Automotive is King in the South!

If Automotive is King in the South, Which Southern States are King of Automotive?

By Lee Burlett

As written in both the SB&D Job and Investment 100, the automotive industry has a stranglehold on the top industry sector position in the South. Let us proclaim what we have proclaimed for three years now, this time with even greater gusto: Automotive is the current industry king in the South and the data found here in our rankings absolutely proves it. The chart below ranks the top 10 industries in the South in calendar year 2003 based on points earned in this year's SB&D 100.

SB&D 100 - Industry Winners - Top 10

As you can see, only three other industries are really even competing with the automotive industry for regional economic dominance. The financial services industry as well as distribution/warehousing invest and hire in the South with regularity. But neither can stand next to the automotive industry and say they're in the same game. Not with a straight face, anyway.

One industry or sub sector that may compete favorably with automotive in the near future is the headquarter category. The South landed more Fortune 500 headquarters relocations from outside the region in one year -- 2003 -- than it did in the last 30 years. If that trend continues, expanding and relocating headquarters could surely compete with automotive in wages paid, jobs created and in capital investment. Fidelity National and Philip Morris are just two of many major corporations that spent hundreds of millions in relocating their headquarters to the South.

While we can imagine a contender to the South's top industry spot, it's the automotive industry that wears the undisputable crown. The growing Southern Auto Corridor (www.SouthernAutoCorridor.com) is the home to many of the largest industrial announcements made in the region over the last decade. But now the automotive industry is placing smaller, supplier-type deals on the SB&D Job and Investment 100 as well as the "just missed deal" lists at a rate not seen since Southern Business & Development first published this ranking in 1993.

What is truly amazing about this industry is the fact that so few automotive plants have closed during the toughest economy since the early 1990s. For example, of the 4,300-some-odd automotive-related businesses that were operating in the Southern Auto Corridor in 2003, fewer than a dozen significant operations shuttered their doors. Because of that incredibly low closure rate, it can easily be determined that the automotive industry in the South is a happy, profitable and growing group.

Where are the automotive deals?

If automotive is king in the South, which Southern states are kings of automotive? The Southern Auto Corridor is a large place, stretching from Texas, Oklahoma and Kansas in the west to Florida, Georgia, the Carolinas, Virginia, West Virginia and Maryland to the east.

By studying the adjoining map that includes icons where automotive assembly sites are located, it's easy to see that the spine of the Southern Auto Corridor, as well as the South itself, is Interstate 65 running from South Alabama all the way up to Louisville. With the data found in this year's SB&D 100, the states in and around that spine continue to garner more auto-related projects than states farther from it. But, with Toyota's Texas announcement in 2003 and the DaimlerChrysler back out in Southeast Georgia, there are indications that the automotive industry is quickly beginning to be a total Southern love affair. That love soon should include the whole body and not just the spine of the American South and the Southern Auto Corridor.

As you can see by the adjoining chart, 14 Southern states landed at least one major automotive deal in 2003. Clearly though, the spine states of Alabama, Kentucky and Tennessee landed the most with 36 of the 57 big automotive deals announced in the South in 2003. The three I-65 states also accounted for 250 points, more than half accounted for by states located away from the spine.

2004 SB&D 100: State Performance in the Automotive Sector