Kansas to get 7E7 Work

Boeing officials confirmed in late November that the aviation giant will build the flight deck and part of the fuselage of the new 7E7 Dreamliner at its facilities in Wichita. The 7E7 is Boeing's newest jetliner and is expected to be flown for the first time in 2008. Kansas approved a $500 million bond to lure the assembly factory for the new jet to Wichita. No decision on an assembly facility has been made, however.

$320M for Scripps

The only incentive packages in economic development history exceeding $300 million given out by Southern states were offered to automakers over the last 10 years. That's changed. The Florida Legislature approved $320 million for California-based Scripps Research Institute, the huge biotech concern that announced this fall it is building a 350,000-square-foot facility in western Palm Beach County. Palm Beach County is adding an additional $200 million to Scripps in the deal. The deal represents what is the largest incentive package given to any company in the South's history.

Atlanta Making Big Comeback in Job Creation

For most of the 1990s, Atlanta officials touted their market as No. 1 in the nation for job creation. That ended with the economic downturn. In fact, in 2001 and 2002 Atlanta lost more jobs than most major markets in the U.S. Yet, from August 2002 to September 2003, Atlanta led all other major metros in the U.S. with 65,700 new jobs created.

Chinese Economic Development Delegation Visits Vicksburg, Miss.

A Chinese delegation led by Jiangsu Province's new Vice Governor, Zhang Weiguo, visited Vicksburg, Miss. in the fall to, among other things, understand regional development strategies centered around rivers in the U.S. Vicksburg is located on the Mississippi River. Officials in Jiangsu Province are focusing on major economic developments on the Yangtze River corridor and have singled out Vicksburg as a model for economic development on a major U.S. waterway. In addition to learning about Vicksburg's success at waterway development, the delegation met with businesses in the South to discuss investment by Chinese companies in the U.S.

Georgia Governor Rejects $500M for Atlanta Sewer

Officials say it is going to take $3 billion to fix Atlanta's chronic sewer problems. Georgia Gov. Sonny Perdue recently rejected a plea by Atlanta officials to chip in $500 million over 10 years toward basic infrastructure improvements in the South's fourth-largest market. The city of Atlanta is on the hook for the $3 billion in improvements. But only 14 percent of the Atlanta MSA's total population lives in the city. As of now, those 450,000 residents could foot the $3 billion bill for the sewer improvements themselves. If that happens, expect a large outmigration from the city of Atlanta to suburbs that are already overcrowded to serious levels. Could we be seeing the beginnings of a dying city, much like that of the cities (not metros) of Detroit and St. Louis?

TVA Approves Millions in Tax Payments to Southern States

The Tennessee Valley Authority is paying state and local governments in the South a record $329 million in tax payments for the 2003 fiscal year. The federal utility has been making tax equivalent payments to states in the South since its inception in 1933. The payments are based on electric power sales and TVA owned property in seven Southern states. Tennessee, where TVA provides the most power of any Southern state it operates in, is receiving about $200 million of that $329 million this year. Alabama will receive over $77 million. Knoxville, Tenn.-based TVA is the nation's largest public power producer and receives no federal tax assistance.

Alabama Looking at Hyundai Construction Workers' Home States

Officials with the state of Alabama are looking into reports that too many out-of-state workers are helping build Hyundai's auto assembly plant south of Montgomery. The investigation was prompted by an Alabama newspaper report that of all construction worker automobiles parked in the construction lot on a day in November, about 40 percent had out-of-state license plates. Agreements were made with Hyundai and the state to use a certain amount of Alabama-based labor in the construction of the massive plant.

Toyota Takes New Approach to Construction Hiring in San Antonio

Toyota officials have instructed building contractors for its new pickup truck plant in southwest San Antonio to hire all qualified workers it can find in the San Antonio 12-country metro area before it looks elsewhere in Texas for labor. The Japanese automaker has also set a goal of 20 percent worth of construction contracts to minority builders. Over 2,000 laborers are expected to help construct the $800 million assembly plant, which will open in 2006. Officials with Toyota want to hire as many workers in San Antonio as possible for the plant's construction. The city of San Antonio and the county where the plant is located, shared equally with the state in the incentive package given to Toyota. Usually, the state provides the lion's share of incentives for projects the size of automotive plants. Giving San Antonio-based workers a better chance at landing jobs on the construction of the plant is a way Toyota is thanking local San Antonio governments.

Maryland Launches Raid Radio

The Maryland Department of Business and Economic Development has begun a radio advertising campaign in New York, New Jersey, Chicago and Boston. The radio ads tout Maryland's existing industries, including Toyota Financial Services, Citicorp among others. The ads promote Maryland's business climate for financial services and high-tech industries.

