May 15, 2006

Honda to Build Another U.S. Plant

As we predicted almost a year ago, Honda plans to build another assembly plant in the U.S. -- its sixth -- with a planned opening date set for 2009. The only surprising thing here is that the Japanese automaker didn't announce another expansion -- and last -- of its Alabama plant that produces minivans and SUVS before a new plant search began. The Japanese newspaper Nihon Keizai reported May 15 that the plant will eventually produce 300,000 vehicles a year, which is similar to the current size and production level of Honda's Alabama plant. Honda has room to expand its Alabama plant one more time and we have reported that shortly after that announcement is made, the Japanese automaker will officially be in a site search mode for another plant in the U.S. Apparently, Honda officials didn't want to follow our script exactly. For more information on the Southern Automotive Corridor, go to www.SouthernAutoCorridor.com.

Some Huge Deals Under Negotiation in Louisiana and Mississippi

Rumors are swirling in economic development circles that there are some massive investment projects about to be announced in Louisiana and Mississippi in areas affected by Hurricane Katrina. The Gulf Opportunity Zone Act, a federal law enacted in December of 2005 that features tax credits, accelerated depreciations and other incentives to locating industry in the regions affected by the hurricane season of 2005, may be the driving force behind the deals. One of the projects rumored to be announced exceeds several billion dollars in investment.

Forbes Cites Southern Markets

Forbes published its annual feature on the "Best Places for Business and Careers" and six of the nation's top metros are Southern markets. Raleigh, N.C. placed second in the ranking and Houston, Knoxville, Nashville, Durham, N.C. and Fayetteville, Ark., all made Forbes' top 10. Other markets in the South cited in the magazine's 25-best include Oklahoma City, Huntsville, Atlanta, D.C./Northern Virginia, Lexington, Ky., Little Rock, Asheville, N.C. and Dallas.

Southern Markets Dominate Job Growth List

Business 2.0 magazine's recently published top 10 list for major market job growth included seven markets in the South. Las Vegas topped the top 10 and Riverside, Calif. and Phoenix made the top 10 from outside the South. Orlando, Austin, Jacksonville, Tampa-St-Pete, Dallas/Fort Worth, Charlotte and Atlanta made up the rest of the magazine's top 10 markets for job growth.

Migration to the South Slows

In the last four decades millions of Americans have relocated to the South. Since 1960, approximately 14 million people moved from the Midwest, Northeast and West to Southern states. According to the U.S. Census Bureau, the South averaged a net inmigration of 396,000 people annually between 1990 and 2000. Newly published reports by the Bureau show that average dropped in the first four years of this decade. Between 2001 and 2004, the South had an annual net inmigration average of 371,000 people from other regions of the U.S. Florida was by far the location of choice in the South, with an average of 190,000 people moving to the Sunshine State in each of those four years. That total represents more than half of the South's total net inmigration. Florida averaged an annual net inmigration gain of 112,000 persons between 1990 and 2000.

A Brief Update on Florida's One-Year-Old Higher Minimum Wage Law

A year ago Florida lawmakers approved a bill that raised the state's minimum wage to $6.15 an hour. A study done by Florida International University in conjunction with the University of Chicago shows no negative economic effects from the minimum wage increase. Minimum wage industries, such as those in the tourism sector, continue to perform well, the state's unemployment rate remains very low and no indication of inflation sparked by the wage hike has been found in Florida by the two universities that conducted the study.

Forty-Two Percent of Nissan HQ Employees Relocating to Tennessee

Nissan reported in late April that 42 percent of its 1,300 employees in Southern California will make the move to the Nashville metro when the company officially relocates its North American headquarters this summer. The Japanese automaker has received more than 30,000 resumes from people who hope to fill the 700 additional jobs that are expected to be created within the next two years. Nissan already employs about 8,000 workers in middle Tennessee, including over 5,000 at its assembly plant in Smyrna, Tenn.

Huber Expanding in Georgia

Huber Engineered Woods is investing about $200 million in an oriented strand board facility near Swainsboro, Ga. The Charlotte-based company is a subsidiary of J.M. Huber Corp. The deal is expected to create about 150 new jobs.

Alabama-Based Food Processor Relocating Plant from Illinois to Kentucky

Birmingham-based Gourmet Express announced in May it is relocating its food processing plant from Gridley, Ill., to an existing 312,000-square-foot facility in Greenville, Ky. The company is investing about $7 million in the deal, which will create 200 new jobs.

The Specs on Samsung's Massive Chip Plant Officially Announced in Austin in April

1. Investment: $3.5 to $5 Billion

2. Product: DRAM memory chips on 300-millimeter wafers

3. Employment: 900 jobs at an average annual salary of $63,000

4. Incentives to Samsung: About $250 million

Big Dog Relocating to North Carolina

California-based Big Dog Holdings, a clothing manufacturer, is moving its primary distribution operations to Lincoln County, N.C., located in the Charlotte area. The company is investing $10 million in a 229,000-square-foot distribution center. The project will create 100 new jobs.

Georgia Officials Sign Telework Law

A new law signed by Georgia Gov. Sonny Perdue in late April will give tax breaks to employers in the Peach State that let employees work at home. The telework legislation will give employers tax breaks of up to $1,200 per employee for work-at-home expenses in years' 2008 and 2009. The new law is designed to improve the quality of life of certain employees, improve air quality and reduce traffic, especially in the Atlanta metro.

Reports Say Ford, Toyota Searching for Plant Sites

Ford officials announced in late April the company may build a new assembly plant in North America that will focus on lower operating costs. Officials with the automaker admitted they prefer a site in the U.S., but would not rule out locations in Canada or Mexico if U.S.-based unions do not cooperate in reducing labor costs. Another story published in late April indicated Toyota is looking to build another assembly plant in the U.S. The New York Times reported that sites in Arkansas, Tennessee, Virginia and North Carolina are under consideration. Note to the New York Times: For five years now Toyota has constantly been looking at sites to build new factories in North America. The Japanese automaker is not looking at sites in the South for an assembly plant. They are looking at sites in the Southern Auto Corridor and elsewhere in the U.S. to build several more facilities. In fact, we would not be surprised if Toyota's plans include three new assembly plants in the U.S. within the next five years. For more information on Toyota and the Southern Automotive Corridor, go to www.SouthernAutoCorridor.com.

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