News That You Can Use When You Do Business in the American South

February

QUOTE

"In fact, the auto industry has become such a big catch for the South that economic developers chase after cars like country dogs."

Beth Gorczyca, The State Journal, Charleston, W.V., November 6, 2003

QUIZ

Mexico has benefited from NAFTA, which took effect 10 years ago on Jan. 1, 1994, by (a) 22 million new jobs; (b) 12 million new jobs; (c) four million new jobs or (d) 300,000 new jobs created in the last 10 years by U.S.-based manufacturers that moved operations south of the border.

(scroll down for answer)

Looking for Low Union Membership States? Try the Carolinas

North and South Carolina continued to sport the nation's lowest union membership rates in 2003. South Carolina's union membership rate is 4.2 percent of all employed persons and North Carolina's rate is the lowest in the nation at 3.1 percent. New York and Michigan had two of the highest union membership rates, both topping 20 percent. The automotive industry was the No. 1 union sector with a membership of over 25 percent. Interestingly, no foreign automakers building cars and trucks in the U.S. are unionized. Most of those plants are located in the Southern Automotive Corridor (www.SouthernAutoCorridor.com).

Hyundai's Alabama Facility Three-Quarters Finished

The $1 billion assembly plant being built by Korean automaker Hyundai is 75 percent finished. Hyundai spokesman Bill Lang was quoted in an article published in the Birmingham News on January 30, that the company will meet its deadline to begin mass production of Sonata sedans in March of 2005. The plant will house about 1,000 employees when it begins production and over 2,000 when full production is reached in 2007. In addition to a next generation Sonata, Hyundai will produce a new version of the Santa Fe SUV at the facility. The plant represents the first in the U.S. for South Korea's largest automaker.

Vanguard Car Rental to Bring 700 Jobs to Tulsa

A Florida rental car company could announce as early as Thursday, February 5, that it is moving to Tulsa, bringing 700 jobs with it. Vanguard Car Rental, whose chief executive is Tulsan William Lobeck, is negotiating to move into existing office space in the Tulsa area. Lobeck said in early January that he was considering moving the company's headquarters to Oklahoma, but that the state's "onerous" capital gains tax on individuals might keep his firm in Florida. During the last week of January, Oklahoma Gov. Brad Henry proposed the elimination of all capital gains taxes on Oklahoma-based property. It is not immediately clear if that announcement prompted Vanguard's reported decision to move its headquarters to Tulsa. Vanguard is the parent company of Alamo Rent A Car and National Car Rental and has substantial operations in Boca Raton, Fla. The company is privately held and employs 14,000 people worldwide.

Big Announcement by Auto Supplier in Kentucky

A subsidiary of Magna International, a worldwide supplier of automotive components and systems, will hire as many as 800 workers in Bowling Green, Ky. The subsidiary, Cosma International, made an announcement in December of 2003 that it will build a 900,000-square-foot parts plant in Bowling Green's TriModal Transpark. At the time, no job figures were announced. The 800-job figure and 900,000-square-foot facility represent one of the largest supplier announcements in years in the Southern Auto Corridor.

Ford Scaling Back in St. Louis

Missouri Gov. Bob Holden recently declared the automotive industry one of the state's primary recruiting targets. The official order coming from the Governor proclaiming automotive No. 1 for Missouri took a hit just a week after it was released. Ford Motor Co. announced in late January it would eliminate the second shift and cut about 1,000 jobs at its Hazelwood, Mo. assembly plant. Ford also plans to lay off 200 workers at its Claycomo, Mo. assembly plant near Kansas City. Rumors surfaced in 2002 that Ford would close the St. Louis plant, which makes Ford, Lincoln and Mercury SUVs. While Ford officials have maintained the plant will not close any time soon, it's apparent the next worst thing is about to occur.

First Infiniti SUV Made in Mississippi

Nissan Motor Co. announced "job one" for the new Infiniti QX56, a full-size sports utility vehicle. The first QX56 rolled off the line at Nissan's new plant in Canton, Miss. in late January. The QX56 is the fourth model of five that will eventually be built at the Canton facility. To date, the plant has rolled out the Nissan Quest minivan, Pathfinder Armada SUV and Titan pickup in addition to the Infiniti QX56. The Nissan Altima will be produced at the plant later this year.

Dana Adding 300 Jobs in Kentucky

Dana Corp. is expanding in Elizabethtown, Ky. The auto parts maker is adding 300 jobs to its truck frame plant that serves the Ford assembly facility in Louisville.

AirTran Opening Call Center in West Georgia

Orlando-based AirTran Airways, the growing discount airline, announced in late January it is opening a 200-employee call center in Carrollton, Ga. Officials with AirTran cited the State University of West Georgia, which is located in Carrollton, as a major source of potential employees at the center.

Rayovac Latest Company to Relocate HQ to the South

Madison, Wis.-based Rayovac Corp., a maker of batteries and the Remington electric razor, announced in mid-January it is moving its headquarters to the Atlanta metro community of Sandy Springs. Founded in 1906, Rayovac is the third-largest maker of household batteries in the U.S. and is No. 2 in Europe. Rayovac follows Newell Rubbermaid, which announced it would move its headquarters from Illinois to Atlanta last year.

Textron Announces Big Deal in Mississippi Delta

Textron Fastening Systems, a $1.65 billion business unit of Textron Inc., announced on Jan. 19 that it is locating an automotive parts plant in a 308,000-square-foot vacant building in Greenville, Miss. The deal will bring over 500 jobs to the Mississippi Delta region. The operation will manufacture a broad range of custom-designed specialty threaded fasteners and other precisely engineered fastening and assembly products for its automotive and industrial customers. The project represents a capital investment of $35 million. Textron will supply tier one automotive suppliers in Mississippi and in other parts of the Southern Automotive Corridor. Textron is headquartered in Troy, Mich.

Auto Logistics Concern Moves Processing to Brunswick Port

GLOVIS America, Inc., which processes cars and trucks imported into the U.S. and exported out for Korean automakers' Kia Motors and Hyundai Motor America, is consolidating its port operations from Jacksonville to Brunswick, Ga. The move is expected to create about 400 new jobs in the port city of Brunswick. Many of those jobs will be filled by employees who will relocate from Jacksonville. Brunswick is the fourth-largest handler of automobiles and trucks on the Eastern Seaboard, with Audi, Volkswagen and Land Rover moving their products through the port.

Missouri Governor Touts Automotive

An executive order was signed by Missouri Gov. Bob Holden in late January creating the Missouri Automotive Partnership. The partnership will help recruit automotive-related businesses to the state, as well as conduct research, propose legislation and lobby policymakers to improve the overall economic climate for the automotive industry in Missouri. Missouri is home to domestic automakers' GM, Ford and Chrysler.

Supplier Expanding in NC's Triad

Metzeler Automotive, a manufacturer of window and door seals for the automotive industry, is spending about $8 million to improve its existing facilities in Reidsville, N.C. Reidsville is part of the Greensboro/Winston-Salem/High Point market known as the Piedmont Triad region. The company is adding about 75 jobs. The German company, which opened in Reidsville in 1994, supplies parts to Ford, Chrysler and BMW's facility in Greer, S.C.

Grubb & Ellis Names Atlanta Hottest Office Market

Commercial real estate giant Grubb & Ellis recently predicted in a study that Atlanta will have the strongest demand for office space over the next five years. The forecast is based on potential job creation in the Southeastern market. Currently, Atlanta's vacancy rate for all office classes is slightly above 20 percent, nearly three percent higher than the national average.

Editorial

Automakers in the South Save in Labor Costs

As we reported to you in December, Hyundai will pay its new production workers $14 an hour when its plant opens next year near Montgomery, Ala. But it wasn't until mid-January before Automotive News reported the $14 an hour rate Hyundai will pay. Automotive News noted that only Nissan's Canton, Miss. plant has a lower starting wage, which they reported to be $13.25 an hour (it is really $15 an hour). Representatives of both automakers have said publicly that the wage increases to about $21 an hour after two years.

Other plants in the South pay slightly higher wages for new production workers. BMW and Mercedes pay about $16 an hour to start at their plants in South Carolina and Alabama and new workers at Honda's plant in Lincoln, Ala. receive about $15 an hour.

Since BMW announced in South Carolina in 1992, Southern Business & Development has consistently maintained that cost factors are behind the growth of the Southern Automotive Corridor. Foreign automakers know better than to set up shop in traditional domestic automotive states such as those that make up Midwestern Automotive Corridor. There, United Auto Workers earn $26 an hour on average when they start.

So, say there's a difference of $10 an hour that foreign automakers pay for labor in the Southern Auto Corridor compared to what domestic automakers pay in "Detroit." The following tabulates the savings automakers in the South enjoy in different time frames based on a 3,000-employee assembly plant that operates 100 hours a week:

* Savings per hour: $30,000
* Savings per day: $420,000
* Savings per week: $2,940,000
* Savings per month: $12,348,000
* Savings per year: $153 million
* Savings after five years: $765 million

The above figures are conservative at best. For example, there are 168 hours in a week and assembly plants are manned 24/7. That being the case, a nice round figure of $1 billion saved over five years by foreign automakers on labor costs alone in the Southern Automotive Corridor must be a frightening realization to domestic competitors up north.

Lee Burlett (lee@sb-d.com)

Brach's Moving HQ to Dallas from Illinois

Following Newell Rubbermaid's relocation of its headquarters from Illinois to Atlanta in 2003, candy maker Brach's Confections announced it is moving its HQ to Dallas from the Chicago metro market of Woodridge, Ill. The company has about 1,600 employees with sales of $350 million in fiscal 2003.

ACS Expands in Kentucky

Affiliated Computer Services is adding 500 jobs to its Lexington, Ky. call center operations. The company, which handles millions of calls each year, currently employs nearly 2,000 people at several facilities in Kentucky, including four centers in Lexington.

Trucking Company Hiring 400 in Atlanta

One of the country's largest trucking companies is bringing 400 new jobs to the Atlanta area. Schneider National of Green Bay, Wis., is opening an operations center in DeKalb County, Ga. in anticipation of an expansion in 2004 and 2005 in truckloads in the Southeast. Most of the jobs will come from new truck drivers the company expects to hire.

Kia Official Says U.S. Plant Decision May Come in Two Years

Korean automaker Kia may build its first plant in the U.S. within two years. Peter Butterfield, CEO of Kia's U.S. division, said as much at the Automotive News World Congress that was held in Dearborn, Mich. in early January. Kia sold 237,000 vehicles in the U.S. in 2003 and from Butterfield's comments in various media outlets following the World Congress, it looks as if the automaker would like to cut the noose -- at least publicly -- that ties it to Hyundai, its parent company. Hyundai will open its first U.S. plant in Montgomery, Ala. in 2005 and the site it is building on is large enough for Kia to place a plant there. Yet, Butterfield said if a plant is built in the U.S. it will not be built next to Hyundai's factory in Montgomery. We reported U.S. Sen. (Miss.) Trent Lott's comments made last year, that he believes Kia is the next automaker to announce a factory in the Southern Automotive Corridor and that Mississippi will do everything it can to land it. Our response to Lott's comments were that Kia will not make a decision on a U.S. plant until a year or two after Hyundai's plant is up and running. We also predicted that Kia would look very hard at a site near Meridian, Miss., near the Alabama and Mississippi border on I-20/59.

Editorial

Here's a Prediction: Kia Will Announce its First U.S. Plant in 2006 and We Know Where it Will be Built

Alright, we know predictions aren't exactly journalism in the professional sense. Yet, from what we hear, you sure do love to read our predictions, especially those involving prospective deals in the Southern Automotive Corridor (www.SouthernAutoCorridor.com). So let us try to entertain you with another.

Korean automaker Kia will build a plant in the Southern Auto Corridor (SAC) and it will be announced in the spring of 2006. How do we know that? Well, we really don't. But, not unlike our dead-on predictions over the last dozen years in the SAC involving BMW, Mercedes-Benz, Nissan, Hyundai (that one was so easy), Toyota and Honda, (We admit we missed that one. We picked Honda to land in Opelika, Ala. and they chose Lincoln, Ala.), the information we are receiving points to a Kia plant being built in the U.S. soon. In fact, here are 10 indicators that we have found that convince us that Kia will announce in 2006 and where the plant will be built.

Indicator No. 1: Kia's U.S. sales are climbing and fast.

Indicator No. 2: In January, Kia's U.S. division CEO Peter Butterfield said at the Automotive News World Congress in Dearborn, Mich., that the automaker "might build" its first U.S. plant within two years.

Indicator No. 3: Kia is searching for some autonomy from its parent Hyundai. That being the case, when it does announce it will build its first U.S. plant, don't expect it to be built next to the Hyundai facility currently under construction just south of Montgomery, Ala., even though that Korean automaker just happened to purchase enough land to accommodate a second plant.

Indicator No. 4: Kia is not Hyundai and Hyundai is not Honda, Nissan or Toyota. So, will the growing pup build far from its young mother when both are weak dogs in the yard? No way. If Kia builds in the SAC (Southern Auto Corridor), it won't be next to Hyundai's Montgomery plant, but it won't be far from it either.

Indicator No. 5: U.S. Sen. Trent Lott (Miss.) said with much bravado in the summer of 2003 that Kia is the next foreign automaker to land in the SAC and Mississippi will do what it takes to land it. In fact, Lott claimed Mississippi would land it, end of story. Lott's lost some political power in the last few years, but not enough to keep him from turning a big automotive deal for Mississippi before he hangs up his hat. Rumor has it Lott is hell-bent on the deal.

Indicator No. 6: In 2003, Alabama and Mississippi did something that has never been done before in economic development history. They joined hands in an effort to develop and make more prosperous their border regions, which, for the most part, are rural. No two states have joined together in any kind of economic development effort of that magnitude.

Indicator No. 7: Over 75 percent of automotive deals landing in the Southern Automotive Corridor in the last three years have chosen rural areas.

Indicator No. 8: There is a sense of urgency among federal and state DOT officials to improve U.S. Highway 80 from Montgomery, where the Hyundai plant is, through Selma, Ala. on to Meridian, Miss., which is located on Interstate 20/59 on the border of Alabama.

Indicator No. 9: There happens to be an excellent, flat-as-a-board greenfield site near Meridian and even one on the other side of the border in Alabama that can easily accommodate an auto assembly plant.

Indicator No. 10: History has shown that the last five assembly plants built in the South were built within two miles of an Interstate.

So, what do our indicators tell you about where Kia will build its first North American assembly plant? Circle Meridian, Miss. on the map. Kia will build its first U.S. assembly plant in Mississippi (the new governor better write the check) near Meridian. But Lott was wrong. Kia is not the "next" foreign automaker to announce a plant in the Southern Auto Corridor. That will be a Japanese automaker in late 2005.

Lee Burlett (lee@sb-d.com)

Hyundai Expects More Suppliers in Alabama

The years' 2002 and 2003 saw 15 tier one auto suppliers pick sites in Alabama. Most of those were in rural counties and towns in the state. After a lull in supplier announcements in the fall quarter of 2003, Hyundai officials maintained the rush to 'Bama isn't over. The Korean automaker expects eight more primary parts suppliers to pick Alabama for facilities. The expected total of 23 tier ones will employ 4,000 in Alabama and will essentially be located from the state's most northern counties to its most southern counties.

Nissan's Ghosn Pondering New Plant

Nissan CEO Carlos Ghosn said at the North American International Auto Show in January that he is already thinking about whether to expand existing plants in the U.S. and Mexico or build another assembly facility. Nissan's newest facility, located in Canton, Miss., has not reached full production as of yet and the Japanese automaker's massive facility in Smyrna, Tenn. has expanded numerous times.

