There is the Silicon Valley in California, the Research Triangle in North Carolina, Wall Street in New York and the Rust Belt. Now there is another term that depicts a major economic trend in the U.S.: the Southern Auto Corridor.
“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,” says Mike Randle, managing editor of Southern Business & Development (SB&D) magazine. “Fact is, the Southern Auto Corridor represents an irreversible, sustainable and high-end manufacturing region. It represents strength.
“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 related industries.”
While domestic automakers have been closing plants in the Midwest, foreign automakers have been expanding dramatically in the South for the past 20 years. With foreign automakers thriving, and picking up increasing shares of the market in the U.S., the trend to locate in the sunny, incentive-friendly, non-unionized South is expected to continue — possibly even increasing in the coming years.
“If you listen to the experts in the automotive industry, you hear a lot of different numbers,” said Tim Weston, senior economic specialist with Tennessee Valley Authority (TVA). “But the one number pretty consistent is that three or more automobile assembly plants will locate in the South in the next five years. We believe there is a still a bright future for automotive manufacturing in the South, and believe the certification process gives us a leg up on having a shot at locating one of them.”
May 14 was the deadline for applications for megasite certification by the TVA. Weston said five or six sites in Mississippi applied by the deadline, sites that will be evaluated by the consultants. The megasite certification is expected to make these sites more attractive by reducing the amount of time it takes to site an automotive assembly plant.
Growth, fierce competition expected
While growth in the industry is expected, there will be stiff competition for those big projects. Even the boundaries of the Southern Auto Corridor are shifting.
“The Toyota project changed what was being called Southern Auto Corridor when they located way over in Texas,” Weston said. “Nissan located in Canton, which is farther east than earlier plants. The South is growing not just in automotive manufacturing, but in population and in commercial and other industrial growth. These warm climate areas in general are continuing to grow year after year. Companies are seeking to locate in areas with vibrant communities and population growth. I think that bodes well for us in Mississippi.”
What are Mississippi’s chances of landing one of the new automobile assembly plants? The SB&D Web site www.southernautocorridor.com lists Mississippi overall and five specific locations in the state as among the “Preferred Southern Automotive Sites.” Those locations are Jackson, Tupelo, Vicksburg, Columbus and Starkville. All four regions are taking aggressive steps to be ready for the next automaker looking for a new home.
One thing that could help the state’s chances is that Mississippi was one of only three states east of the Mississippi River where the entire state is in attainment with air quality standards for ozone. Industries locating in non-attainment areas are normally required to spend more on air pollution controls, which can be a disincentive in the highly competitive site selection process.
Below is an overview of what is being done in key areas of the state to prepare to attract and support automotive assembly plants and suppliers.
Metro Jackson, Central Mississippi have people
Duane O’Neill, president of the Metro Jackson Chamber of Commerce, said the automotive sector in the South is still in its infancy.
“I think there is a lot of growth ahead of us in the South for the automotive sector,” O’Neill said. “This is a particular industry that needs a support system. What we have done here in Mississippi, Alabama, Tennessee and all across the entire South recently has enhanced the support industries for the automotive sector. With that comes the possibility of being able to attract more auto assembly plants to this region.”
O’Neill said there is a growing synergy working in the South’s favor because as more and more suppliers are attracted to the area, that makes the area more attractive for assembly plants — and more attractive for more suppliers.
Locating Nissan in Canton has helped the state develop its supplier base. And O’Neill said it is also important that the state has developed a trained workforce for industry.
“Our colleges and community colleges are working to produce a workforce that is very suited for this type of industry,” O’Neill said. “It is a highly technologically- driven field. If you see all the technology used at Nissan, it is not just an industry that relies on assembly line workers. All of these folks are really technicians. So this is a whole change in our culture, and it will continue to allow us to attract more and more of that type of industry.”
O’Neill said it is a feather in the state’s cap that Nissan has been able to hire a quality, skilled workforce even while expanding.
“Other companies can see they were able to attract a qualified, skilled workforce to accomplish amazing things here in Mississippi like launching five different vehicles in a very short time,” he said. “I think that accomplishments by Nissan and our workforce here will speak volumes to other potential candidates. It is still a very vibrant industry for us to be courting here for the next number of years.” Jackson is also preparing for the next wave of growth by preparing industrial sites of about 1,000 acres. One such site has been developed in Rankin County, and work is in progress putting together an additional site in Hinds County.
One major advantage that Jackson has is its population base. There are an estimated 229,000 people in the Jackson area who are in the workforce, representing the largest number of workers concentrated in one place in the state.
Columbus applies for megasite certification
Columbus has a megasite currently under consideration for certification by TVA located on 1,540 acres of land in Lowndes County between the Golden Triangle Regional Airport and the industrial park. Charleigh Ford, vice president of the Columbus/Lowndes Economic Development Association, said applying for the megasite certification was an enormous undertaking.
“But we did it, and we have a great site down here that we feel like will be certified,” Ford said. “We feel like this certification will weed out the players from the non players. A megasite is a piece of property where you can place a major manufacturer like an auto assembly plant. It is the big gun in attracting new developments.”
Even if it doesn’t attract an automotive assembly operation, Ford said they are in a perfect location to host parts suppliers because these companies could serve several large manufacturers in the region. Nissan in Canton is southwest, the Mercedes-Benz plant sits east in Vance, Ala., and Hyundai is located to the southeast in Montgomery, Ala. Ford said there are five to six times as many jobs generated by support businesses as by the big catalyst in the middle of this thing, the assembly plant.
