plant in the Southern Automotive Corridor from auto parts suppliers in Michigan, Ohio and other old-line automotive states in the Midwest. Since Volkswagen announced in the summer of 2008 it had picked Chattanooga as the site of its first U.S. plant since the late 1980s, our Web site www.SouthernAutoCorridor.com has received dozens of official inquiries from parts suppliers in and around Detroit. In fact, I would estimate that inquiries from Michigan off our Web site since VW announced have equaled if not surpassed inquiries from all other locations combined. That is how many there have been.
We can say with certainty that the interest from companies based in the Midwest in the prospects of supplying the German automaker's Chattanooga plant is 10 times or more of that of other foreign automotive plants that have been built or expanded in the South since SouthernAutoCorridor.com went live on the World Wide Web in 2003. Since then we have followed closely where inquiries were sourced prior or shortly after the opening of Honda and Hyundai in Alabama, Kia in Georgia, Toyota in Texas and Nissan in Mississippi. When those foreign plants were announced, there was no increase in inquiries from Michigan-based parts suppliers on SouthernAutoCorridor.com.
We were curious why there was so much interest coming from the Midwest regarding the VW project and chalked it up to the reduced workload many of those suppliers faced as GM and Chrysler bellied up and downsized in 2009. But it turns out that Volkswagen must have made it clear early on to suppliers in the Midwest that it was interested in their products and services because it looks as if up to 25 suppliers in and around Detroit will end up with VW contracts. While there are dozens of Midwest-based suppliers providing parts for the 10 other foreign automotive plants in the region, almost every single one of them operate a facility near those plants. In Volkswagen's case, those 25 companies that will supply the Chattanooga plant will do so, at least initially, from their facilities in the Midwest.
VW's Chattanooga plant will also work with approximately 40 suppliers in Mexico. That makes perfect sense since VW has operated a large plant in Puebla for decades. The German automaker will import engines to be installed in cars built in Tennessee initially from Europe and Mexico.
As for the number of suppliers Volkswagen expects in and around Chattanooga, that figure is expected to be around 30 at some point before or shortly after the plant opens next year. For more information on the South’s automotive industry, go to www.SouthernAutoCorridor.com.
mike@sb-d.com
It's Time to Toss the Stinking Recession in the Dirt and Let it Rot
Mike Randle, Editor
Editor's Note: This editorial can be found in Southern Business & Development magazine and on www.SB-D.com.
Something has been stinking up the South and it's not the oil in the Gulf of Mexico. Nope, this stink has been wafting around a lot longer than the oil from the BP blowout in the Gulf. What's been stinking up the South since 2006 has been the economy. And when the economy stinks, economic development, or more specifically, job creation, is even stinkier.
If the numbers that we are seeing here at Southern Business & Development are any indication -- including the data that is contained in the 2010 SB&D 100 story featured in this edition (page 28) -- then we can bury the Great Recession in the dirt and let it rot. It's finally dead. And as the owner of Southern Business & Development and its three Web sites, I say "Hallelujah, the Great Recession is dead!"
We certainly wouldn't be claiming that the aforementioned mephitic economy can now be buried unless we had the numbers to prove it. Let's start with reaching the bottom, which is required before anything bounces back. If you study the numbers in this year's SB&D 100, you will be convinced that the South's economy finally reached the bottom in 2009. More specifically, we maintain that the bottom was reached in the late summer or early fall of last year, which means most of the year was a bust for economic development organizations in the South.
Prior to mid-2009, our numbers show that job generation in the South struggled every year since 2006. That doesn't mean that we believe the recession began in 2006 as opposed to late 2007, the time frame agreed upon by many as the official start of the Great Recession. But our 2006 and 2007 numbers, which can be found in this year's SB&D 100 report, clearly indicate that the Great Recession really got its start in 2006 when the SB&D 100 lost over 10,000 jobs. It lost another 10,000 jobs in 2007.