Production Increased for Japanese Automakers in 2003

Four of Japan's five largest automakers increased vehicle production in 2003. The only major Japanese automaker to drop production in 2003 from 2002 was Mitsubishi. Honda, Nissan, Mazda and Toyota, which recently overtook Ford as the No. 2 automaker in the world, all increased production last year. Much of Nissan's rise in production came from its new plant in Canton, Miss. that opened in 2003.

Mobile Expands Foreign Trade Zone

The U.S. Dept. of Commerce has approved almost 10,000 acres near the deepwater port in Mobile, Ala. to expand that markets foreign trade zone by more than 10 times its original size. The 1,000-acre Brookley Industrial Complex, a former Air Force base that is located near the port, made up the original trade zone.

Another Korean Supplier Lands in Rural Alabama

Yient Alabama Corp., a South Korean auto parts supplier, announced in early January it would build a $2 million, 25,000-square-foot plant in rural Tallassee, Ala. The tier two supplier will make racks, pallets, carts and automation equipment for tier one suppliers to the Hyundai facility being built in Hope Hull, Ala. The announcement is expected to create 80 new jobs.

Walgreens Building $175M Distribution Center in SC

Walgreen Co. announced on Jan. 7 that it plans to build a new 700,000-square-foot distribution center in Anderson County, S.C. The center will serve 250 stores in eight states in the South and Mid-Atlantic areas. The center is expected to house 450 employees. Walgreens is the nation's largest drugstore chain with 2003 sales topping $32 billion.

West Virginia Cabinet Maker Building Third Plant

American Woodmark, which already operates two large plants in West Virginia that produce kitchen cabinets, is adding a third facility in the state. The company has started construction on a 250,000-square-foot facility in Hardy County, W.V. The deal will create 300 jobs and result in an investment of about $30 million.

Omega Picks Clinton, Tenn.

Omega Cabinetry is taking over the old HomeCrest Cabinetry plant, located in the Knoxville MSA market of Clinton, Tenn. Omega is hiring 150 of HomeCrest's displaced workers and plans to hire an additional 450 workers over a five-year span. Omega has purchased the 200,000-square-foot facility and is expanding it by another 100,000 square feet. Both Omega and HomeCrest are divisions of MasterBrand Cabinets.

MasterBrand Buying Facility in Virginia

MasterBrand Cabinets has purchased the old 5B plant in Henry County, Va. and will turn it into a new cabinet factory. The deal is expected to create as many as 700 employees. MasterBrand has already invested nearly $3 million in the facility.

Editorial

Site Selection and Mac Conway Celebrate 50 Years

If the Top 10 Most Influential Southerners Was a Category in this Year's 10 Top Tens, Mac Conway Would be at the Top of the List

In January, Site Selection magazine, a competitor to Southern Business & Development, celebrated its 50th year in print. McKinley "Mac" Conway founded the publication, at the time titled Industrial Development, in 1954. In the 50th Anniversary Site Selection edition (January 2004), there is an excellent time line showing Site Selection's first 50 years as well as Conway's pioneering economic development adventures in the 1950s, 1960s and beyond.

Some of Conway's accomplishments and ideas outlined in the issue just blew me away. This Southerner conducted the first regional industrial science conference in Winston-Salem, N.C. in 1952. He also conducted the first industrial wastes conference in New Orleans in 1953 that was organized to establish environmental standards for industry, years before the federal government even thought about the issue.

Mac Conway, the former Georgia state Senator, NASA engineer, pilot and current environmentalist, logistics expert, publisher, political consultant, real estate planner, retiree and all-around, smart as hell dude, now lives in central Florida.

Mac, none of your other competitors may give you recognition as the facilitator of economic development, not only in the South and the U.S., but throughout the world, but we will. As we say around our office, "Old man Conway invented it. We're merely adding a few creative touches here and there."

Mike Randle (mike@sb-d.com)

Magazine Ranks Dallas No. 1

Plants, Sites & Parks magazine recently ranked Dallas the No. 1 market in the nation for corporate relocation. The publication surveyed readers by asking them which markets in the U.S. would they most likely expand to. Other markets that ranked high on the survey include Atlanta, Charlotte, Austin, St. Louis and Phoenix.

Nashville Lands Another Headquarters

On the heels of Asurion and Louisiana-Pacific's headquarter relocations to Nashville, another company has announced it is also moving to the Music City. Rockford, Ill.-based Clarcor Inc., a manufacturer of industrial filtration products, announced in January it would move its headquarters to Nashville. The company did not say how many people if any would relocate from Illinois to Tennessee. However, company officials did say they would employ about 75 at the new office facility in Nashville.

Port of Baltimore Sets Tonnage Record

Public terminals at the Port of Baltimore set new records in tonnage handled in 2003. Over seven million tons of cargo was handled at the port in the last calendar year, the highest total since the war times of WW II. Goods that increased tonnage at the port the most included roll on and roll off cargo such as cars, trucks and farm equipment. In fact, in 2003, Baltimore became the No. 2 handler of automobiles in the nation and remains No. 1 in forest products tonnage.

Cheap Textiles Continue to Flood U.S. from Overseas

Offshore textiles arrived in the U.S. in 2003 at an 85% increase over 2002, which was more bad news for domestic firms. Over 50,000 jobs were lost in 2003 in the U.S. textile manufacturing sector, with most of those jobs loses coming from the American South.

Jacksonville Weighs the Weight of Water

Following Tampa Bay's lead, officials with the St. Johns River Water Management District are conducting a study that includes actual sites for the location of a saltwater desalination plant. Jacksonville officials maintain water resources in North Florida remain high, however, 20 years from now, that may not be the case. A desalination plant recently began producing fresh water from saltwater in the Tampa Bay region.

QUIZ ANSWER

January of 2004 marked the 10th birthday of the passage of the North American Free Trade Agreement. Perceptions exist that Mexico, as a result of NAFTA, has robbed many states in the U.S. of millions of manufacturing jobs. Nothing could be further from the truth. Since the passage of NAFTA 10 years ago, manufacturing productivity per hour in the U.S. grew 60 percent faster than in the 10 years prior. Manufacturing wages grew almost 15 percent in the U.S. since NAFTA was passed in 1994. From 1984 to 1994, they grew by a 7.5 percent rate. Over 100,000 manufacturing jobs were created in the Rural American South in the mid-to-late 1990s, the region that has seen more plants close and move to Mexico than any place in the U.S. since the economic downturn started in 2001. But since 2001, more than 500,000 manufacturing jobs have been lost in the rural South. Did they all go to Mexico? Hardly. Since NAFTA was passed 10 years ago only (d) 300,000 jobs have been created by U.S.-based manufacturers in Mexico.

January

North Carolina May Adjust Incentives Again

Since 1996, when the William S. Lee Act was adopted in North Carolina, lawmakers in the Tar Heel State have tinkered with incentives for locating and expanding industry several times. There's nothing wrong with that. After all, economies change -- North Carolina's certainly has -- and as a result, state incentives for industry should as well. In the 1990s, North Carolina officials tried to steer investment and job making deals to its rural regions with a tier-based incentive plan. That's exactly what the William S. Lee Act was designed to do; give out more incentives to companies investing in poorer regions of the state and less to companies investing and hiring in NC's metro areas. At the beginning of this decade, the Act was adjusted with the addition of a "big deal" initiative that was designed to lure large, single investments such as automotive assembly plants. That adjustment included rebates of employees' state wage withholdings during the first few years of operation. North Carolina called that incentive the Job Development Investment Grant program. The program remains in place and is an excellent incentive for large projects. As the year 2004 began, there was talk in North Carolina that lawmakers and economic developers saw a need to adjust state incentives again. In the spring, when lawmakers convene, look for new incentives in North Carolina that will focus on urban economic development and especially on smaller projects of 50 to 100 jobs locating in rural and metros alike.

Houston Metro Running

The nation's fourth-largest city saw the inaugural running of its new light rail system on January 1. The $324 million system is a first for Houston, which has never had mass transit in the form of rail or subway in its history.

Editorial

2004 Prediction: No New Assembly Plants

The Southern Auto Corridor has been incredibly active over the last four years. Automakers' Toyota, Mercedes, BMW, Nissan, Honda, Hyundai, Ford and GM have invested billions (that's with a "b") on new and existing assembly factories in the region in the first four years of the new millennium. Rumor has it that Volvo, Audi, Mitsubishi, Suzuki and Kia will do the same soon. But as the New Year breaks the gate, we predict the automaker frenzy seen in the Southern Auto Corridor will slow to simply steady in calendar year 2004. Hear this: no new assembly plants will announce in 2004 in the Southern Automotive Corridor, but two or three or more will break ground in 2005 and 2006.

Yes, rest is needed in every business endeavor (the folks at Southern Business & Development (www.sb-d.com) need it, too, after launching this Web site in January). And rest automakers will do in 2004. But like all massive industries, resting and planning go hand-in-hand. Yep, automakers are planning new plants in the South as I write this. They will make their plans known to all in 2005.

What you will see in 2004 is a steady, but slower stream of suppliers opening up shop in the region, except of course in south Texas where a whole new supplier network will emerge to serve the Toyota truck plant in San Antonio. Suppliers will jostle for new contracts and become extremely picky in their site selection decisions. In other words, they will go where incentives are the best. Yet, again, you won't see an automaker whip out a billion dollar investment for a new plant this year in the SAC.

The western portion of the Southern Automotive Corridor is the next great active OEM region. But then again, so may be the east. The central region, or the spine, which, without question is Interstate 65, will be resting for not only 2004, but 2005 and beyond. Why? Alabama, Tennessee and Kentucky have established huge automotive clusters. While they will remain popular destinations for suppliers, it's unlikely a new assembly plant will locate in any of those three states anytime soon.

Mississippi, Arkansas, Texas, Louisiana, Oklahoma and even Kansas in the western SAC all have a chance to land an automaker in 2005 or 2006. And there are several states in the eastern portion of the corridor that have a chance at landing the big kahuna, as well. All of those states are hungry for automotive and will write the check for the right deals. And if an assembly plant does indeed announce in 2004, which is extremely unlikely, look at two areas: somewhere in the western region of the SAC or somewhere in the eastern region, or away from the "spine." But our prediction is "it ain't gonna happen" until 2005.

Mike Randle (mike@sb-d.com)

Study Shows Defense Industry a $44 Billion Business in Florida

A study done by the University of West Florida's Haas Center for Business Research and Economic Development shows that direct and indirect spending by the defense industry in Florida topped $44 billion in 2002. That figure represents almost 10 percent of the Sunshine State's gross state product. According to the study, of that $44 billion, $21.7 billion was spent directly by the Department of Defense.

Winston-Salem's New Marketing Plan Focuses on Quality of Life

Site selection factors run parallel with changes in the economy. Labor quality was a serious factor in the mid-1990s. Then in the late 1990s, mere labor availability (warm bodies will do) took center state when unemployment rates in many areas of the South fell below two percent. As the economy soured in 2001 and 2002, operating costs took its place as the No. 1 site selection factor (we maintain it has always been the No. 1 site selection factor and always will be, generally speaking, and everything else jockeys for No. 2). The economic development agency representing Winston-Salem, N.C., Winston-Salem Business, Inc., is betting that quality of life surges to the top of the site selection factor list in 2004 and 2005 as it rolls out its new marketing campaign. The campaign focuses on Winston-Salem's "livability." A report recently released by AngelouEconomics indicated that quality of life issues are gaining importance in corporate and industrial site selection factors.

Missouri Governor Signs "Buy in State" Order

Missouri Gov. Bob Holden signed an executive order this winter that requires state agencies to purchase goods and services from Missouri-based companies if price is equal or lower to that of vendors located outside the state. The order also gives Missouri companies rejected in the bid process to receive a letter explaining why they were rejected. Currently, the state purchases about 70 percent of its products and services from Missouri-based companies.

Let Us Shock You: Majority of Digital Cities Located in the American South

The annual survey conducted by the Center for Digital Government, a national research organization that studies information technology in government and education, recently released its 2003 results. The report breaks down its top digital cities (not MSAs) in three categories: large cities over 250,000, mid-sized cities (125,000-249,999) and small cities (75,000-125,000). The American South landed 21 cities in the top 10 of all three categories, or 21 cities of the top 46 cited (curiously there were numerous ties in the ranking). That means 45 percent of the top digital cities in the nation are located in the American South.

Top 10 Digital Cities: Major Markets

1. Tampa
2. Colorado Springs
Los Angeles
3. Virginia Beach
4. Tucson
5. Seattle
6. Chicago
Nashville
7. Kansas City
8. Corpus Christi
9. Jacksonville
10. Honolulu

Top 10 Digital Cities: Mid-Markets

1. Fort Wayne IN
2. Winston-Salem NC
3. Des Moines IA
4. Plano TX
Salt Lake City UT
5. Richmond VA
6. Lincoln NE
Norfolk VA
7. Torrence CA
8. Irving TX
9. Hampton VA
Bakersville CA
Mobile AL
10. Madison WI
Naperville IL

Top 10 Digital Cities: Small Markets

1. Roanoke VA
2. Coral Springs FL
Ogden UT
3. Denton TX
Fort Collins CO
4. Olathe KS
5. Bellevue WA
Carrollton TX
6. Boulder CO
Schaumburg IL
7. Independence MO
Pueblo CO
Tyler TX
Westminister CO
8. Macon GA
9. Arvado CO
10. Costa Mesa CA
Manchester NH
Roseville CA

* Bold indicates Southern cities

Family Dollar Building Distribution Center in Rural Florida

Family Dollar, a Fortune 500 company, has chosen rural Jackson County, Fla., for its latest distribution facility. The retailer plans to build a 907,000-square-foot big box and will invest over $50 million in the project. Family Dollar officials said about 500 workers will be housed at the facility.

Florida Governor Increases Rural Development Initiative

Florida Gov. Jeb Bush announced in late December a new initiative that will assist Florida's 33 rural counties in creating jobs and investment. Florida is increasing rural economic development program funding by 75 percent, including a $4 million addition to the state's Rural Infrastructure Fund.

Blastech Building Steel Plant in Mobile

Ontario-based Blastech Corp. is constructing a steel-plate blasting and painting line plant in Mobile, Ala. The steel processor is building the plant adjacent to IPSCO's Mobile steel mill.

North Carolina Considers Privatizing State Department of Commerce

North Carolina House and Senate members discussed privatizing the North Carolina Department of Commerce during the winter quarter. Plans are in the works to possibly set up a public/private state economic development agency when legislators meet in the spring. Tar Heel State leaders are pointing to the Virginia Economic Development Partnership as a model. That quasi-private group was started by former Virginia Gov. George Allen shortly after he took office in 1994. North Carolina is not unfamiliar with state-level economic development changes. In the mid-1990s, North Carolina set up the most comprehensive regional economic development initiative ever done in the South. The state has also made more changes to its incentive packages for industry than any state in the South over the last eight years.

Nonattainment Status Threatening Power Delivery in Dallas-Fort Worth

Dallas-Fort Worth's nonattainment status with the U.S. Environmental Protection Agency because of the four-county area's dirty air, is threatening delivery of electric power to the market. Construction of new power plants that are sorely needed to serve one of the South's largest markets cannot be done because new plants would contribute to existing ozone levels. Furthermore, new generating plants cannot be built under EPA regulations unless some of the older facilities are shuttered. Currently, all power generation in Dallas-Fort Worth comes from six gas-fired power plants owned by TXU. All six plants are older facilities that pollute more than newer plants built just outside the Dallas-Fort Worth metro by independent power producers as a result of deregulation of the electric power industry two years ago in the state. To date, the independent power producers are operating their plants located outside the D/FW Metroplex at low levels they say because transmission lines into the market are fully subscribed by TXU. This is going to be an interesting battle to watch in the near future.