“We’re certainly could very well attract an auto assembly plant, but we are also promoting ourselves regarding tier two and tier three suppliers,” Ford said. “We are getting in the flow of things as far as parts suppliers are concerned. We are strategizing in that area, as well, we want to talk to second and third tier suppliers.”
After TVA finishes its certification process, the sites that have been certified will be promoted in a catalog. Ford said the megasites aren’t just for automotive manufacturers, but those are the most likely type of development.
“Numerous ingredients go into certification,” Ford said. “If you meet these things, you can save an automotive company six months in the search process. There are things that have to be certified, and we will already have that done.”
Ford said his organization is also working in alliances with 16 others counties that make up the East Central Mississippi Economic Council in areas such as attending regional and national automobile trade shows and sponsoring dinners for major consultants at the Pearl River Resorts.
“We’re nurturing relationships with consultants,” Ford said. “We have discovered, as everyone has, that the consultant is the one you have to convince. Consultants are the ones going to be doing the sorting for the client. Most of the time big companies tell consultants what they want, and they go find it for them. That TVA study is going to facilitate that, I hope.”
North Mississippi working together
David Rumbarger, president of the Community Development Foundation (CDF) in Tupelo, said the future is bright for the auto industry in the South in part because of the population centers from North Carolina, Florida and Texas — some of the fastest- growing states in the country. Having factories located in the region to meet demand for new vehicles is more cost effective from the standpoint of shipping costs than factories located elsewhere in the country.
Lee County has teamed together with Union and Pontotoc counties in a regional alliance to develop and engineer a site near Blue Springs that will be between 1,500 and 2,000 acres.
Rumbarger said the Tupelo area has a lot going for it:
• It is the number one manufacturing county in the State of Mississippi based on the number of people involved in manufacturing, with a little more than 18,000 employed in that field.
• There is an existing workforce trained in plant maintenance and operations.
• It is located near Memphis, a major metropolitan area.
• There are good railroad and highway transportation corridors.
• It is highly non-union in its workforce composition. Rumbarger said there are only a couple of threats to growth of the auto industry in the South.
“One is if unions ever get a foothold in the auto sector in the South,” he said. “And the other is the winds of the national economy over the years. Cars typically bring us and take us out of national recessions. If you track vehicle sales per individual over the past 50 years, when car sales are good, the economy is good. When car sales are poor, the economy is poor. Cars usher us in or take us out of recessions.”
Rumbarger said the issue with unionization is not just about wages, but flexibility in manufacturing. In non-unionized assembly plants, it is common for employees to spend only a few hours at a time doing one job before switching to another.
“One person in that plant can work a couple dozen jobs,” Rumbarger said. “In a traditional union environment, that is difficult to accomplish. That gives tremendous flexibility in production control. Union benefits are also a big issue. There are huge pension requirements for the Big Three automakers, while the oldest workers in the South have only been on the job for 20 years, so the pension benefits aren’t needed as much.”
Vicksburg: location, location, location
Vicksburg also has transportation and geographic amenities in its favor. It is located halfway between Atlanta and Dallas on the I-20 corridor. Jimmy Heidel, director of the Vicksburg-Warren County Economic Development Foundation, said with Toyota in San Antonio, General Motors in Shreveport, Nissan in Canton and Mercedes, Honda and Hyundai in Alabama, I-20 might soon become known as ‘The Automotive Corridor.’”
“I don’t think there is any question that I-20 is becoming the automobile corridor of the future,” Heidel said.
The only rail crossing on the Mississippi River between Memphis and Baton Rouge is at Vicksburg, which has a 1,296-acre industrial park. There are already two major automotive parts manufacturers located at the Ceres Research and Industrial Interplex, CalsonicKansei and Yorozu Automotive Mississippi. Heidel said that Calsonic and Yorozu are finding success in Vicksburg and he predicts similar success for others that decide to locate in the area.
Research center at Starkville
With the Center for Advanced Vehicular Systems (CAVS) based at Mississippi State University (MSU), Starkville is also an attractive location for possible automobile plants. Research at CAVS is aimed to improve design and manufacturing in order to reduce costs for producing automobile components while making them safer, easier and faster. The Research and Technology Park at MSU is also considered a big advantage, as well as the Center for Manufacturing Technology Excellence, which is co-located with MSU on East Mississippi Community College’s branch campus in Mayhew. The workforce training center provides a wide range of skills training programs.
“We’re so fortunate in Starkville to have those things in our backyard, even though they are advantages to the entire state — not just Starkville,” said David Thornell, president and CEO of the Greater Starkville Development Partnership. “If you look at the whole Southern U.S. region, with Toyota announcing in San Antonio and the tie with all the automobile plants in Atlanta, in Mississippi we have an ideal location. There is a lot that is in our favor right now. It has been speculated that Mississippi will be the next site for a new automobile assembly plant. We have a great team at MDA and a governor with marvelous connections to put Mississippi on the radar screen for those companies.”
Starkville’s geographic location within a 1.5-hour drive of Jackson, Memphis and Birmingham is also considered a plus, particularly for regional distribution centers. Thornell said the city’s new $110-million bypass is opening soon, and Highways 25 and 82 are being four-laned, projects expected to be complete by the fall.
“That is going to help us be more convenient to the auto assembly plants around us,” Thornell said.
Contact MBJ contributing writer Becky Gillette at email@example.com.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info