First Toyota Supplier Announces in Texas

Tasus Corp., an Indiana-based supplier of plastic injection molded products for the automotive industry, has announced it will buy or lease a manufacturing facility near Toyota's plant being built in San Antonio. Company officials maintain that a handful of markets in Central Texas remain in the hunt for the 100,000-square-foot, 150-employee facility including Pflugerville and Georgetown, both suburbs located north of Austin.

Big Challenge for Kannapolis, N.C.

For almost a century, downtown Kannapolis, located in the Charlotte metro area, was home to Pillowtex Corporation's headquarter operations. In fact, Pillowtex facilities made up almost the entire central business district of Kannapolis. When Pillowtex disolved operations in Kannapolis and elsewhere in the South, Kannapolis' downtown became a ghost town. Now city leaders are facing a challenge many other smaller cities in the South that have experience large closures are facing: what to do with large, empty buildings in their central business districts.

Two Southern States Land on Milken Tech Report

Maryland and Virginia are the only two Southern states to rank in the top 10 in the recently published Milken Institute's Science and Technology Index. Massachusetts, Colorado and California were at the top of the ranking respectively and Maryland and Virginia ranked fourth and fifth respectively.

College, Companies to Market 1,000 Acres on I-85

Three Gaston County, N.C. yarn companies and Belmont Abbey College are jointly marketing over 1,000 acres on Interstate 85 that they collectively own for future industrial, residential and commercial use. Gaston County is located just west of Charlotte near the South Carolina state line. The group has hired Dallas-based Staubach Company to market the land, which features over three miles of I-85 frontage.

Editorial

Our Count: 73 Major Factories Closed in Rural South

So far this year (Jan, 1, 2003 to October 27, 2003), the rural South has seen 73 major plant closures of 100 jobs or more. What's significant about that figure? It equals the total number of major plant closures in the Rural American South in all of 2002. In other words, plant closures in rural towns and counties throughout the South and probably in other regions are increasing, not decreasing as some would want you to believe. Yet, optimism reigns for 2004.

The good news in this NAFTA-generated loss of jobs and industry is that of those 146 plants that shuttered their doors from Jan. 1 2002 to Oct. 27, 2003, 113 came from the textiles, apparel, furniture/wood products or food products industries. In other words, most of the closures are in a handful of industries, almost all of which are low-wage industries.

In comparison, currently there are almost 2,000 automotive industry-related factories in the South employing 100 workers or more. Of those, only five have closed so far this year and three closed last year. Most of those assembly and supplier plants are operating in the rural South.

If the fact that a mere eight of the region's 2,000 major automotive industry factories closed during a tough two years isn't enough to convince auto industry execs that the South is the place to operate in the U.S., then nothing will. Furthermore, if that data doesn't convince leaders in the rural South to focus like a laser on the automotive industry, then nothing will, as well.

Mike Randle (mike@sb-d.com)

DCI Names Best Business Climates

Texas has been ranked the No. 1 business climate in the U.S. by Development Counsellors International, a New York-based consulting firm. Following Texas this year is North Carolina and South Carolina. DCI ranks state business climates each year by polling executives of companies with annual revenues of more than $100 million.

Site Selection Names Best State Business Climates

North Carolina has the best state business climate in the U.S. according to Site Selection magazine. The Tar Heel state was followed by Michigan, Tennessee, Ohio, Virginia and Texas. Rounding out the top 10 were Georgia, Illinois, South Carolina and Florida (Ohio and Virginia tied for 4th place). Other Southern states in the Atlanta-based magazine's top 25 best state business climate ranking include Alabama and Kentucky (tied for 12th), Mississippi (15th), Louisiana (17th), Arkansas and Oklahoma (tied for 19th), Missouri (23rd) and Kansas (25th).

DHL Latest Big Company to Relocate HQ to the South

Rubbermaid, Philip Morris, Fidelity, R.R. Donnelley and Louisiana Pacific are just a few of the high-profile companies that have announced this year they are relocating their headquarters from outside the South to the South. Add DHL to that mix as well. The small package carrier, with headquarters in Brussels, Belgium and a division of the German postal service, is relocating its North American headquarters from Seattle to South Florida.

Louisiana-Pacific Picks Nashville for HQ

Louisiana-Pacific is the latest large corporation to relocate its headquarters to the South. The building material supply company is relocating its headquarters from Portland, Ore. to Nashville within the next year. The company chose Nashville over Charlotte, Jacksonville and Richmond. In a related case, Charlotte will lose its existing LP sales and marketing unit, which employs about 50 workers. That department is headed to the new Nashville headquarters.