Timco Aviation Growing in NC's Triad Region

On the brink of bankruptcy shortly after Sept. 11, Greensboro, N.C.-based Timco Aviation Services is now adding hundreds of jobs to its aircraft maintenance facilities at the Piedmont Triad International Airport. Timco added 500 jobs in 2003 and plans to add up to 400 this year. Timco has seen its revenue grow 90 percent in the last quarter from a year ago.

December

QUIZ

In the five years of 1998 through 2002, what was the total investment made by automotive-related manufacturing companies in the state of Alabama? (a) $1.8 billion; (b) $6.3 billion; (c) $12.5 billion (d) $557 million.

(Scroll down for answer)

Nissan Training Centers Open

Mississippi State University opened two training and engineering support centers for Nissan North America in December. The Center for Advanced Vehicle Research (CAVS) opened at MSU in Starkville on December 4 and a satellite facility opened near Nissan's new assembly plant in Canton on December 15. The centers will help the Japanese automaker develop more efficient vehicles at the Mississippi plant, as well as develop manufacturing and design methods for vehicle production. The Canton center is the engineering component and will also serve suppliers. Both centers will be operated by Mississippi State University and will train manufacturing employees for the Canton plant. CAVS is part of the $353 million incentive package Mississippi gave to Nissan when it chose the Magnolia State three years ago for its $1.43 billion plant.

Fourth Innovation Center Opens in Kentucky

The state of Kentucky has opened its fourth innovation center in a rural region of the state. The newest center is in Elizabethtown. The centers assist and encourage entrepreneurs in rural Kentucky in transforming ideas to product and product to market. Other innovation centers in rural Kentucky are located in Pikeville, West Liberty and Ashland.

World's Biggest Truck Stop Being Built in Arkansas

The St. Francis County (Arkansas) Transportation Commission is in the final site search phase for a $50 million truck stop that will be built on 200 acres on Interstate 40 about 45 miles west of Memphis. The stretch of Interstate 40 west of Memphis is one of the busiest sections of interstate in the country with 17,000 trucks on average rumbling from Memphis to Little Rock every 24 hours. The new truck stop will include all of the basic services, but will feature hotel accommodations, upscale dining and a retail mall. The truck stop will employ up to 400 when opened and up to 1,000 when the mall opens. When completed, it will be the biggest truck stop in the country.

Ford Likely to Refit Atlanta Area Plant

Two years ago, Ford sent site search teams to Georgia to find a site to replace its 57-year-old Hapeville, Ga. assembly plant. Two sites farther out of the Atlanta metro area were chosen. Unfortunately for the state of Georgia, a single site was not chosen by Ford officials. Ford backed off the plan to replace the aging facility, located on a mere 128 acres near the Hartsfield-Jackson Atlanta International Airport. In December, a Ford official stated that the company would continue to build Mercury Sables and Ford Tauruses at the facility for two more years and will likely refurbish the facility for new models after that, if market conditions are favorable. The statement is bad news for Georgia, whose legislators approved $50 million last year to purchase a site in the state for a new Ford plant. It's bad news in two ways: one, the decision by Ford to shelve a new replacement plant in the state means a new supplier network to support a new, modern, larger facility with much greater capacity is now history. A new Ford facility would have meant thousands of new jobs in Georgia. Secondly, domestic automakers such as Ford are dealing with overcapacity issues that compute to plant closures, not new or expanded projects. But there's good news for Georgia's automotive industry as well. For one, if domestic automakers close plants, they will likely be in higher cost areas, not in the South. Secondly, Georgia happens to be home to one of the best sites for an auto assembly plant; the former DaimlerChrysler site near Savannah. DC chose not to build a van plant at that site last year.

Mississippi Leads Nation in Unemployment Drop

In November 2003, Mississippi's unemployment rate dropped .7 percent, the largest reduction in unemployment rates of any state in that month. In November, the South saw the lowest unemployment rate among all four U.S. regions at 5.3 percent. Following the South was the Northeast at 5.5 percent, the Midwest at 5.6 percent and the West at 6.1 percent.

Hyundai to Pay $14 an Hour at New Alabama Plant

Officials for Korean automaker Hyundai announced in December the company will pay production workers $14 an hour when its new assembly plant near Montgomery, Ala. opens in 2005. The wage is comparable to the $15 an hour Nissan paid its production workers in Canton, Miss. when it opened that plant in May of 2003. Hyundai officials also announced the wage will jump to $21 an hour for workers that have been at the plant for at least two years. To date, over 14,000 people have applied for jobs at the Hyundai plant. The $1 billion facility will produce Santa Fe SUVs and Sonata sedans when and is expected to employ at least 2,000 workers by 2007.

Municipal Utility Makes History

Memphis Light Gas & Water (MLG&W) made history in December when it pre-paid TVA for 50 percent of its base load power supply for the next 15 years. The municipal utility serves residential, commercial and industrial customers in the Memphis, Tenn. region. It's the first time ever that a U.S. utility has pre-paid for as much as 50 percent of its base power. MLG&W officials said that by pre-paying, they are receiving a discount of $225 million over the 15-year period. Total cost of the pre-payment is estimated to be $1.4 billion.

After Five Years, FedEx Gets Green Light in North Carolina ... For Now

In the 1999 SB&D 100, this magazine named the 1998 spring quarter announcement by FedEx that it would build a cargo hub in Greensboro, N.C., one of the Top 10 Deals of the Year. After five years, maybe we should now recant that recognition and make the FedEx project in the Triad one of the top 10 deals for 2004. The U.S. Army Corps of Engineers in December finally agreed to give a federal water permit to the Piedmont Triad Airport Authority, paving the way for the 1,000,000-square-foot cargo hub. The permit is the last FedEx needs to build the facility that is expected to be operational by 2008 or 2009. When announced in 1998, the hub was expected to cost $300 million. That figure is expected to jump to over $400 million now. Opponents of the hub are expected to challenge the issuance of the permit.

Cinram to Create 500 Jobs in Nashville

Cinram International has leased the former La Vergne Distribution Center east of Nashville for a multimedia manufacturing and distribution center. The Toronto-based company makes pre-recorded CDs, DVDs and other multi-media products for a variety of users including movie studios and music companies. The deal is expected to create 500 jobs.

Wiring Company Moves HQ from N.Y. to Georgia

Cooper Wiring, which built a large distribution center in Peachtree City, Ga. in 1997, is moving its headquarters from Long Island City, N.Y. to the Georgia market located just southeast of Atlanta. Cooper, which makes various wiring devices, broke ground in December on a 50,000-square-foot headquarters facility in Peachtree City that is expected to house more than 100 employees.

Tech Company Relocates from Cleveland to Houston

Augrid, a developer and manufacturer of thermocouples, silicon carbide tools and nanoparticle technology has moved its headquarters from Cleveland to Houston. Much of the company's technology centers on electronic and display products.

Duke Energy Settles with FERC

Duke Energy agreed to pay almost $5 million to settle a dispute that it manipulated energy prices during the California energy crisis that occurred in 2000 and part of 2001. The settlement is with the Federal Energy Regulatory Commission and does not shield Duke from lawsuits and other liabilities that may come from California customers.

More Woop-d-Doop in the Triangle

No major market in the American South sees its economy see-saw as much as the Raleigh-Durham region. Of course, no local Southern economy is tied as tightly to a massive piece of dirt that is known as the Research Triangle Park. Here's a small example: Over the last dozen years, a traveler to RTP through the market's airport can find an aviation facility that's packed with customers one year, and virtually empty the next. Same is true with the rental car companies at RDU; easily available one year, impossible to get a car the next. Here's a larger example: IBM, which has laid off thousands of employees at RTP over the years, but remains a huge employer with 13,000, apparently is planning to move as many as 5,000 Raleigh-based jobs offshore. We'll let you know when the next great tech company hires 5,000 at RTP, making it impossible again to find a rental car in one of the South's great cerebral locales.

Georgia Governor Recants, Will Give $500M for Atlanta Sewers

We reported in November that Georgia Gov. Sonny Perdue shot down a proposal to assist the city of Atlanta with $500 million in state money to overhaul the city's sewer system. Well, in December, Perdue had a change of mind and agreed to dole out the $500 million. The total cost to fix Atlanta's sewer problems is estimated to be $3 billion (that's with a "b").

Kohl's Building Distribution Center near Macon, Ga.

Retailer Kohl's Corp. announced in December that it will build a distribution center in Bibb County near Macon, Ga. The center will be built at the Airport East Industrial Park and is expected to house 300 workers.

QUIZ ANSWER

Automotive-related manufacturers invested $12.5 billion (c) in Alabama from 1998 through 2002. The figure represented an astounding 37.4 percent of all manufacturing investments made in the state during those five years. Even more astounding, in 2002, automotive manufacturers invested more than $2.1 billion in Alabama, or 68 percent of all manufacturing investments made in the state that year.

November

QUIZ

True or False: During the month of October 2003, the 17-state American South experienced triple the amount of mass layoffs announced (50 jobs or more) than mass layoffs announced in economic powerhouse states' California, Illinois, Massachusetts, Michigan, New Jersey, New York, Pennsylvania and Ohio combined.

(Scroll down for answer)

Toyota Officials Back in Marion, Ark.

SB&D has learned that representatives of Japanese automaker Toyota were back in Marion, Ark. to look at the site that placed second in the company's site search for a pickup truck plant that landed in San Antonio. The visit occurred the week of Nov. 3-7. The visit by Toyota certainly doesn't mean an announcement is forthcoming, however, this magazine predicted in the winter of 2002/2003 edition that Toyota would choose both San Antonio (first) and Marion (second) for assembly plants, all within a three-year time frame. Rumors are also swirling that two other automakers, one from Germany and the other from Japan, looked at the Marion site in the fall 2003 quarter. Arkansas officials have placed a billboard near the Marion site with a headline that reads "First come, first served."

State Incentives Total $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 might be the largest incentive package given to any company in the South's history. Also, the 6,500 projected jobs Scripps will create would be one of the South's largest job-making announcements in history.

Mercedes May Assembly New SUV in Alabama

Automotive News reported in mid-October that the Mercedes-Benz plant in Vance, Ala. may produce the G-Class Gelaendewagen, a high-end SUV now being built in Germany. The G-Wagen was first built in 1979 as a military vehicle for the Shah of Iran and is popular for similar uses in other countries. It can be compared favorably with the popular Hummer. The G-Class is built on a different platform than the M-Class, which has been assembled at the Vance-based plant since 1995 and the new R-Class, which will be built at the Alabama facility. Yet, a new variation of the G-Class could be designed and built at Mercedes' Alabama facility. The Mercedes plant in Vance, Ala. is undergoing a $600 million expansion that will add 2,000 workers and double production sometime in late 2004. The GST, or R-Class, is being added to the line. That vehicle is a variation of an SUV and a station wagon.

No Union Organization for Mercedes Plant

The recent United Automobile Workers union's quest to organize the expanding Mercedes plant in Vance, Ala. was dealt a blow in early October when DaimlerChrysler officials took a neutral stance on the matter. UAW officials had lobbied DaimlerChrysler's administration hard to allow card checks as opposed to plant-based secret ballots in an effort to unionize the Mercedes division of DaimlerChrysler A.G., the Stuttgart, Germany-based company that is the parent of both Chrysler and Mercedes. Specifically, though, UAW officials targeted the Vance Mercedes facility. Secret ballot voting for unionization has occurred at other foreign-owned automotive plants in the South, most recently with Nissan in Smyrna, Tenn., without any success. In fact, the UAW union has never organized a foreign-owned automotive plant in the United States, much less the South, where right-to-work laws are paramount.

In the summer of 2003, Nate Gooden, the UAW's chief negotiator with DaimlerChrysler said in a New York Times article that "Vance, Ala., will be a UAW organized plant in the very near future." Apparently that isn't going to be the case. Alabama Gov. Bob Riley was adamant about the UAW's desire to fill many of the 2,000 new jobs being created at the expanding Vance-based Mercedes facility. A spokesperson for Riley said that incentives given to Mercedes to expand its employment at the plant from 2,000 to 4,000 weren't given out so that the UAW could fill the positions with laid-off workers from Michigan. Riley demanded that those jobs be filled by Alabamians.

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. Yet, the flight deck and fuselage work prompted the city of Wichita to approve a $60 million bond for the company.

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.

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 out-migration from the city of Atlanta to suburbs that are already overcrowded to serious levels.

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.

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 in markets located on 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.

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.

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 showing that of all the construction workers' automobiles parked in the construction lot on a day in November, about 40 percent had out-of-state license plates. Agreements were made by 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 Bexar 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 for the construction of the plant is a way Toyota is thanking local San Antonio governments.

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.

Georgia Changes Direction on Buying Potential Ford Site

After agreeing to do so, economic development officials in Georgia have decided against buying nearly 1,500 acres of land in Morgan County for a new Ford Motor Co. plant that would have replaced the company's aging facility in Hapeville. For two years Ford officials have been site searching in Georgia for a site to build a new plant to replace the one it operates near Atlanta. The decision not to purchase the land indicates that Ford has chosen not to replace the Hapeville plant just yet.

Big Challenge for Kannapolis, N.C.

For almost a century, downtown Kannapolis, located in the Charlotte metro area, was home to Pillowtex Corporation's headquarters. In fact, Pillowtex facilities made up almost the entire central business district of Kannapolis. When Pillowtex dissolved 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 are facing: what to do with large, empty buildings in their central business districts.

Toyoto Breaks Ground in Jackson, Tenn.

Toyota Motor Manufacturing of America broke ground on its Bodine Jackson plant in November in Jackson, Tenn. The plant will open in 2005 when it will produce engine blocks for various Toyota and Lexus products including the Tundra, Corolla, Camry, Avalon and RX330. The facility will produce one million engine blocks annually and house at least 200 employees.

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.

Scripps to Redefine Western Palm Beach County

The massive Scripps Research Institute project now underway in Palm Beach County, Fla. will change the last remaining rural land available in South Florida forever. Palm Beach County is ponying up $200 million to purchase 1,900 acres of rural orange groves in its western region and build a state-of-the-art, 364,000-square-foot research hub. In time, the hub is expected to create as many as 6,500 jobs in it and as many as 40,000 around it. Scripps has also secured over $300 million in incentives from the state of Florida.

Toyota Expands Kentucky Facility

Toyota's Erlanger, Ky. research and development facility is expanding. The Japanese automaker is adding about 100,000 square feet and 75 new jobs at its R&D center in Northern Kentucky. The expansion should be completed by summer of 2004.

Biotech Expenditures Top $200 Million in Kansas City

In the last three years, expenditures from grants and contracts in Kansas City's life sciences industry topped $200 million. The figure represents the largest total ever in Kansas City over a three-year period. In addition, about $1.5 billion (that's with a "b") has recently been targeted for construction of research facilities in the area.

RJ Reynolds Bringing 1,000 New Jobs to N.C.

The merger of RJ Reynolds and Brown and Williamson will result in 1,000 new jobs in the Winston-Salem, N.C. area. The expansion could generate a $40 million to $50 million investment by the cigarette maker.

Quad/Graphics Opens in OKC

Quad/Graphics opened its 218,000-square-foot printing plant in Oklahoma City in the fall quarter. The facility employs 100 workers, but expects to expand to its original announcement of several years ago of 1,000 workers within three years. The plant is Quad's first west of the Mississippi River.