The most important number that tells us that we reached the bottom last year and now we are rebounding is the number 368. That is how many projects were announced in the South in 2009 with 200 jobs or more and/or $30 million or more in investment. It is the lowest total of deals meeting or exceeding those thresholds since the SB&D 100 was first published in 1994. How do we know that number won't drop again when we publish this edition next year? Well, by our count, we are well ahead of last year's big project pace as of June 15. In fact, unless there is a significant setback for some reason, we predict the South could add as many as 100 major projects this year, giving it over 450 in the 2011 SB&D 100.
Other data supporting our claim that the Great Recession is dead, therefore cannot stink up the South any longer can be found in our Around the South section, which begins on page 10. In April of this year, there were 1,856 mass layoffs in the U.S. In April 2009, there were 2,663 mass layoffs. That's a significant drop in large job loss events. Yet, in April of this year, of the 1,856 mass layoffs in the U.S. only 369 occurred in the South, or just 20 percent of all mass layoffs in this country. That's impressive considering the South is home to so many more corporate and industrial operations than any other U.S. region. It's even more impressive when you consider over 40 percent of the nation's population lives in the South.
Further proof that the bottom was reached in 2009 and recovery is well underway in 2010 can be found by studying some of the state performances in this issue's SB&D 100. Several states posted record lows in terms of points and total projects in the SB&D 100 report that is contained in this issue. Take Mississippi for example. The Magnolia State had a stinker of a year last year, ringing up only 45 points in the 2010 SB&D 100. The 45 points represents a record low for Mississippi. But, more than another other state, Mississippi is the poster child of the end of the Great Recession and the beginning of the Great Recovery. So far in 2010, it has already more than doubled its 45 point total and the year isn't half over yet.
Now that the recession is dead and we can breathe a little easier, let's hope that there is a much longer recovery than what we saw between the recession of 2001-2002 and this last one that we believe began in 2006. Because if you study total jobs created by the SB&D 100 each year since 2001 (turn to page 28), you will clearly see that between 2001 and 2009 there were really only two good years (2004 and 2005) of job creation from large projects in the South. If we can't do better than that over the next 10 years or so, that will really stink.
mike@sb-d.com
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Spring 2010
Editorial
New VW Plant has Big Connections with Detroit and Mexico
Mike Randle, Editor
We've never seen as much interest in the opening of a new foreign automotive plant in the Southern Automotive Corridor from auto parts suppliers in Michigan, Ohio and other old-line automotive states in the Midwest. Since Volkswagen announced in the summer of 2008 it had picked Chattanooga as the site of its first U.S. plant since the late 1980s, our Web site www.SouthernAutoCorridor.com has received dozens of official inquiries from parts suppliers in and around Detroit. In fact, I would estimate that inquiries from Michigan off our Web site since VW announced have equaled if not surpassed inquiries from all other locations combined. That is how many there have been.
We can say with certainty that the interest from companies based in the Midwest in the prospects of supplying the German automaker's Chattanooga plant is 10 times or more of that of other foreign automotive plants that have been built or expanded in the South since SouthernAutoCorridor.com went live on the World Wide Web in 2003. Since then we have followed closely where inquiries were sourced prior or shortly after the opening of Honda and Hyundai in Alabama, Kia in Georgia, Toyota in Texas and Nissan in Mississippi. When those foreign plants were announced, there was no increase in inquiries from Michigan-based parts suppliers on SouthernAutoCorridor.com.
We were curious why there was so much interest coming from the Midwest regarding the VW project and chalked it up to the reduced workload many of those suppliers faced as GM and Chrysler bellied up and downsized in 2009. But it turns out that Volkswagen must have made it clear early on to suppliers in the Midwest that it was interested in their products and services because it looks as if up to 25 suppliers in and around Detroit will end up with VW contracts. While there are dozens of Midwest-based suppliers providing parts for the 10 other foreign automotive plants in the region, almost every single one of them operate a facility near those plants. In Volkswagen's case, those 25 companies that will supply the Chattanooga plant will do so, at least initially, from their facilities in the Midwest.
VW's Chattanooga plant will also work with approximately 40 suppliers in Mexico. That makes perfect sense since VW has operated a large plant in Puebla for decades. The German automaker will import engines to be installed in cars built in Tennessee initially from Europe and Mexico.
