August 15, 2006

QUIZ

The Southern and Western regions of the U.S. have dominated population increases in this country for years. The Census Bureau predicts that the population of the U.S. will reach 300 million some time in the fall 2006 quarter. Currently, almost 39 percent of residents in the U.S. live in the South. The Census recently published a prediction on U.S. regional population in the year 2030. By adding the projected Southern and Western regional population increases, what is their combined total of the U.S. population base expected to be in 2030?

(a) 55% (b) 77% (c) 54% (d) 65%

(Scroll down for answer)

Wages in South Remain Lower than in Other U.S. Regions

Talk to some site selection consultants these days and you might hear that the gap between employee compensation in the South compared to other U.S. regions is narrowing, meaning the South is less competitive in the ever-important cost factor. In an effort to dispell that myth, we came up with the latest data provided by the Bureau of Labor Statistics on private employer costs per hour for employee compensation in the West, Northeast, Midwest and South. Including wages, salaries and benefits the results are as follows:

Northeast: $28.75 per hour
West: $26.56 per hour
Midwest : $24.65 per hour
South: $22.35 an hour

By doing the math, the additional labor costs incurred by a company with a 500-employee operation for just one year among the three other U.S. regions compared to the South are as follows:

Northeast: + $11.7 million
West: + $7.7 million
Midwest : + $4.2 million

Magazine Reports the South Dominates in Worker Training

Expansion Management magazine recently released its 8th annual survey of corporate site consultants regarding the nation's best work force training programs and the American South again was well represented at the top. Alabama was ranked No. 1 for its state-sponsored worker training program for the second time in three years. Following Alabama was Georgia , Texas , North Carolina and South Carolina , giving the South a sweep of the five-best worker training programs in the U.S. Placing in the publication's top 10 were Southern states' Tennessee (7th), Kentucky (8th) and Florida (10th). Colorado and Arizona were the only states outside of the South to rank in publication's top 10.

Fidelity Investments' North Carolina Deal will be Larger than Announced

Fidelity Investments is the latest financial services firm to announce a significant deal in the South. Fidelity confirmed in August what many have known for six months; that the Massachusetts-based company will locate a huge, $100 million campus in the Triangle region of N.C. But when Fidelity announced this summer that 2,000 jobs would be created in the Raleigh-Durham area, we thought the company was low-balling. Don't be surprised if that total tops 5,000 at some point within the next four years.

Toyota Begins Trial Production in Texas

Japanese automaker Toyota has begun production of its newly designed, full-size Tundra pickup truck model at its new San Antonio assembly plant. While assembly of the trucks has begun, the products being made are not for sale as the company will undergo trial production for at least the next 90 days. Employees at the plant and at more than 20 parts suppliers located at an on-site supplier park are expected to help Toyota deliver the first Tundra to dealers in January of 2007.

Honda Expands in Alabama

Honda is expanding its Alabama operations again. On August 14, officials with the Japanese automaker revealed a $40 million expansion of the company's engine manufacturing facilities that will result in at least 20 new jobs. Honda recently completed a $70 million expansion of its engine facilities in east Alabama , located next to its assembly operation in Lincoln that employs almost 5,000 workers. The Odyssey and Pilot Honda models are made at the Alabama auto works.

Call Center Opening in Arkansas

ACCENT Marketing Services announced recently that the company has selected Hot Springs , Ark. , for a new 450-employee inbound contact center. The company will provide services for a large telecommunications company.

ThyssenKrupp to Locate Plant

German steel-maker ThyssenKrupp has announced plans for a new automotive-grade steel plant. The location of the plant has not been made as of this deadline, however, it has been confirmed by several sources that sites in Arkansas , Louisiana and Alabama are being considered.

Novartis Picks N.C. for Flu Vaccine Manufacturing Facility

In what was one of the highest profile life sciences deals in a couple of years in the South, Swiss pharmaceutical manufacturer Novartis chose Holly Springs , N.C., for a new $268 million flu vaccine manufacturing facility. Novartis picked the site, located southwest of Raleigh , over a site in Athens , Ga. Novartis Vaccines and Diagnostics, a subsidiary of Novartis AG, will make flu vaccines at the new plant from cell cultures. The company expects to hire about 350 workers at the new vaccine plant with an average annual salary of over $50,000.

Editorial

Austin 's Comeback gets our Official Stamp of Approval

Some time in 1999, I made a call to the economic development group that is responsible for job generation in the greater Austin , Tex. , area. Of course, I make more than 5,000 calls a year to individuals who are responsible for economic development in their state, multi-county region, county or town in the South and I have done that every year since 1991.

Yet, that one particular call I made in 1999 stood out. The person on the other end of the line representing the Austin-based economic development agency asked me, "Is this about economic development?" She said, "We don't have to practice economic development here in Austin . It just comes."

Some time in 2002 and tens of thousands of lost jobs later, I thought about that statement of arrogance made three years before. In the height of the recession, economic development officials in the capital of the South's largest state were staggered, picking up the pieces of an economic development program that admittedly wasn't being practiced.

Things are once again different in Austin , Tex. In late July, the Texas Workforce Commission reported that almost 27,000 new jobs were created in the Austin-Round Rock region in just the last year, or more about 12 percent of all new jobs created in Texas during the same time period. The 27,000-job total is an incredible number, larger than what many states in the South create in any given year. We congratulate officials in Austin , Round Rock, Georgetown , Bastrop and other cities in the region for such a remarkable comeback.

Let's just hope Austin 's great comeback doesn't give the big head to economic development and elected officials in the Texas capital. After what occurred in the last recession, we don't think it will.

Mike Randle
mike@SB-D.com

Oreck Picks Tennessee

New Orleans-based Oreck Corp., is setting up its second U.S. manufacturing operation in a 310,000-square-foot facility that was vacant in Cookeville , Tenn. The vacuum cleaner manufacturer purchased the former TRW Vehicle Safety Systems plant in Cookeville . The deal is expected to create about 100 new jobs.

No Stopping Atlanta Growth

The 10-county metro Atlanta region grew faster in the last year than in the past five years according to the Atlanta Regional Commission. Metro Atlanta 's population is nearing 4 million, with 3,925,400 residents as of August 10, 2006. The South's fourth-largest market saw 111,700 new residents between April 2005 and April 2006, topping an average of 82,600 additional residents between 2000 and 2005. Metro Atlanta had just 1.89 million residents in 1980.

Big Call Center Announced in Lafayette , La.

NuComm International, a privately-held, Ontario-based provider of customer relationship and contact service center services with over 4,000 employees in North America, has chosen a former retail center in Lafayette , La. , for a 1,000-employee call center. The new center is being placed in space vacated by Service Merchandise at a retail mall in Lafayette .

QUIZ ANSWER

In the year 2030, the South and the West are projected to account for (d), 65 percent of the entire population of the U.S.

Next