Boeing Adding 500 Jobs in Tulsa

Oklahoma's Boeing facility in Tulsa has been chosen to receive at least 500 new jobs beginning as early as next year to provide the fixed and moveable leading edges of the wing of the company's 7E7 Dreamliner. No assembly location has been chosen as of yet by Boeing for the 7E7.

GM Officially Dedicates New Shreveport Plant

Three years ago GM announced a $500 million retooling of its Shreveport, La. assembly facility in order to build the new Chevrolet Colorado and GMC Canyon pickup trucks. The new facility was officially dedicated in mid-October. The Michigan-based automaker employs over 2,500 at the northwest Louisiana assembly plant.

Big Deal in Laurens County, S.C.

Plastics manufacturer Sterilite Corp. announced in late November it is building a two million-square-foot manufacturing and distribution facility in Clinton, S.C., which is located in Laurens County near Greenville. The Townsend, Mass.-based company is investing $65 million in the facility and expects to employ 600 at the new plant when fully operational.

Two Announcements Made in One Day in Martinsville/Henry Co., Va.

Defense contractor MZM, based in Washington, D.C., is buying a shell building in Martinsville and adding 150 new jobs. MZM provides information technology services to the federal defense and intelligence communities. The company recently secured a new contract with the U.S. Army National Ground Intelligence Center in Charlottesville, Va. MZM is investing $5 million in the deal. On the same day in early November that MZM announced its project, Globaltex, an international provider of chenille and textured yarn for upholstery products, announced it was investing $5 million in Henry County. The company is moving into a 77,000-square-foot building and will hire 154 workers.

Nissan Begins Full-Size Pickup Truck Production in Mississippi

Nissan began production this fall on its first full-sized pickup truck, the Titan at the automaker's $1.43 billion manufacturing facility in Canton, Miss. The launch of the Titan is the third of five models to be produced at the new plant. In May, production of the Quest minivan began and in August Pathfinders were first assembled at the plant. The Canton factory will have the capacity to produce a total of 400,000 vehicles each year when fully operational. At that time, the plant will total 3.5 million square feet and house 5,300 workers.

Ford to Build Hybrid SUV in Kansas City

Ford will build a hybrid version of the Ford Escape at its Kansas City area assembly plant in Claycomo, Mo. The Escape will be the auto industry's first SUV that operates on both gasoline and electric power. Production is expected to begin in the summer of 2004. The announcement follows a decision by Ford to keep its St. Louis assembly plant open for now. The automaker previously announced the St. Louis plant was headed for closure. Ford's Claycomo, Mo. plant employs nearly 6,000 workers with an annual payroll of more than $400 million. The Ford F-150 pickup truck and two SUV models, the Tribute and Escape, are made at the plant.

QUIZ ANSWER

False: The answer is the other way around. October of 2003 saw mass layoffs in California, Illinois, Massachusetts, Michigan, New Jersey, New York, Pennsylvania and Ohio total 975 companies that laid off 50 employees or more. The 17-state American South, on the other hand, experienced a mere 301 mass layoffs in October. So, those states had more than triple the amount of mass layoffs than the South did in October. You might be saying to yourself right now, "that's because those states outside the South used in the QUIZ have a larger business and population base." Nah. We used the aforementioned states located outside the South in the QUIZ for a reason. Their population collectively totals 109.2 million. The South's population is estimated by the Census Bureau now as 108.8 million.

October

Another Big Buffalo for Alabama?

Alabama Gov. Bob Riley was absent from the ever-important Southeast U.S./Japan Conference in Tokyo on Monday, October 27. Several Southern governors and their economic development entourages are attending the conference. Riley was scheduled to attend, however, sources told us he bolted from the conference to deal with some issues regarding a large project. Boeing is currently in a site search for its 7E7 Dreamliner plant. Mobile, Ala. remains in the mix for that deal.

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.

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 about 3,000 automotive industry-related factories in the South employing 100 workers or more. Of those, only four 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 two-tenths of a percent of the region's 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. Someone should link those two large entities together. Hey, that would be me.

Mike Randle (mike@sb-d.com)

Editorial

Did He Really Say That?

A recent article published by the Atlanta Journal-Constitution focused on what will be done with the 1,500-acre Pooler, Ga. site that was to be developed by DaimlerChrysler. DC decided against building a 3,000-employee Sprinter van plant on the site in September. Georgia Gov. Sonny Perdue was quoted as saying he would prefer to preserve the site for the next auto assembly plant that comes down the pike. Perdue is right to do so. The site features $60 million in improvements and is located at the junction of I-95 and I-16. It happens to be one of two very attractive sites for auto assembly in the South. The other site is in Marion, Ark.

But in the article, Jim Hossack, a senior consultant with Auto-Pacific, Inc., an automotive industry research firm based in California with offices in Michigan, said that landing an automotive assembly plant is a "high risk" venture. He cited DC's back down and the current overcapacity in the industry. His tone in the article indicated that states in the South should reconsider the recruitment of automotive assembly plants. Maybe Mr. Hossack should take a tour of more than three-dozen markets in Alabama where the automotive industry has virtually transformed their economies in just 10 short years.

The landing of an automotive assembly plant remains the crown jewel of economic development recruitment in the South. No industry at any time in the South's economic history has had such a positive effect than the automotive industry over the last 20 years. To suggest that states in the South be wary of the automotive industry and auto plants in particular is simply one of the most ludicrous statements we've heard all year. By year's end, significant (100 jobs or more) new and expanded automotive plants in the South will top the 100 mark and only four have closed this year. No single industry can match that performance. In fact, over the last three years, no single industry has even come close. That being the case, states in the South must do everything they can to court automotive, especially the biggest deal of them all, automotive assembly.

Lee Burlett (lee@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.

QUIZ

In what Southern state is Fort Knox located? (a) Tennessee; (b) Mississippi; (c) Virginia; (d) Kentucky; (e) Alabama. BONUS QUESTION: Name the metropolitan area Fort Knox is located.

(Scroll down for answer)

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.

Bank of America Hiring 340 in Charlotte

Charlotte-based Bank of America is adding 340 jobs at its home-equity division. The company already employs 2,000 at its facility in Gateway Village. B of A employs almost 14,000 in the Charlotte MSA.

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.

More Relocations to the South

Goodrich is closing its aerospace plant in New Jersey and will open a new facility in the Carolinas. No Carolina locations for the new plant have surfaced as of this writing. List, a Swiss technology company, is relocating its U.S. headquarters from Massachusetts to southwest Charlotte. In addition, Strategic Partners, a maker and distributor of work uniforms and footwear, is moving its distribution center from Los Angeles to Dallas. The company will bring with it some personnel from California but the number is unknown. What is known is SP will hire 200 in the Dallas area and build a 242,000-square-foot distribution center in southwest Dallas. A spokesperson for SP cited tax and workers' comp issues in California as reasons supporting the relocation. Finally, S.Com, is moving its headquarters from San Francisco to downtown Miami. The company is a division of U.K.-based S.Com Group, a consultant to high-tech industries.

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.

QUIZ ANSWER

Fort Knox is located in Meade County, Kentucky. Where is Meade County? Why, it's in the Louisville, Ky. MSA. Pat yourself on the back if you got that bonus question. Fort Knox is a large contributor to the Louisville area economy. Its payroll exceeds $600 million annually.

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.

Editorial

The South's Biggest Battle Grounds

This editorial isn't historical. It will not deal with brutal battlegrounds at Fredericksburg, Chickamauga, Fort Sumter, Shenandoah, Bull Run, Shiloh or Vicksburg. No, this description of 21st-century battlegrounds has to do with states and markets in the South that compete for jobs as if it were indeed a war.

When I first launched this magazine almost 12 years ago now, it was common to visit a community and hear the economic developer spend the majority of his or her time with me bad mouthing the county next door. I would then move on to the county next door and hear the same thing. Yep, fighting among neighbors in the same state was commonplace in 1992. Economic developers back then must have felt that the best way to land your expansion was to bury the competition with words. It was no different than family feuds such as the Hatfield and McCoy's, minus the deadly hardware.

It was also a common practice for the gas and electric company to go at each other. We actually accepted and published an ad in 1993 that featured a line drawing of a middle-class rural South home. The drawing showed the back of the house and clearly the large propane gas tank next to the deck. The headline of the ad read, "The bomb in your back yard." Gas companies did the same thing in those days, but not so blatantly.

Around 1995, "regionalism," or cooperation among neighbors in the never-ending economic development quest, was a practice that was getting some big-time attention in the South. North Carolina invested in it like no other state at the time and no other state since. Alvah Ward, the former director of North Carolina's Department of Commerce, told me at the time, "Mike, it's the end of economic development in North Carolina as we know it." To this day, I am still pondering that statement.

But it wasn't North Carolina that started the good neighbor economic development recruitment strategy. Virginia had implemented regionalism (a happy cluster of competitors) with little fanfare as early as the late 1980s. And interestingly enough, it was rural based and rightly so.

As an executive looking for a site for your company in the South, you will experience more cooperation among Southern states, counties and utilities than ever before. The backbiting, generally, is all but over. Even Alabama and Mississippi have joined together to recruit industry to their rural border areas. That partnership is unprecedented. Never before have two states linked together to recruit industry.

But there are still pockets of resistance. There are still brutal battlegrounds recruiting your project. In fact, there remain areas of the South where the battle for industry is invisible on the outside, yet, inside, in the back rooms, it's war.

The following are areas of the South that fight, scratch, claw and spit at each other like no other places in the region. These states, communities or regions are all extremely professional in how they practice economic development and are very attractive places to locate your business. It's just that these folks know full well what the daily competitive grind of locating industry is all about. And that might not be such a bad thing for your next expansion. In short, the following states, regions and counties wake up each morning and arm themselves with weapons for the recruitment battle like no other in the American South. Why? Well, their competitors next door are right behind them with even more deadly weapons.

The 10 Biggest Economic Development Competitors in the South

1. Charlotte, N.C. vs. Central and northern South Carolina

South Carolina's aggressive incentives have lured more than one Charlotte-based company over the line into South Carolina. Now it looks like the worm has turned. SC is without rudder and NC has recently indicated a competitive edge missing for years.

2. Hampton Roads, Va. vs. Hampton Roads, Va.

You won't notice it when site searching this large region of Virginia on your first visit, but community leaders in places like Virginia Beach, Norfolk, Newport News, Suffolk and Chesapeake are fierce competitors behind the scenes.

3. Charlotte vs. Jacksonville vs. Richmond vs. Nashville

These four markets may be the hottest in the South for headquarter relocations from outside the region. They are constantly butting heads with each other for the same deals.

4. Memphis vs. Northern Mississippi

A regional effort to band this region together is underway as I write this. Good luck!

5. Dallas vs. North Dallas

Blatant incentives specifically designed for companies located in Dallas to move up the road to Frisco, Tex. says enough.

6. Dade County, Fla. vs. Broward and Palm Beach Counties

A war of words, incentives and bad-to-the-bone blood. Fightin' counties in paradise.

7. Pennsylvania vs. West Virginia

OK, Pennsylvania isn't in the South. But West Virginia is. Enough said.

8. Inside Atlanta's Perimeter vs. Outside Atlanta's Perimeter

You can't feel any love here. Almost all counties outside the Interstate 285 perimeter in the Atlanta MSA spend all of their marketing dollars targeting companies inside the perimeter.

9. Oklahoma City vs. Houston

A small battle, so far, is breaking out between these two economies that remain centers for the oil industry.

10. North Carolina vs. South Carolina

No two states in the South fire shots at each other like these two.

Mike Randle (mike@sb-d.com)

QUIZ

Which two states in the South were involved in the Hatfield and McCoy feud?

(Scroll down for answer)

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, this state has begun to create some momentum in the auto sector. Following a major supplier announcement 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.

Big Deal in Florida Emerges

We wrote in late September of a big deal in the air in Florida and now in mid-October we know what it is. The Scripps Research Institute, which operates a major biotech research center near San Diego, announced on October 8 it had chosen Palm Beach County, Fla. for a new science center that will take up nearly 400,000 square feet and create over 6,000 jobs. Scripps employs about 3,000 in California at its research center and is the leading non-profit biomedical research firm in the U.S. To date, the company has spun off 40 biotech companies in Southern California. Officials in South Florida say that site requirements for Scripps and it suppliers could total as much as 2,000 acres. That type of site is hard to come by in South Florida. However, Jupiter, Fla. and Palm Beach Gardens are two of just a handful of locations in Palm Beach County that could accommodate Scripps' site requirements. In a story published by the Boca Raton News on October 13, Gov. Jeb Bush said that 40,000 spin-off jobs could be created by Scripps locating in Florida.

New Venture Capital Fund for Appalachia

U.S. Senate Majority Leader Bill Frist (Tenn.) and Tennessee Congressman Zack Wamp joined with the Appalachian Regional Commission and TVA on October 7 to announce a new $12.5 million Southern Appalachian Venture Capital Fund (SAF). The fund will be a source of equity capital for businesses that historically have not had access to equity capital. The fund actually targets the Southern Appalachian region, which basically encompasses the Tennessee Valley.

Wake Forest University Sets Up Nano Center

The Center for Nanotechnology, a division of Winston-Salem, N.C.-based Wake Forest University's physics department, is now operating with 15 skilled scientist. The center is expected to draw new technology industries to the Triad region. The formation of the Nanotech center happened quickly. This past summer, officials with Wake Forest offered $1 million to professor David Carroll and 14 of his fellow scientists at the Lab for Nanotechnology at Clemson University. Carroll and the other scientists at Clemson agreed to the offer.

QUIZ ANSWER

Kentucky and West Virginia

Top 20 Family-Owned Businesses in the South

-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.

Mike Randle (mike@sb-d.com)

Auto Park Being Developed in South Carolina

Clemson University announced this month it is developing an automotive research park in Greenville. The park, called the International Center for Automotive Research, will merge higher-learning research capabilities with the private automotive sector. Clemson officials said the park will include a graduate school of auto engineering. The new park will be located on 400 acres that front Interstate 85 in southern Greenville County.

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.

Toyota Breaks Ground in San Antonio

The ceremonial ground breaking of Toyota's pickup truck plant in South San Antonio took place in October. Dennis Cuneo, senior vice president of Toyota Manufacturing North America was present at the event as was Hidehiko Tajima, who will serve as president of the Texas plant. Cuneo noted that he had never seen such a large crowd at any of the automaker's groundbreakings. Toyota will build Tundra pickups at the new plant.

UAW: Baltimore GM Plant to Close

The president of United Auto Workers Local 239 in Baltimore claimed that General Motors is planning to close its old Baltimore assembly plant sometime in 2005. The plant houses just over 1,000 workers who assemble mid-sized vans.

Georgia GM Plant to Build New Vans

General Motor's Doraville, Ga. assembly facility is adding four new minivans to its assembly lines for 2005. The Pontiac Montana SV6, Buick Terrazza, Chevy Uplander and Saturn Relay will all be made at the Georgia plant, which is located near Atlanta. The Saturn and Buick models are first-time minivans for those two GM divisions.

Mercedes May Assemble New SUV in Alabama

Automotive News reported in mid-October that the Mercedes-Benz plant in Vance, Ala. may produce the G-Class Gelaendewagen, a high-end SUV now being built in Germany. The G-Wagen was first built in 1979 as a military vehicle for the Shah of Iran and is popular for similar uses in other countries. It can be compared favorably with the popular Hummer. The G-Class is built on a different platform than the M-Class, which has been assembled at the Vance-based plant since 1995 and the new R-Class, which will be built at the Alabama facility. Yet, a new variation of the G-Class could be designed and built at Mercedes' Alabama facility. The Mercedes plant in Vance, Ala. is undergoing a $600 million expansion that will add 2,000 workers and double production sometime in late 2004. The GST, or R-Class, is being added to the line. That vehicle is a variation of an SUV and a station wagon.