As for the number of suppliers Volkswagen expects in and around Chattanooga, that figure is expected to be around 30 at some point before or shortly after the plant opens next year. For more information on the South’s automotive industry, go to www.SouthernAutoCorridor.com.
mike@sb-d.com
It's Time to Toss the Stinking Recession in the Dirt and Let it Rot
Mike Randle, Editor
Editor's Note: This editorial can be found in Southern Business & Development magazine and on www.SB-D.com.
Something has been stinking up the South and it's not the oil in the Gulf of Mexico. Nope, this stink has been wafting around a lot longer than the oil from the BP blowout in the Gulf. What's been stinking up the South since 2006 has been the economy. And when the economy stinks, economic development, or more specifically, job creation, is even stinkier.
If the numbers that we are seeing here at Southern Business & Development are any indication -- including the data that is contained in the 2010 SB&D 100 story featured in this edition (page 28) -- then we can bury the Great Recession in the dirt and let it rot. It's finally dead. And as the owner of Southern Business & Development and its three Web sites, I say "Hallelujah, the Great Recession is dead!"
We certainly wouldn't be claiming that the aforementioned mephitic economy can now be buried unless we had the numbers to prove it. Let's start with reaching the bottom, which is required before anything bounces back. If you study the numbers in this year's SB&D 100, you will be convinced that the South's economy finally reached the bottom in 2009. More specifically, we maintain that the bottom was reached in the late summer or early fall of last year, which means most of the year was a bust for economic development organizations in the South.
Prior to mid-2009, our numbers show that job generation in the South struggled every year since 2006. That doesn't mean that we believe the recession began in 2006 as opposed to late 2007, the time frame agreed upon by many as the official start of the Great Recession. But our 2006 and 2007 numbers, which can be found in this year's SB&D 100 report, clearly indicate that the Great Recession really got its start in 2006 when the SB&D 100 lost over 10,000 jobs. It lost another 10,000 jobs in 2007.
The most important number that tells us that we reached the bottom last year and now we are rebounding is the number 368. That is how many projects were announced in the South in 2009 with 200 jobs or more and/or $30 million or more in investment. It is the lowest total of deals meeting or exceeding those thresholds since the SB&D 100 was first published in 1994. How do we know that number won't drop again when we publish this edition next year? Well, by our count, we are well ahead of last year's big project pace as of June 15. In fact, unless there is a significant setback for some reason, we predict the South could add as many as 100 major projects this year, giving it over 450 in the 2011 SB&D 100.
Other data supporting our claim that the Great Recession is dead, therefore cannot stink up the South any longer can be found in our Around the South section, which begins on page 10. In April of this year, there were 1,856 mass layoffs in the U.S. In April 2009, there were 2,663 mass layoffs. That's a significant drop in large job loss events. Yet, in April of this year, of the 1,856 mass layoffs in the U.S. only 369 occurred in the South, or just 20 percent of all mass layoffs in this country. That's impressive considering the South is home to so many more corporate and industrial operations than any other U.S. region. It's even more impressive when you consider over 40 percent of the nation's population lives in the South.
Further proof that the bottom was reached in 2009 and recovery is well underway in 2010 can be found by studying some of the state performances in this issue's SB&D 100. Several states posted record lows in terms of points and total projects in the SB&D 100 report that is contained in this issue. Take Mississippi for example. The Magnolia State had a stinker of a year last year, ringing up only 45 points in the 2010 SB&D 100. The 45 points represents a record low for Mississippi. But, more than another other state, Mississippi is the poster child of the end of the Great Recession and the beginning of the Great Recovery. So far in 2010, it has already more than doubled its 45 point total and the year isn't half over yet.
Now that the recession is dead and we can breathe a little easier, let's hope that there is a much longer recovery than what we saw between the recession of 2001-2002 and this last one that we believe began in 2006. Because if you study total jobs created by the SB&D 100 each year since 2001 (turn to page 28), you will clearly see that between 2001 and 2009 there were really only two good years (2004 and 2005) of job creation from large projects in the South. If we can't do better than that over the next 10 years or so, that will really stink.
mike@sb-d.com
next