South's Small Businesses Show Most Optimism

Small businesses in the South have shown the most optimism about the economy over the next six months in another study done by American Express. According to the study, 66 percent of small business owners in the Midwest were upbeat about the current economy, while 63 percent felt the same way in the Northeast. In the West, that optimism was at 71 percent. But in the South, 80 percent of small business owners were bullish on the economy.

Georgia Opening Office of International Protocol

Atlanta and South Florida are in a tight race to secure the headquarters of the Free Trade Area of the Americas and Georgia Gov. Sonny Perdue has come up with an idea that may swing the deal in his favor. The Peach State is creating an office of international protocol that will provide assistance to foreign leaders who visit or conduct business in the state. The new facility will serve as a central location for international officials and will assist them with various arrangements during their stay.

North Carolina DOT Wants Tolls on I-95

Interstate 95, one of the nation's busiest roadways and the primary north-south route on the East Coast, may get some new tollbooths in the Tar Heel state. The North Carolina Department of Transportation has made a request with the Federal Highway Administration for permission to charge tolls on Interstate 95 to pay for improvements made on the road. North Carolina has already spent about $3 billion in the last 10 years on I-95. The request asks that six toll centers be built on I-95 that could charge as much as $3 each.

Study Claims Wichita Has Easiest Commute

American City Business Journals recently completed a study on commutes in U.S. metros. The study found that Wichita, Kan. has the easiest commute of any mid-size or large city in the country. The ACBJ Commuting Ease Index compares each metro's number of workers with short commutes to those with long commutes (45 minutes or more). The five worst commutes in the study, regardless of market size, were New York, Washington-Baltimore, Atlanta, Chicago, Picayune, Miss. (outside New Orleans) and East Stroudsburg, Pa.

Magazine Cites Savannah

Expansion Management magazine recently named Savannah, Ga. the No. 1 distribution and logistics location in the nation. The magazine based its rankings on data derived from the U.S. Bureau of Transportation Statistics, Bureau of Economic Analysis, Federal Aviation Administration and the Federal Highway Administration among others. Criteria used in the study included transportation infrastructure, road conditions, rail to highway connections, cargo capabilities and interstate highways.

Arkansas Lands Second Major Supplier This Year

Before Toyota put Arkansas on its site search map last year, the automotive industry did not exist for the most part in the Razorback State. But since Toyota chose San Antonio over Marion, Ark. for a pickup truck plant, the state has begun to create some momentum in the auto sector. Following a major supplier announcement by Dana Corp. in Osceola, Ark. earlier this year, Sakae Riken Kogyo Co., a Japanese supplier, announced a $15 million, 250-employee plant in Wynne. Wynne, Ark. is located about an hour northwest of Memphis.

Top 20 Family-Owned Businesses in the South

Company/Family Revenues Headquarters

1. Wal-Mart (Walton) $244.5 Bentonville AR
2. Tyson Foods (Tyson) $23.3 Springdale AR
3. Mars (Mars) $17.0 McLean VA
4. Publix (Jenkins) $16.0 Lakeland FL
5. General Dynamics (Crown) $13.8 Falls Church VA
6. Anheuser-Busch (Busch) $13.6 St Louis MO
7. Winn-Dixie (Davis) $12.3 Jacksonville FL
8. H.E. Butt Grocery (Butt) $9.9 San Antonio TX
9. Cox Enterprises (Cox) $9.8 Atlanta GA
10. Marriot International (Marriot) $8.4 Washington DC
11. Clear Channel (Mays) $8.4 San Antonio TX
12. Dillard's (Dillard) $7.9 Little Rock AR
13. JM Family Enterprises (Moran) $7.8 Deerfield Beach FL
14. Enterprise Rent-a-Car (Taylor) $6.5 St Louis MO
15. Dollar General $6.1 Goodlettsville TN
16. Danaher Corp $4.6 Washington DC
17. Carnival Corp $4.4 Miami FL
18. Hallmark Cards $4.2 Kansas City MO
19. Murphy Oil $4.0 El Dorado AR
20. Milliken & Co $3.6 Spartanburg SC

Source: Family Business Magazine. Revenues in billions (that's with a "B"). Note: The degree of family control and involvement in the companies ranked above varies, but all companies on the list have either a single family controlling ownership, members of the family are currently active in top management or the family's involvement extends over more than one generation.

Editorial

Lost Manufacturing Jobs Vaporized Forever in the South? Nah.

But in other U.S. regions, that could be the case.

You've heard it from more than one economist. You've read such things as "it's pretty bleak out there and those manufacturing jobs aren't coming back." Yes, tens of thousands of U.S. manufacturing jobs have gone offshore just this year alone. Unfortunately, the majority of the manufacturing jobs lost in the U.S. this year have come from the South and its rural regions have felt the brunt of the impact. But that's only because the majority of manufacturing jobs in the U.S. are located in the South, specifically the rural South, or counties with less than 100,000 in population.