Georgia Officials Approve Purchase of Potential Ford Site

The state of Georgia already owns one of the South's best sites for an auto assembly facility. That would be the 1,500-acre, Pooler, Ga. site that was secured for DaimlerChrysler. Now Georgia officials have approved the purchase of another 1,500-acre site. While state officials won't say, the site might be for a new Ford plant that may or may not replace the automaker's Hapeville, Ga. facility. Speculation has it that the site the state is buying is either in Meriweather or Morgan Counties, two locations about an hour from Atlanta Hartsfield International Airport.

Automotive Deal in Orlando

Detroit-based Trans Logic Auto Carriers, a holding company for Chrysler Corp., has leased 23 acres in the Taft-Vineland area near Orlando International Airport. The company transports and stores automobiles for Chrysler nationwide.

Japanese Supplier Opens Plant in North Carolina

NT Techno USA, a Japanese-owned company that manufactures automotive transmission parts, officially opened its new $21 million, 63,000-square-foot production facility in Oxford, N.C. on October 8. The Oxford plant, located in Granville County, is NT Techno's first venture in the U.S. The company will supply transmission parts to AW North Carolina in Durham, which manufactures and distributes fully assembled automatic transmissions for Toyota Motor Manufacturing North America. On October 7, AW NC dedicated its new expansion in Durham that will provide 450 new jobs. NT Techno has manufactured automotive parts since 1927.

Mercedes Supplier Building in Birmingham

Toronto-based supplier Decoma International is leasing 120,000 square feet of space in a 300,000-square-foot building being built by Birmingham-based Graham & Company. The location is the Jefferson Metropolitan Park (JeffMet), located southwest of the city of Birmingham. Decoma will produce plastic exterior parts for the next generation Mercedes M-Class and the new Grand Sports Tourer, or GST. The Vance, Ala. Mercedes assembly plant is undergoing a $600 million expansion that will double employment to 4,000. Oxford Automotive and Plastech, two other suppliers, are currently building their facilities in JeffMet. Decoma International is part of the Magna International group that produces auto parts for various automakers in North America, Europe, and Asia.

No Union Organization for Mercedes Plant

The recent United Automobile Workers union's quest to organize the expanding Mercedes plant in Vance, Ala. was dealt a blow in early October when DaimlerChrysler officials took a neutral stance on the matter. UAW officials had lobbied DaimlerChrysler's administration hard to allow card checks as opposed to plant-based secret ballots in an effort to unionize the Mercedes division of DaimlerChrysler A.G., the Stuttgart, Germany-based company that is the parent of both Chrysler and Mercedes. Specifically, though, UAW officials targeted the Vance Mercedes facility. Secret ballot voting for unionization has occurred at other foreign-owned automotive plants in the South, most recently with Nissan in Smyrna, Tenn., without any success. In fact, the UAW union has never organized a foreign-owned automotive plant in the United States, much less the South, where right-to-work laws are paramount.

In the summer of 2003, Nate Gooden, the UAW's chief negotiator with DaimlerChrysler said in a New York Times article that "Vance, Ala., will be a UAW organized plant in the very near future." Apparently that isn't going to be the case. Alabama Gov. Bob Riley was adamant about the UAW's desire to fill many of the 2,000 new jobs being created at the expanding Vance-based Mercedes facility. A spokesperson for Riley said that incentives given to Mercedes to expand its employment at the plant from 2,000 to 4,000 weren't given out so that the UAW could fill the positions with laid off workers from Michigan. Riley demanded that those jobs be filled by Alabamians.

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.

Editorial

Businesses in California, Listen Up!

I read with interest a story written by Gillian Flaccus, distributed by the Associated Press and published by Atlanta Journal-Constitution on October 23. The story was about states in the West that are seducing businesses in California, namely Oregon, Nevada and Idaho. The neighboring states are taking advantage of California's problems, which primarily center on high-operating costs for business, a political landscape that's odd at best and an overall state economy that is beset with problems.

Let's get right to the point. If you are considering moving your business from California to another state, the most likely reason is the incredibly high cost of operating your business in that state. When the economy is humming and you're making money hand-over-fist, high operating costs are not that noticeable. But when profit margins are reduced for lack of contracts or buyers, you tend to look at your overhead more closely. That being the case, why not compare the general business climate and overhead presented by those courting your business aggressively -- other states in the West -- with that found by states in the South.

That's exactly what Bill Foley, Chairman of Fidelity Insurance did when his company decided to leave Santa Barbara, Calif. Foley crunched the numbers and found that a state in the South, namely Florida and specifically Jacksonville, was a fit for him. Foley found that no state in the West could compete with the South when it comes to overall business climate and the cost of operating a business.

So if recruiting officials in Oregon, Idaho or Nevada are selling you on their business climates, ask them if they are part of the World's Third-Largest Economy, which is the American South (behind only the U.S. and Japan and ahead of Germany in Gross Product generated). Ask them if the average cost of a four-bedroom home (you must think of the employees that will be going with you) in their state is around $250,000, like it is in the South. And finally, ask them if they are a part of a region that has created more jobs than any other region in the U.S. every year for the last 15 years.

Lee Burlett (lee@sb-d.com)

"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.

R.R. Donnelley Continues Investment in the South

R.R. Donnelley Corp. announced this summer it was relocating its corporate headquarters from New York to the Raleigh-Durham area. The publisher of yellow pages and other publications announced it would create 275 new jobs over the next three years in the Triangle. The company announced in October it is leasing nearly 250,000 square feet of industrial space in the Atlanta area.

Charlotte Airport May Build Its Own Power Plant

On the heels of the Great Northern Blackout of 2003, officials at the Charlotte/Douglas International Airport are considering building a power plant that will serve the facility exclusively. Currently, the airport has backup generators that keep critical functions operational in the event of power interruptions. Charlotte's airport encompasses 1.7 million square feet and 6,000 acres of land.

Commuter Rail for Austin?

A Texas lawmaker is proposing a commuter rail on existing rail lines in Austin to reduce that city's traffic problem. Rep. Mike Krusee (R-Taylor, Tex.), is suggesting that existing rail routes be used for a new commuter rail system that would cost about $100 million in the first phase. Voters in Austin defeated a light rail plan in 2000 that would have cost nearly $1 billion for a 20-mile section. Krusee maintains the commuter rail option is affordable for the Austin area and it could be implemented in three years.

Atlanta Stuck With Traffic

In an unusual admission, officials with the Atlanta Regional Commission say that no amount of money will be enough to reduce traffic congestion in the city for the foreseeable future. The ARC put together its "aspirations plan" in October, a list of transportation projects it would like to complete by 2030. But even with all of those projects becoming a reality, traffic will continue to be a major problem in the South's fourth-largest MSA for the next three decades. Officials with the ARC cite the fact that an estimated 2 million persons will be added to Atlanta's population by 2030.

County in Orlando MSA Defeats Sales Tax Increase

Voters in Orange County, Fla. defeated a half-cent sales tax increase that would have funded transportation improvements in the Orlando area. The sales tax increase, if approved, would have raised nearly $3 billion over 20 years. That money would have been used for a much needed widening of Interstate 4, which runs through Disney World and downtown Orlando. It would have also provided funds for new transportation projects, including mass transit.

Editorial

Mapping a Strategy for Luring Automotive Suppliers to Alabama's Rural Areas

One of the biggest Rural American South success stories in history has occurred over the last year in Alabama. More than two-dozen automotive suppliers have landed in places like Luverne, Elba, Shorter, Fort Deposit, Greenville, Oxford, Prattville, Alexander City, Enterprise and Opelika in the last year. While all of those markets are small, the interesting thing about almost all of them is they are located south of Montgomery.

For decades, Alabama's industrial core has centered in Birmingham and north to Huntsville. Gadsden, Cullman, Decatur and other markets north of Birmingham remain major industrial centers. But this new surge of industrial development south of Montgomery is something new. If anything, it didn't hurt that markets south of Montgomery complained to the Alabama Development Office for years that north Alabama had a grip on industrial development in the state. It also didn't hurt that Hyundai decided to place its assembly plant in Montgomery, geographically making it the most southern of all Southern automaker facilities (when Toyota builds its plant in San Antonio, it will take that claim).

Now more rural counties in Alabama may benefit from a new initiative. The U.S. Department of Commerce Economic Development Administration recently gave the University of Alabama $350,000 to develop a strategy to lure automotive suppliers to distressed rural counties in Alabama. To us, the strategy seems to be working pretty well. Regardless, we're sure the money will be well spent.

Lee Burlett (lee@sb-d.com)

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.

Hapeville, Ga. Ford Plant to Build Sport Wagons

Mixed rumors surround Ford's 56-year-old, 2,300-employee assembly facility located near Atlanta. Earlier this year speculation centered on Ford closing the plant in the near future and building a new one further outside the Atlanta MSA. While that rumor swirled, Ford officials maintained there were no plans to close the old Hapeville facility. Over the summer, rumors surfaced that a new assembly plant would not be built in Georgia but rather in Mexico. Also during the summer, automotive industry analysts claimed there's no way, considering Ford's capacity problems, there will be two Ford plants operating in Georgia. Regardless, the Hapeville facility will phase out production of the Ford Taurus and Mercury Sable, two hot cars in the 1990s but no longer so. Instead, Ford officials have confirmed the Hapeville plant will build sport wagons under the Ford and Lincoln name plate beginning in 2006.

Celebration in Alabama, Disappointment in Georgia

Talk about a tale of two states. DaimlerChrysler informed Georgia officials on September 23 it would not build its Sprinter Van plant near Savannah. Exactly one week later, DaimlerChrysler and Alabama officials celebrated the automaker's 10th anniversary in the state and a $600 million expansion of its plant located between Birmingham and Tuscaloosa. While it's clear there is no connection between the two, it was cruel timing for officials in Georgia. Mercedes announced on September 30, 1993 it would build its first U.S. plant in Vance, Ala. Alabama offered $253 million to lure Mercedes. The state was highly criticized for the incentive package. Since Mercedes announced, Alabama has landed two other assembly plants and numerous other major automotive projects. Currently, $1.4 billion in annual payroll is doled out by the automotive industry in Alabama. Over 30,000 jobs have been created in the sector since 1993 and that figure is expected to increase to 40,000 within three years.

Brose Building in Vance, Ala.

Brose, a future supplier of door components to the Mercedes-Benz factory, is building a $13 million plant in Vance. The plant will employ 80 workers and is expected to open next spring in the new Legacy Industrial Park.

QUIZ

Alabama's automotive industry has earned international recognition in a short time. No state in the short, but incredibly active history of the Southern Auto Corridor has landed three assembly plants in just 10 years. But there is one other industry that's firmly plant in the Heart of Dixie that rivals the automotive industry. It is responsible for 100,000 more jobs currently than automotive in Alabama and $6 billion (that's with a "b") in annual payroll. Is that industry (a) Cotton picking and cotton processing combined; (b) Aerospace; (c) Biotechnology; (d) Biomedicine; or (e) Poultry processing?

(Scroll down for answer)

South Carolina Economic Developer Cited

Henry (Hal) Johnson III, Executive Director of the Orangeburg (S.C.) County Development Commisssion, has been named 2003 Economic Developer of the Year by the National Rural Economic Developer's Association. The honor given by NREDA, cited Johnson's outstanding achievements, individual leadership and his measurable contribution to economic development in a rural setting.

Charleston Port Sets Record

In its 300-plus history, the Port of Charleston has never been busier. Container volume through Charleston increased to more than 1.68 million TEUs for the 2003 fiscal year marking a new all-time record and an 11 percent increase over 2002. The Port of Charleston is the fourth-busiest container port in the U.S. and the second-busiest container port along the Atlantic and Gulf coast. The port is undergoing a two-year, $128 million expansion and attempting to gain approval for a new terminal on the old Charleston Naval Base.

Jaxport Sets Record

In October, officials in Jacksonville, Fla. celebrated a new national record for a vehicle handling port. During fiscal year 2002/2003, 600,000 vehicles were handled by the port. Ford, Toyota and GM are the three largest auto manufacturers that use the port for import and export.

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.

QUIZ ANSWER

Growing industries in the South's next great state (Florida, Georgia, North Carolina, Tennessee, Texas and Virginia have all achieved "economic development greatness" in the South to date) include biotech, automotive and financial services. But it's (b) aerospace that that is responsible for 140,000 jobs in Alabama and a $6 billion (that's with a "b") annual payroll.

September

Editorial

Don't Start It if You Can't Finish It!

DaimlerChrysler Decision Not to Build in Georgia Sends Up the White Flag

DaimlerChrysler's decision on September 23, 2003 to scrap a proposed Sprinter van plant in Pooler, Ga., had nothing to do with the state of Georgia itself. Nor did it involve local officials in the Savannah area, where the plant was to be built. Economic developers and political leaders in the Peach State, including Georgia Gov. Sonny Perdue and Glenn Cornell, commissioner of the Georgia Department of Industry, Trade and Tourism, did everything they were asked to do by the automaker and more to land what would have been the South's newest large auto assembly plant.

No, the reason DC officials pulled the plug on the Pooler, Ga. deal centers on the fact that its Chrysler division is pulling what was one of the world's most admired and profitable international automakers down to financial depths never before experienced. Case in point was the $1.1 billion loss that division slapped on the automaker in the second quarter of this year (Oh, to reverse Daimler's decision to envelope itself with a Big 3 automaker).

One could also place blame on the nation's current economic state for the cancellation of the plant. U.S. sales of the Sprinter van, now being manufactured in Germany and assembled in Gaffney, S.C., were expected to top 8,000 units this year after 2,000 were sold domestically last year. But only about 850 Sprinters have been sold in the U.S. so far in 2003.

But a valid argument can be made that the economy is not to blame for DC's cancellation of the project. There is no question tens of thousands of U.S. companies have held off buying commercial vans for two, maybe three years now. A lousy economy tends to dictate those types of buys, but only for so long. Eventually, companies that use commercial delivery vans, companies as large as FedEX or as small as an independent, two-man repair concern, will have to replace those vehicles and soon.

So, it's our belief, even with the poor sales seen this year, that the commercial van market will be there next year and most certainly in 2005 and 2006. It's simply a case of pent-up demand. By the way, by 2006 DaimlerChrysler would have produced tens of thousands of Sprinters at the proposed assembly plant in Pooler, Ga. Now they won't.

We strongly believe that the reason DaimlerChrysler canned the deal was because the company is struggling. And it is struggling because of its Big 3 connection that is Chrysler. DC is in a hunker-down mode. You don't expand in that environment. You cut and that's where the Savannah van plant lies now: on the cutting room floor. Not unlike the other two that make up the Big 3, DC's Chrysler division has eliminated over 30,000 jobs and closed seven plants in the last two years. More will follow.

I read with interest the recent United Auto Workers negotiations with DaimlerChrysler, GM and Ford. For the first time in decades, the Big 3 were given permission by their employees to close plants and thus benefit from the savings. There is something wrong there. When you must ask your employees -- once every four years, no less -- to save your ass, well, that's a business model that won't fly. And that's especially true when your biggest competitors, namely foreign automakers manufacturing and assembling in the South, need not ask their employees for their opinions -- or worse yet, permission -- on critical moves. Maybe that's why those folks are expanding.

As for the 1,550-acre Pooler, Ga. site that has seen $60 million in improvements over the last year or so, all paid for and spiffed-up quite nicely in good spirit by the folks of Georgia for DaimlerChrysler? Well, that patch of beautiful brown, flat dirt has now vaulted itself to the top of our Best Auto Assembly Plant Sites in the South ranking (see feature on this Web site). The site features rail, seaport, and double interstate access. Did we mention $60 million in improvements? There is no site on this planet better suited for an automaker right now than the Pooler, Ga. site.

We are quite confident that soon enough another automaker, most likely a different one from Germany, or most certainly one based in Japan, will thank DaimlerChrysler for their decision on this day not to build their proposed $750 million, 3,500-employee van assembly plant. Yes, today, September 23, 2003, a white flag was raised. That white flag was raised by the Big 3.

Mike Randle, editor
mike@sb-d.com

A Big Deal is in the Air

There's a huge deal out there and it looks as if Florida is where it's headed. Gov. Jeb Bush admitted September 19 that he may have to call lawmakers back to Tallahassee this fall for a special session to formulate an incentive package to land the project. Florida officials are especially tight-lipped, but we believe the project is one of two looking at the Sunshine State right now. The deal is either a proposed $6 billion (that's with a "b") communications satellite system designed to link armed forces worldwide that the federal government wants operational by 2008 or the relocation of Lockheed Martin Space Systems headquarters and facility, which is currently located near Denver. That facility employs over 10,000.

Ford Does About Face in St. Louis

In the summer quarter, Ford officials announced they would close their St. Louis assembly plant and move production to Louisville. Apparently, a $9 million incentive package put together by officials in Missouri has changed Ford's mind. Now it looks as if the plant has gotten a reprieve and will continue to operate for at least four more years.

University of Texas Building Biotech Site

The University of Texas has announced a new $25 million biomedical research facility at its J.J. Pickle Research Campus in North Austin. The new facility will be the home of UT's new Department of Biomedical Engineering. Five-hundred undergraduates are expected to be studying at the facility sometime in 2005.

UAB Breaks Ground on Biomedical Research Building in Birmingham

The University of Alabama Birmingham has broken ground on a 300,000-square-foot, $56 million biomedical research center in downtown Birmingham. The 12-story Shelby Interdisciplinary Biomedical Research building has been described as "UAB's Mercedes" for the potential economic impact it could bring. It's estimated that the new research facility will generate 1,400 jobs and attract hundreds of millions of dollars in research grants when completed in 2005.

LP Considering Several Southern Markets for HQ Relocation

Portland, Ore.-based Louisiana-Pacific is considering Charlotte, Nashville and Richmond as sites for a relocation of its headquarters. The company, which is a global leader in building supplies, operates six administrative offices in North America and is considering whether to consolidate them all to one site. If the company does relocate to the South, it will join several other large companies that have relocated to the South this year. Fidelity, Philip Morris, Rubbermaid, R.H. Donnelley and Asurion are just a sampling of companies that have relocated their headquarters to the South from the West, Midwest or Northeast just this year.

FedEx Chooses Hutchins, Texas

Officials with Memphis-based FedEx announced in late August the company would build a 330,000-square-foot distribution hub in Hutchins, Tex. The small city if located in southern Dallas County. The new hub is expected to employ 200 office personnel, 1,200 package handlers and about 400 independent contractors, making the deal one of the largest announced in the South this year.

Future Pipe Expanding in Gulfport

Dubai, UAE-based Future Pipe Industries announced in September it would build a much larger facility in Gulfport, Miss. than originally planned. Future Pipe announced a 40,000-square-foot facility earlier this year, however, officials with the company recently announced the construction of a 100,000-square-foot facility and a 50,000-square-foot building. The company is expected to employ 300 workers at the site.

Three More Suppliers to Nissan Announce in Mississippi

Three new Nissan suppliers, Goggin Warehousing, Waltex MS and Logistics Insights, have recently opened up shop in the Jackson, Miss. area. The three companies, which provide the Nissan plant with a variety of products and services including robotic welding, warehousing and light manufacturing, employ about 100 now, but that figure will rise as production increases at the plant.

Hyundai Supplier Picks Selma

Lear Corp. will most likely bring two tier-two supplier plants to Selma, Ala. The facilities will supply Lear's car seat plant that is a tier-one supplier to the new Hyundai plant being built in the Montgomery area.

Nordyne to Set up Shop in Tennessee

St. Louis-based HVAC manufacturer Nordyne, is signing a 15-year lease on a 385,000-square-foot manufacturing facility in Dyersburg, Tenn. The deal is expected to result in 400 new jobs by early 2004 and up to 600 by 2006.

August

QUIZ

The $8 billion restoration project of the Florida Everglades recently experienced a setback when the Florida Legislature passed a bill that eliminates a deadline set 10 years ago for stopping the flow of a basic element that has been polluting the glades region for decades. Gov. Jeb Bush signed the bill. This common element has already caused permanent damage to the Everglades and much of South Florida. What is the common element? (a) arsenic (b) oxygen (c) phosphorus (d) retirees (e) cream of wheat (f) sulphur (g) mercury

(Scroll down for answer)

NC Governor Appeals to President Bush

Gov. Mike Easley sent a personal appeal in August to the President asking again for help for the struggling textile industry in North Carolina. Easley sent an e-mail to the President, which included a video message from 10 former employees who had worked at Pillowtex from 10 to 25 years. In August, Pillowtex announced that it was filing for bankruptcy, closing its facilities and terminating over 6,000 employees. More than 4,000 workers were employed in North Carolina. "I wanted President Bush to hear directly from the people that are impacted by these destructive federal trade policies," said Easley. "These people have given their lives to ensuring that the 'Made in America' label is synonymous with quality and now they need our help."

Easley has written to the Bush administration on nine occasions asking that trade policies be revisited to stop the exportation of jobs overseas. Since 2001, North Carolina has lost 50,000 textile jobs due to federal trade policies. Specifically, Easley is asking that the U.S. Trade Representative do the following:

* Start aggressively combating the widespread dumping of textile goods on U.S. markets
* Address the failure of trading partners to open their markets to our products
* Devote sufficient resources to fight illegal smuggling and customs fraud
* Initiate the "special China safeguard" on sensitive textile and apparel categories to control the unfair surge of Chinese imports
* Take action to curb currency manipulation
* Withdraw from the recent trade agreement with Vietnam

Major Biotech Move Made by North Carolina

The Golden LEAF Foundation, the group formed in 1999 to use $2.3 billion of North Carolina's tobacco settlement shares, is investing $60 million to train workers in the state for work in biotechnology. The money will be given as grants to N.C. State and other colleges and universities in the state to train workers to fill jobs in various biotech fields. The motivation behind the grants is to train and retrain labor for work in drug and vaccine production and a myriad of biotechnology innovations from agriculture. Existing biotech companies in the Tar Heel State have committed another $4.5 million for the training program.

Calling the Kettle Black

Georgia Gov. Sonny Perdue recently asked state officials in neighboring South Carolina and Alabama to work with him in bringing some "sanity" to rising incentive packages set up by the three states to lure automakers. The question we'd like to pose to Gov. Perdue is this: Just when did the idea come to your mind, before you approved a $322 million incentive package for DaimlerChrysler to build a $800 million truck/van plant near Savannah, or after?

Louisiana's Wetlands are Focal Point of Big Oil

About 25 percent of the nation's energy is being threatened by the loss of natural wetlands in southern Louisiana. To give you an idea of the level of the threat, the city of New Orleans was located 52 miles from the Gulf of Mexico 100 years ago. Today New Orleans is located 21 miles from the Gulf. Wetlands lost in Louisiana each year equal about 25 square miles and big oil is concerned. Pipelines throughout southern Louisiana that were under water when originally placed are now exposed. Shell Oil is doing something about it, as they should. The wetlands being lost are home to about a quarter of the nation's fisheries. But more importantly to big oil, the risk of damage to their delivery systems is at an all time high. Storm surges from hurricanes not only have exposed New Orleans, but also the facilities that bring natural gas from the Gulf of Mexico to processing terminals. It's been estimated by the Corps of Engineers that it will cost $14 billion (that's with a "b") to save Louisiana's coastlands. We hope big oil is preparing to pony-up.

Clean Sweep for the South in Best Drivable Cities Report

In a story published in 1997, we wowed you by revealing that the South had double the population of the Northeast, yet its major markets had one-fifth the number of vehicular hours of delay compared to major markets in the Northeast. Our discovery has been supported again by another study done by Bert Sperling, who also does Money magazine's annual most livable places in the U.S. survey. The Sperling study, called America's Most Drivable Cities, ranked Southern markets exclusively in its top 10. In its bottom 10 worst drivable cities, no Southern market can be found. In the ranking, Sperling considered vehicular hours of delay, road quality, climate and gas prices. Included in the study were the 77-largest markets in the U.S.

Top 10 Drivable Cities

1. Corpus Christi
2. Brownsville
3. Beaumont
4. Pensacola
5. Fort Myers
6. Oklahoma City
7. Birmingham
8. El Paso
9. Memphis
10. Tulsa

Bottom 10 Drivable Cities

68. Washington, D.C.
69. Seattle
70. New York
71. Detroit
72. Oakland
73. Boston
74. Denver
75. Chicago
76. San Francisco
77. Los Angeles

DHL Looks to Move Headquarters to South Florida

DHL, which is close to acquiring rival Seattle-based Airborne Express, is site searching Dade, Broward and Palm Beach Counties in South Florida to build a new headquarters campus that could total 300,000 square feet and house as many as 2,000 employees. The air carrier is already moving its U.S. operations center from San Francisco to South Florida.

Asurion Relocates from California to Nashville

Another relocation from California to the South has landed in Nashville. Asurion, North America's largest provider of enhanced services for the wireless communications industry, has relocated its headquarters from San Mateo to Nashville. The deal will result in 600 new jobs in Tennessee's capital city over the next three years. The privately held company, with revenues of $250 million, serves 10 million subscribers with roadside assistance programs, handset and data device insurance programs and warranty management plans.

Port of Savannah Expansion Could Create Over 10,000 Jobs

According to state government officials, a $120 million expansion of the Port of Savannah announced by Gov. Sonny Perdue in late July could create nearly 11,000 jobs throughout the state of Georgia by 2007. The port will add 2,100 linear feet of berthing space and over 100 acres for the handling and storage of containers. When the expansion is completed in late 2005, the Port of Savannah will have 10,000 linear feet of berthing space for container ships. That will give Savannah the capacity to become one of the largest container ports on the East and Gulf coasts. Currently, Savannah is the fifth-largest container port in the U.S. Total tonnage at the port has grown to just over 4 million tons in 1994 to over 11 million tons last year. The expansion will be paid for by the Georgia Ports Authority.

Jetblue Locating Maintenance Facility at Orlando International

Officials with New York-based JetBlue Airways have decided to build a $160 million maintenance and training facility at the Orlando International Airport. The low-cost airline will locate a hanger at OIA that will house 150 workers with salaries averaging about $50,000 annually. Jetblue will receive a minimum of $3.5 million in city, county and state tax breaks.

World's Fourth-Largest Plane Maker Chooses Jacksonville

Embraer, the fourth-largest manufacturer of commercial airplanes, has chosen Cecil Field near Jacksonville for a new facility. The Brazilian aerospace concern hopes the new plant will lead to U.S. government defense contracts.

American Eurocopter Breaks Ground In Columbus, Miss.

One hundred and eighty jobs will be created by American Eurocopter in Columbus when its 100,000-square-foot, single-engine turbine helicopter plant is completed. The company broke ground on the facility in August. The company is a subsidiary of France's European Aeronautics. The company is investing $11 million in the facility.

California-Based Nanotech Company Relocates to Hattiesburg

Officials with Hybrid Plastics announced this summer the relocation of their research facilities to Hattiesburg. The company works a revolutionary new nanotechnology that improves the thermal and mechanical properties of traditional polymers. It will be moving into a new 26,000-square-foot building in the Hattiesburg/Forrest County Industrial Park. About 25 jobs will be created.

Pork Processing Plant Will Create 1,000 New Jobs

Premium Pork Allied Producers have announced a $130 million, 1,000-job hog-processing plant in St. Joseph, Mo. The plant is being built on 60 acres. Incentives of nearly $15 million were secured by Premium to build the facility.

Donnelley Moving HQ to Research Triangle

R.H. Donnelley Corp. is relocating its corporate headquarters from New York to the Raleigh-Durham area. The publisher of yellow pages and other publications announced it would create 275 new jobs over the next three years. Donnelley has a 240-employee publishing plant in Morrisville, N.C. The company is traded on the New York Stock Exchange and is one of several high-profile companies that has recently announced headquarter relocations from New York to states in the South.

RF Micro Expanding Again

Greensboro, N.C.-based RF Micro Devices is expanding its operations in the Triad once again. The chipmaker is investing $40 million to build six-inch diameter wafers that contain thousands of microchips.

Hewlett-Packard Leases 700,000 Square Feet in Memphis

California-based Hewlett-Packard has closed a deal on a 708,532-square-foot building in Memphis. The computer manufacturer will use the facility for distribution and assembly work. About 600 jobs will be created when the facility becomes operational in November.

Florida, Georgia Water Riff Going to Supreme Court

While Alabama and Georgia are close to signing an agreement on water rights to the Alabama, Coosa and Tallapoosa river basin, Florida and Georgia are taking their gripes concerning the use of water from the Apalachicola, Flint and Chattahoochee river basin to the Supreme Court. On September 3, Georgia Gov. Sonny Perdue said Florida officials are asking too much over how much water should flow from the Peach State to the Sunshine State.

EDITORIAL

Utilities are Ramping Up -- That Means One of Your Best Southern Site Searching Friends is Back

By Mike Randle

For decades, the South's utilities were the second-most powerful economic development entities at creating jobs in the region. Some folks would argue that their utilities were more powerful than their state economic development agencies at making your deal a reality during that time. Regardless, one thing is for certain: when the prospect of deregulation -- not the passing of deregulation by state lawmakers -- swept the region in the 1990s, many economic development departments of major utilities in the South were gutted, if not dismantled altogether.

Why did many of the South's utilities feel such a sense of urgency in the mid-to-late 1990s to get out of the business of treating site searchers like royalty, while never admitting or announcing that they were moving in that direction? Well, the primary reason must have centered on the assumption that under deregulation, major utilities in the South would sell their product outside of their designated territories -- or outside the state they represented -- therefore, there would no longer be allegiances to their historical territories. If that were the case, what's the utility's motivation to operate a very expensive department of economic development professionals designed to bring business to their state, when much of their product -- presumably -- would be sold out of state?

By the way, the reason utilities in the South never announced a downsizing of their economic development departments had to do with one thing: a little chance scenario where deregulation was not passed by state lawmakers in the time frame that it was supposed to pass. If you read articles on the subject and the debate surrounding it back in the mid-1990s, we were all supposed to be enjoying lower utility rates by now as a result of dereg. Uh, someone missed that deadline.

I witnessed the gutting of utility economic development departments over the years personally. I recall visiting Florida Power in 1992. There, Ed Schons showed me the first computer disc I had ever seen that was chock-full of data any site searcher would need. At the time -- pre-Internet -- it was cutting edge marketing. Schons' economic development department, I would estimate, had about 30 employees in 1992. By the end of the '90s, Schons was the only one left in the department.

The close-the-hatch mentality of utility economic development groups in the '90s wasn't exclusive to Florida Power (now Progress Energy). In fact, nearly every major utility in the South downsized their ED departments. There were some exceptions. Mississippi Power and SCANA come to mind. With dereg looming, those two continued to get their hands dirty working deals. But Southern Company cousins of Mississippi Power, such as Alabama Power and Georgia Power, reduced their departments dramatically. That's changing.