This bloodletting continues a trend that started in the late 1990s, or when the U.S. dollar rose to value-heights not seen in decades. But before we make a believable argument that a good portion of those manufacturing jobs lost in the last five years will eventually come back, and to the rural South in particular, let's look at a few facts:

1. From 1991 to 1998, over 100,000 net manufacturing jobs were created in the rural South alone.
2. During that same time, rural factory jobs jumped over 4 percent in the region.
3. Nearly half of all manufacturing job losses in the South since 1/1/01 were the result of plant closures, not relocations offshore. Plant closures indicate a bad economy.
4. If you are a prolific reader, you could easily believe there are no manufacturing jobs left in North Carolina. Nothing could be further from the truth. The Tar Heel State, hit harder per capita than any other state in the South, has lost nearly 100,000 blue-collar jobs since 2000. Yet, that is but 12 percent of its total and it should be noted that about 60 percent of those jobs lost came from one industry sector -- textiles and apparel.

It's our opinion that those economist who have been quoted as saying "those manufacturing jobs aren't coming back" are all wet in one very important -- at least for us -- category. Yes, we agree those manufacturing jobs lost in the West, Midwest and the Northeast since 1998 may not come back. But they will come back, in waves, in the American South. Here's why:

1. The American South is the least-expensive region in which to manufacture in the largest consumer nation, by far, in the world.
2. The Rural American South is the least-expensive location in which to manufacture in the most active manufacturing region in the largest consumer nation, by far, in the world.
3. The automotive industry, especially foreign automakers, will continue to locate in the American South at numbers never before seen. Their suppliers, by the way, prefer rural locations, in this case, rural South locations.
4. Let's face it, the economic downturn of the last three years is more to blame than the prospects of cheap offshore labor for manufacturing job losses, not only in the U.S. as a whole, but in the South in particular.
5. A growing economy, like that found in most of the 1990s, will bring manufacturing jobs back to the South, but not to other high-cost areas of the country such as California, parts of the Midwest and almost all of the Northeast. Yes, in those regions, "those jobs aren't coming back."
6. High-end manufacturing from foreign companies will continue to develop in the American South, especially when the recovery turns to recovered.
7. For most manufacturers, it's cheaper to make their products in the U.S. if indeed it's U.S. customers they are selling to.

As you can see, we are bullish on manufacturing in the South. But of all the reasons manufacturing jobs will come back to the South, reason No. 1 is paramount. We are the largest consumer nation in the world, and manufacturers will always find the most cost-effective place in this nation to manufacture their products. And the South is that place.

More Manufacturing Jobs Lost in China than in U.S.

A report from Alliance Capital's Global Economic Research Department claims that more manufacturing jobs have been lost in China than in the U.S. since 1995. The report revealed that 11 percent of U.S. manufacturing jobs were lost between 1995 and 2002. In comparison, 15 percent of China's manufacturing jobs have been lost during the same period.

"Project Music" Could be 2,000-Job Mega-Deal

Atlanta seems to be the focus of a site search from a company that could bring 2,000 jobs to the metro's northern suburbs. Project Music is potentially a huge deal from an unnamed company, one that could be another relocation. To date, the South has garnered more headquarter relocations from outside the region this year than any year since the early 1970s. Some of those include Fidelity, Rubbermaid, Philip Morris, Louisiana-Pacific and DHL.

Oklahoma City Recruiting Houston Labor

Bad blood must be spilling in Houston as companies in Oklahoma City are actively recruiting workers in the Texas market. Oklahoma City energy companies are successfully luring the skilled workers with attractive relocation packages, perks and promises of a better lifestyle such as 15-minute commutes as opposed to 45 minutes to an hour in Houston.

Recovery Without Job Creation - True Almost Everywhere But Florida

In mid-October, Gov. Jeb Bush announced Florida's 18th straight month of positive job growth. In fact, from August of 2002 to August of 2003, the Sunshine State gained a positive net of nearly 100,000 new jobs. Currently, Florida's unemployment rate is about one-percentage-point below the national average.

Atlanta MSA, an Expanding Monster

The federal Office of Management and Budget has added a record eight counties to the Atlanta Metropolitan Statistical Area. Now called officially the Atlanta/Sandy Springs/Marietta, Ga. MSA, the area encompasses 28 counties, 4.5 million Southerners and 8,379 square miles. Atlanta's MSA now extends to the west all the way to Alabama border, to the north almost to Tennessee and to the east within two counties of South Carolina.

Tampa Bay Cited in Real Estate Study

Sperry Van Ness recently named Tampa as the nation's best market to buy office real estate and second-best for industrial property. Atlanta came in second in the office category and Dallas was No. 1 in the industrial real estate sector.