Now it's 2003 going on 2004. Interestingly, economic development departments of utilities in the South are ramping up to assist your deal like they did for decades before the prospect of dereg blew their minds. Even TVA is back in the game. The expansion of utility economic development groups is a strong indication that the prospect of deregulation has dimmed in many states in the South. That's probably a good thing for site searchers.

At any rate, it's very encouraging to see economic development departments of utilities throughout the region figure out that what they did for more than nine decades wasn't such a bad thing after all. It's also a secure feeling that the folks charged with delivering one of the most basic and important products in our daily lives -- energy -- is apparently out of entrepreneurial endeavors, something they failed at miserably in the trading sector.

QUIZ ANSWER

The Army Corp. of Engineers is responsible for rerouting water flows into the Everglades as a result of their massive projects in the 1950s and '60s aimed at reclaiming wetlands. This new "land" was bought by big agribusiness concerns for pennies and subsidized by the federal government. The element (the answer to the Quiz) spewed into the Everglades by those same big agribusiness concerns located south of Lake Okeechobee is (c) phosphorus. Editor's Note: The Everglades is the South's most sensitive environment as well as one of its most spectacular (have you ever driven Alligator Alley?). In a time when low-wage manufacturing is closing its doors like never before in the South, why would Florida's governor, Jeb Bush, give any assistance to big sugar plantations that pay below even low manufacturing scale, while polluting one of the most precious environments in the South?

July

QUIZ

Georgia officials are anxiously awaiting an announcement by DaimlerChrysler AG officials on whether a site near Savannah will indeed be where the massive automaker will build its next U.S. assembly plant. The proposed commercial truck facility (vehicles not purchased by individual consumers), if built, is expected to house 3,000 workers with an investment of at least $800 million. The question posed to you is, how much money has the State of Georgia and communities in the Savannah region already invested in the preparation of the site located in the town of Pooler? (a) $179 million (b) $0 (c) $60 million (d) $650,000

(Scroll down for answer)

Steel Plant Chooses Moss Point, Miss.

The largest steelmaker in the UK has chosen the Mississippi Gulf Coast town of Moss Point for its first U.S. plant. Corus Bi-Steel, the third-largest steel company in Europe, is building a facility to produce bi-steel, a product used in the construction, defense and security industries. The company is expected to invest $20 million in the deal and hire up to 250 workers.

Study Shows Silicon Valley Hard Hit, But Austin Hit Harder

San Jose, Calif. has made news over the last couple years as one of the hardest hit areas in the country during a two-and-a-half-year economic slowdown. But a new study shows that Silicon Valley hasn't lost as many computer and electronic products manufacturing jobs as has the Austin, Tex. area, which is known as Silicon Hills. Since mid-2000, the Silicon Valley has lost 29.3 percent of its high-tech manufacturing jobs, while Austin's Silicon Hills has lost 32.4 percent of its high-tech jobs. The study was done by Palo Alto, Calif.-based Center for Continuing Study of the California Economy. Stephen Levy, the director of the Palo Alto think tank said the study was done to point out that California's economy has suffered from a perception that it is leading the nation in lost jobs. Actually, California and Texas have led the nation in lost jobs.

Georgia Governor Meets with Audi Officials

New Georgia Gov. Sonny Perdue's first recruiting trip abroad included a meeting in Germany with officials with Audi AG. Perdue made it clear to officials with the German automaker during the two-and-a-half-hour meeting that Georgia would be an attractive location for Audi's first North American assembly plant. Rumors have been floating that several foreign automakers, including Audi, Mitsubishi, Volvo and Kia are considering building original equipment manufacturing plants in the U.S. for the first time.

Markets in the South Score Well in Job Creation Study

The Milken Institute's Best Performing Cities Index, which was published recently, measures job creation in U.S. metros. This year's ranking showed that Fayetteville/Rogers/Springdale, Arkansas is the No. 1 market per capita in job creation in the U.S. Other markets in the South making the top 10 in job generation include Fort Myers, Palm Beach and the Texas/Mexico border markets of Laredo, Brownsville and McAllen, Tex. Outside the South, Las Vegas, San Diego, San Luis Obispo and Monmouth, N.J. cracked the top 10 metros in job creation.

Biggest Automotive Deal in Arkansas History Announced

Arkansas isn't home to an automotive assembly plant ... yet. Furthermore, the Razorback State trails neighboring Tennessee by light years in the number of automotive suppliers operating shops. But if a deal announced in mid-July is any indication that the automotive industry has discovered Arkansas, then Tennessee officials need to take note. DENSO Corp., the world's third-largest automotive parts maker, a company that knows Tennessee very well because of its plants there, has crossed the Mississippi River into Arkansas for its latest venture. DENSO announced it is building a $35 million, 225,000-square-foot facility in Osceola, which is located in the Mississippi Delta region north of Memphis. The company is expected to hire 500 new workers at the plant where heavy-duty radiators and air conditioners will be manufactured. Like many Japan-based automotive concerns, the deal announced is most likely a conservative one. Expect the job total to double when the plant is fully operational in a few years.

Toyota Expanding Alabama Engine Plant

Like Honda, Nissan and other Japanese automotive deals done in the South over the years, Toyota has announced it is expanding its Huntsville, Ala. engine plant just after the paint has dried on its new facility. The expansion will add over 400,000 square feet to the existing plant, which just recently opened. Toyota will invest $20 million in the deal and add 150 workers. The massive Japanese automaker announced in the spring another engine plant in Jackson, Tenn. If history repeats itself, expect that facility to expand right after it opens two years from now.

Half of Forbes 10 Best Places for Business in the South

Today, the cost of doing business has charged to the top of most site selection factor lists. The editors of Forbes have noticed. Their recently published annual ranking of the nation's Best Places for Business and Careers added the cost of labor, energy, taxes and office space into the ranking's methodology. Additionally for the first time ever, the ranking factored in crime rates, housing costs and net migration. Needless to say, with that methodology being used, many Southern markets fared well. Austin, Raleigh-Durham, Atlanta, Dallas and the D.C./Northern Virginia region all made Forbes top 10 best places for business. Outside the region, Boise, Madison, Wis., Provo, Omaha and Des Moines made Forbes top 10.

Alabama, Mississippi Band Together

In an unprecedented partnership announced in July, Alabama Gov. Bob Riley and Mississippi Gov. Ronnie Musgrove signed an agreement to market the border between the two states to expanding and locating industry. During the signing ceremony, Gov. Musgrove said that the agreement will change the way economic development is practiced "in the South and in America." The two states have been in the running for several automotive assembly plants in the last several years. In fact, of the last five new auto assembly plants announced in the U.S., Alabama and Mississippi have landed three of them. It is believed by many in the economic development profession that the partnership between the two states is the first of its kind in U.S. history.

TI Building $3 Billion Chip Plant

Texas Instruments (TI) announced it is building a $3 billion chip factory in Richardson, which is located near the University of Texas at Dallas (UTD). The plant will house over 1,000 workers. The deal is the first big one turned since Texas legislators passed two critical economic development bills in June, including one that sets aside $295 million to recruit selected large projects to the state. Texas Gov. Rick Perry is sending $50 million to UTD for research that will compliment the new Texas Instrument facility. Officials with Dallas-based TI insisted that the funding would have to be made for the Dallas area to secure the high-tech plant, the first new semiconductor facility to announce in the South since 1996. Texas Instruments operates chip plants in Europe, Asia as well as Texas.

Two Small Southern Markets Top U.S. in Unemployment Rate Improvements

Florence, Ala., located in the northwest corner of the state and Rock Mount, N.C. located east of Interstate 95, are No. 1 and No. 2 respectively in unemployment rate decreases over the last year. Recent numbers produced by the Bureau of Labor Statistics show that Rocky Mount reduced its unemployment rate by 2.1 percentage points from May 2002 to May 2003 and Florence led all markets in the U.S. during that time with a 2.4 percent reduction.

FedEx Ground Building Hub in Maryland

As part of Memphis-based FedEx's nearly $2 billion expansion strategy, Hagerstown, Md. has been chosen for a 335,000-square-foot ground distribution center. FedEx officials announced that the Maryland ground distribution hub is the first of 10 it plans to build in the U.S. over the next six years. The rest of FedEx's Ground division growth strategy consists of the expansion or relocation of more than 300 pickup and delivery terminals and the expansion of 23 existing ground hubs.

California Pharma Relocates HQ to Oklahoma

Norman, Okla. is an unlikely location for a pharmaceutical relocation from Palo Alto, Calif. Regardless, Norman is exactly where Yamanouchi Pharma Technologies is setting up shop in a new 60,000-square-foot research, development and headquarters facility near the University of Oklahoma. The company is investing $40 million and bringing 200 new jobs to the Norman area.

Power Costs in Kentucky, West Virginia Lowest in U.S.

The U.S. Department of Energy released its annual ranking of energy costs and it showed that Kentucky has the lowest costs of electric power in the U.S. Kentucky's average cost of electricity is just over 3 cents per kilowatt-hour. The national average is 5.04 cents per kilowatt-hour. West Virginia followed Kentucky as the Southern state with the second-lowest electric power costs.

Texas, Florida Top California in Housing Starts

From July of 2001 to July of 2002, Texas and Florida were the top two states in the country in new housing starts. Both states topped California, even though that state has a much larger population. Texas led all state with 149,208 new homes built and Florida followed close behind with 147,377. California came in third with 130,779 with Georgia (87,909) and North Carolina (76,480) rounding out the top five.

QUIZ ANSWER

Various entities in the State of Georgia have invested $60 million (c) in the preparation of the Pooler, Ga. site for DaimlerChryler's proposed Sprinter Van assembly plant. However, to date no announcement has been made on whether the automaker will go ahead with plans on the plant.

June

Nissan Expands in Tennessee

Nissan North America Senior Vice President Emil Hassan announced on June 25 that the Japanese automotive giant is expanding its Smyrna, Tenn. assembly plant and its engine facility in Decherd, Tenn. The $250 million expansion will create 1,500 additional jobs.

The expansion of the 22-year-old plant in Smyrna will allow Nissan to produce the popular Pathfinder sport utility vehicle in Tennessee. The Pathfinder will be added to Smyrna's lineup beginning in the fall of 2004. Already in production at the facility are the Nissan Maxima, Xterra, Altima and Frontier pickup truck.

Just last week, The Harbour Group, a Michigan-based consulting firm, rated Nissan's Smyrna plant the most productive automotive manufacturing facility in North America.

More than 950 automotive-related businesses employ over 150,000 Tennesseans, representing 33 percent of the state's manufacturing work force. Tennessee's automotive industry annual payroll is estimated at more than $6.3 billion.

Northrop Grumman Adding 2,000 Workers in Mississippi

Northrop Grumman officials announced on June 9 that its Ship Systems division is converting a plant on the Mississippi Gulf Coast into the nation's first advanced composite manufacturing facility for U.S. Navy and Coast Guard ships. The company is expected to hire up to 2,000 workers who will begin work on San Antonio Class amphibious transport dock ships that are being built in Pascagoula, Miss. and New Orleans.

Nissan's Newest Plant Opens in Canton, Miss.

Nissan Motor Co. held an enthusiastic official opening of its Canton, Miss. auto plant on May 27. The 3.5 million-square-foot facility is Nissan's first new assembly plant in 20 years. At full production, which is expected to be next year, the facility will house over 5,000 workers and produce 400,000 vehicles a year.

Texas Reorganizes Economic Development Efforts

On June 1 Texas legislators passed two new economic development bills that will move state economic development efforts from the former Texas Department of Economic Development to an agency under Gov. Rick Perry's control. Senate Bill 1771 sets up the Texas Enterprise Fund for economic development. House Bill 7 also passed. That bill allocates $295 million from the state's rainy day fund for economic development in the state.

Five Southern Markets Make Forbes "Best Places for Business" Top 10

In a recent edition the editors of Forbes ranked their best places for business. This year's annual ranking placed more emphasis on the cost of doing business. Five Southern markets made the magazine's top 10 best places for business. They were Austin (No. 1); Raleigh-Durham (3); Atlanta (4); Dallas (9); and Washington/Northern Virginia (10).

May

Citibank to Stay, Expand in Jacksonville

Officials with Citibank have decided to stay in Jacksonville and nix a move to Birmingham. The financial services giant will invest $90 million on Jacksonville's Southside for a new credit card operation and technology center. Citibank will add at least 400 jobs to its current workforce of 3,400 in Jacksonville. Plans call for 500,000 square feet of office space to be constructed during the expansion.

Thirteen Power Plant Projects Delayed in Texas, 11 Cancelled

Texas, which deregulated its electric power industry last year, is facing an oversupply of electric power. The problem of oversupply in Texas is so extreme that 13 new power plants, which were already scheduled to break ground, have been delayed. The surplus of power has also cancelled the development of 11 other power plants. Since 1995, electric generation is Texas has increased by 22,000 megawatts. The oversupply of power has led to environmental groups leading the charge to shut down older power plants that pollute the most. State officials project the Texas wholesale power market won't return to normal levels until 2007.

Toyota Eyeing Texas' Air Quality Situation Carefully

In the winter quarter, Toyota officials announced a $750 million, 2,000-employee pickup truck assembly plant in San Antonio. Not unlike recent deals made by Honda, Nissan and Hyundai in the South, the Toyota plant will likely grow to $2 billion in investment and 4,000 jobs prior to opening in 2006. But there's a threat to that expansion and others like it in the Lone Star State if funding to a Texas Emissions Reduction Plan isn't carried out. Texas officials say they must come up with $375 million in funding for TERP to appease the Environmental Protection Agency. The EPA has made it clear that Texas will fall out of federal compliance by 2007 if it does not fund TERP properly. A state legislative proposal that proponents say could help San Antonio and other markets in Texas remain in compliance with federal clean air laws passed the Texas House in May. The proposal, which includes a $225 first-time vehicle registration fee, may or may not be unconstitutional. And even if it is deemed constitutional, it might not raise enough cash to fund TERP to levels that would meet EPA approval. Toyota officials are watching the situation carefully. Officials with the automaker have said that one of the key reasons San Antonio was chosen was the fact that the Alamo City was in attainment with federal clean air standards. Those same officials said recently, though, that if San Antonio fails to remain in attainment, it will concern them greatly. If Texas fails to remain in attainment by 2007, the EPA would slam the state by freezing federal highway funds and putting in place pollution caps. Those caps would stop all new manufacturing expansions in areas of the state that reach non-attainment status.

Mobility Study Ranks South's Most Congested Urban Markets

According to its latest Urban Mobility Study, the Texas Transportation Institute says the South's roadways are getting more congested. The study maintains that the time penalty for making "rush hours" trips is greater and that the period of time that travelers might encounter traffic congestion is longer. The study also showed that the number of streets and freeways in the South that are congested is higher. The following are the most and least congested Southern metros based on annual hours of vehicular delay.

Most Congested Markets in the South

Market *Hours

1. Wash. D.C./MD/VA 84
2. Houston 75
3. Dallas/Ft. Worth 74
4. Atlanta 70
5. Miami 69
6. Orlando 66
7. Austin 61
Ft. Lauderdale 61
9. Baltimore 50
10. Charlotte 47

Source: Texas Transportation Institute. *Based on annual vehicular hours of delay.

Least Congested Markets in the South

Market *Hours

1. Brownsville 5
2. Laredo 6
Corpus Christi 6
4. Oklahoma City 12
Beaumont 12
6. Fort Myers 16
7. Tulsa 19
8. Kansas City 19
9. El Paso 21
10. Richmond 22

Source: Texas Transportation Institute. *Based on annual vehicular hours of delay.

Crime Rate at 30-Year Low in Florida

Crime is increasing in most states in the U.S. That's natural. It usually does in a struggling economy. But crime is not increasing in the Sunshine State. In fact, the index crime rate, which is based on murder, robbery, assault, burglary, larceny, auto theft and forcible sex declined by 3.3 percent in 2002 to a rate that hasn't been matched in 30 years. Is it a coincidence that the state's crime rate is bucking the trend and dropping when Florida is the only state in the nation that has seen 11 straight months of positive job growth?

New York Life Picks Atlanta

New York Life has selected Atlanta for a new corporate data center. The mutual insurance company based in New York City, looked at Charlotte and Dallas before selecting metro Atlanta. The insurance carrier is moving into a 95,000-square-foot facility that was designed to be a BellSouth Entertainment data center. New York Life will increase the size to 135,000 square feet. The company is investing $100 million in the project and will employ 140.

Boeing Relocating Division to St. Louis

St. Louis is the new home of Boeing's Future Combat Systems division. The move from California will include some relocated positions as well as new hires in St. Louis. Boeing officials said the new headquarters of the division will house 500 employees. The Future Combat Systems division is digitizing the Army's ground forces.

Atlanta Breaks Out Big Guns in Bid for HQ

Atlanta officials revealed in early May a high-powered collection of governmental, academic, business and diplomatic leaders that will make up Hemisphere Inc., a non-profit whose sole goal is to land the headquarters of the secretariat of the Free Trade Agreement of the Americas. Already with $2 million behind the effort and the promise of more if needed, Hemisphere Inc. will now turn its attention to leaders in Latin America. Members of the group include Gov. Sonny Perdue, Atlanta Mayor Shirley Franklin, as well as board members representing Delta Air Lines, BellSouth, UPS, Coca-Cola and other corporate giants headquartered in Atlanta. The proposed free trade region will run from Chile to Canada including every country except for Cuba. Miami, which might be the front-runner in the quest for the headquarters, formed its group two years ago. Other markets pursuing the FTAA HQ include Mexico City, Panama City, and the Port of Spain in Trinidad and Tobago. Reports from throughout the region say that a free-trade agreement among all countries won't be hammered out until at least 2007.

Big Automotive Supplier Network Expected to Form in Texas

With no existing supplier network to speak of, the San Antonio/Austin, Tex. regional economies are expected to benefit in the next few years from up to 100 new automotive suppliers as a result of Toyota's decision in the winter to build an $800 million vehicle plant near San Antonio. Few if any existing suppliers located in automotive states in the South such as Alabama, Tennessee, Kentucky or Mississippi will be able to supply the Toyota plant because of San Antonio's far western location in the Southern Automotive Corridor. Which is exactly why the San Antonio choice by Toyota was a curious one. We've heard that more than one large automotive supplier was upset that Toyota officials chose Texas. It means that suppliers will be unable to serve the facility by simply expanding existing operations in the central South. They will be forced to spend hundreds of millions of dollars collectively on new facilities in South Texas. In a related story, we received information in early May that Ford was scouting sites in South Texas for a new assembly plant. Could it be that Toyota officials eased supplier concerns by explaining to them that it's not just Toyota you'll be supplying by building in Texas, but two or three more assembly plants?

DaimlerChrysler Incentives Top $300 Million

It's been awhile since a new automotive plant has received $300 million in incentives, but that's what Georgia gave up to lure DaimlerChrysler to a site near Savannah. Counting state and local tax exemptions, reduced rates for use of the Port of Savannah, roads, rail and other infrastructure, a museum on site, the purchase price of the site itself, free English language classes for German execs, their spouses and children and a critical $70 million in upfront incentives and bonuses and the total comes to $322 million that DaimlerChrysler will ultimately receive to build its Sprinter van plant in Pooler, Ga. The total comes to about $80,000 per job of the 4,000 to be hired at the plant. Interestingly enough, South Carolina was willing to offer more for the plant. Their incentive proposal totaled $346 million, however, it did not include the site or upfront cash and tax exemptions. Site work on the DaimlerChrysler plant is expected to begin this summer.

No Takers Yet for NC's New Incentives

For years many economic development officials in North Carolina complained about the vanilla incentive programs that were available for new and expanding industry in the state. They pointed to major projects lost such as Mercedes to Alabama 10 years ago and Eli Lilly to Virginia last year as proof the Tar Heel State's incentives weren't competitive. In response, Gov. Mike Easley passed the North Carolina Economic Stimulus and Job Creation Act. The new incentive plan, which became law in the fall of 2002, was hailed throughout the state's economic development community. The main part of the plan gives back qualifying new or expanding companies much of their state withholding taxes. In fact, up to $120 million has been set aside this year alone for the new incentive plan. Yet, to date, no companies have applied for the new incentives. You can bet, however, that when the economy changes for the better, those applications will be rolling in.

Alabama and Florida Luring Lockheed

Reports from Denver confirm that economic development representatives from Alabama and Florida have talked to Lockheed Martin officials about relocating their aerospace operations in Colorado to one of the states. Both Alabama and Florida have promised large tax breaks, lower operational costs and cash grants if the company relocated. It's unclear whether Lockheed Martin contacted the two states, but it's likely considering Alabama and Florida have proposals on the table at the same time. Lockheed Martin Space Systems is one of Colorado's largest employers and is headquartered in Denver. The company designs, develops, tests, manufactures and operates a variety of advanced technology systems for military, civil and commercial customers. Primary products include space launch systems, communications satellites, missile systems and interplanetary spacecraft. Lockheed Martin's astronautics operations are located in Huntsville, Ala. and Cape Canaveral Air Force Station, Fla.

Samsung Upgrades Semiconductor Plant with $500M Investment

Samsung is spending $500 million to upgrade its existing semiconductor facility in Austin, Tex. The project will add 40,000 square feet of clean room space and the facility will be updated from 130-nanometer to 90-nanometer technology. Samsung employs 950 workers at its Austin facility. The expansion is expected to create 300 new jobs. It's the first major expansion of a semiconductor plant in the South in five years.

Infonxx Adding 2,000 Jobs in San Antonio

A Pennsylvania-based call center operation is adding 2,000 jobs in San Antonio. Infonxx, a directory-assistance call center operation that provides advanced information services has secured 25,000 square feet of space near where it occupies 17,500 square feet of space in the Alamo City. The company currently employs 500 in the Texas market.

Boeing Moving All of Delta Work to Alabama

Boeing Integrated Defense Systems is closing its Pueblo, Colo., Delta launch missile facility and moving all assembly operations to its plant in Alabama. Called the "rocket ranch" by Boeing officials, the three-year-old missile assembly facility in Decatur is located on the Tennessee River in north Alabama. The move is one of consolidation and will include the relocation of almost 200 Pueblo-based workers to Decatur. Boeing tests and assembles the Delta IV rocket in Decatur.

Kansas Approves $500 Million for Boeing

In what is most likely the largest incentive package offered a company in economic development history, the Kansas Senate and House overwhelmingly approved in May $500 million in state backed bonds to help Boeing create jobs at its huge plant in Wichita. Boeing officials have said they will use the money to pay for research and development and for tooling the facility for new components of the new 7E7. Officials in Puget Sound, where all of Boeing's final assembly plants are located, are worried Boeing will use the incentives to prepare the Wichita facility as the final assembly site for the 7E7. The 7E7 work would create 4,000 new jobs at the Wichita plant. Under the incentive proposal, income tax on the 4,000 new Boeing workers making $50,000 or more a year would be withheld for 20 years, a total of $200 million. That would pay more than half the interest on the bonds. Boeing is responsible for paying the remaining interest.

Michelin Investing $200M in Ardmore, Okla. Tire Plant

Michelin North America is adding 45 new employees and spending $200 million at its tire plant in Ardmore, Okla. The South Carolina-based tire manufacturer took advantage of a new incentives package passed by the state in 2002 that is directed at tire makers. Michelin will expand the size of the plant and add production capacity.

Verizon Hiring 1,000 in Rutherford County, Tenn.

Verizon Wireless announced it is opening a 160,000-square-foot call center in Murfreesboro that will house 1,000 workers. The telecommunications company signed a 10-year lease on a building in this city located southeast of Nashville. The center will open for business in October.

April

QUIZ

The year before Mercedes-Benz announced a new assembly plant in Alabama in 1993, the state saw less than $20 million in automotive manufacturing-related investments. Now, 10 years later, automotive manufacturing investment has improved in the state. How much did automotive industries invest in Alabama in 2002? (a) $156 million (b) $2.1 billion (c) $912 million (d) $561 million

(Scroll down for answer)

Tennessee Gov. Bredesen Welcomes Toyota to Tennessee

In the administration's first major economic development announcement, Tennessee Gov. Phil Bredesen and state Economic and Community Development Commissioner Matthew Kisber unveiled plans for Toyota to build a state-of-the-art engine block plant in Jackson, Tenn. The new $124 million facility will be located in the Jackson/Madison County Airport Industrial Park and is expected to generate approximately 200 new jobs. The plant will begin production in late 2005.

"We are pleased to have the opportunity to expand our business in Tennessee," said Dennis Cuneo, senior vice president of Toyota Motor Manufacturing North America, Inc. "As Toyota grows its manufacturing operations in North America, this plant will be a vital element in our expanding engine assembly."

There's not a lot of talk on the street as of yet, however, it looks, sounds and smells as if another major automotive assembly plant is on the horizon for the South

By Lee Burlett

We are working on the spring edition and one feature we have coming to you are profiles on what we believe are the South's best automotive assembly plant sites. Doing the research on these profiles has been tough considering the fact that Alabama, Georgia, Mississippi and Tennessee officials have been reluctant to offer information on prospective automotive assembly plant sites. Why? They have gladly offered similar information on specific sites in the past. Something must be up.

And now we find out that Toyota has announced it will build another engine plant in the central South (see above) when it already has one in Huntsville. Huntsville and Jackson, Tenn. are both about 700 miles from Toyota's newly announced assembly plant in San Antonio and only about 125 miles from each other. Certainly the Huntsville and Jackson engine plants are not going to supply the San Antonio pickup truck plant. So, Toyota's choice of Jackson for an engine plant is very curious.

And then, on April 2, we get news that East Mississippi and West Alabama officials are joining forces to attract major economic development projects, such as original equipment manufacturers, like, say an automotive assembly plant. Both of those areas are rural regions of the states. It is unprecedented that two states would work together like that unless they have their sights set on another automotive facility. Could Toyota be planning another assembly plant in the central South in Alabama, Georgia, Mississippi or Tennessee on the heels of the San Antonio announcement in February? Stay tuned.

Nation's First Major Desalination Plant Opens in Tampa Bay

The nation's first seawater desalination plant built to be a primary source of drinking water is now providing water to homes and businesses in the Tampa Bay area. At full output the plant provides 25 million gallons of water a day or 10 percent of the area's drinking water. The plant is located on Tampa Bay.

Here's a Blockbuster: Ford Site Searching in South Texas

By Mike Randle

On the heels of Toyota's announcement made in February that it would build a pickup truck plant in San Antonio, Ford officials have been sighted in South Texas during the weeks of April 7 and April 14. Confirmation that officials representing Ford had indeed searched sites in South Texas was made by me personally on April 15th. The information I received was unusual in that it provided much more than we ever could have imagined from an initial site search. From what we gathered, Ford is looking to build a pickup truck plant in South Texas that would include union participation. We also gathered information that if the the automaker opened a plant in Texas, they would pay wages that are about half that of what the company pays on average in Michigan, or about $18 an hour.

This blockbuster batch of information we received this week makes perfect sense. During Toyota's site search, we questioned the choice of San Antonio for the simple fact that no automotive supplier network exists in South Texas. In other words, suppliers would be forced to spend hundreds of millions of dollars to set up shop just to service a single OEM facility. That's why we thought the Marion, Arkansas site, Toyota's apparent second choice, was a better location simply because it was close enough to tap into a large, existing supplier network located in Tennessee, Kentucky, Alabama and Mississippi. The Marion site would also save Toyota up to $200 million over the course of 10 years in logistics.

But Toyota officials must have known something we didn't know. Most likely they won over the suppliers with an argument that centered on something like this: "You won't be servicing just our plant. You'll be supplying three or four new plants." How else could they rationalize the choice of San Antonio to their suppliers? They knew other automakers would follow. But a domestic automaker? Now that's a lightening bolt from left field. No, make that a screaming meme from the back forty!

If Ford, or any domestic automaker builds a new plant in the American South it would be the first in over 30 years, outside of the Saturn plant built by GM in Spring Hill, Tenn., in the 1980s. But the mere fact that Ford is looking in the South is big, big news. Because if Ford did build a pickup truck plant in Texas, GM and most likely Chrylser would quickly follow suit. And, once built, if those pickup truck plants showed profits and productivity -- which they would -- that greatly exceeded their existing plants in the Midwest, how long would it take for the domestics to relocate their car plants to the South?

Let's put this first tidbit of information regarding Ford's site searching in the American South in perspective. If a domestic automaker locates an assembly plant in the American South, it will be the beginning of the end of the automotive industry in the Midwest as we know it today. If it occurred, it would be one of the most significant stories in the history of American business, commerce and industry. That's how big the story would be.

Big Deal Sniffing in the Central South

A factory that could bring 2,000 jobs and $1 billion in investment is on the verge of siting in the central South. Without doubt it's another automotive assembly plant and we believe it to be a Japanese automaker. The latest visit by officials of the unknown automaker was made in Meriwether County, Ga., during the week of April 7. Representatives of the company gave a look at a 1,900-acre greenfield site near I-85 in Meriwether County. The site is located just across the county line from the Coweta County city of Grantville. Word on the street has it that Georgia has one other site in the running for the facility and Alabama, Tennessee, Mississippi and Arkansas are in the running for the plant as well.

Two More Auto Suppliers Choose Alabama

Fort Deposit and Opelika, Ala. are the latest small markets in the state benefiting from the automotive industry. Mando Corp., a Hyundai supplier, will announced in April it will build a $30 million brake, steering and suspension system plant in Opelika that will employ 150 workers. Sejong Industrial and Arvin Meritor announced they will build a $10 million facility in Fort Deposit that will manufacture exhaust systems and mufflers for Hyundai. Hyundai is currently constructing a $1 billion assembly plant just south of Montgomery, Ala. that will make SUVs and sedans in 2005.

Worldcom Becomes MCI. Clinton, Miss., Loses HQ to Northern Virginia

Worldcom, the Mississippi born and bred telecommunications giant that declared bankruptcy after it revealed over $11 billion in acounting errors, is moving its Clinton, Mississippi-based headquarters to Ashburn, Va., which is the headquarters of the MCI Group. Already 4,000 MCI employees work at the Northern Virginia location. MCI will keep about 700 employees at the Clinton complex, down from about 2,800 a few years ago. The three-building Clinton complex includes 84 acres and 420,000 square feet of office space. The remaining employees will consolidate to one of the three buildings, fueling speculation that MCI will sell or lease the other two large offices.

QUIZ ANSWER

Alabama's automotive industry investments did indeed improve in 2002. Ten years after securing its first assembly plant, Alabama's automotive industry investments have risen from $20 million in 1992 to (b) $2.139 billion (that's with a "b") in 2002. The figure represents 67.6 percent of all manufacturing investments made in the state in 2002.

March

Hyundai Suppliers Lining Up in Alabama

Parts suppliers to the Hyundai assembly facility being built in Montgomery, Ala. are landing in the state in large numbers. HS R&A, headquartered in Yangsan, Korea, has selected Enterprise, Ala. for a new 200,000-square-foot facility that will produce weather stripping, tubing and hoses for Hyundai's Sonata and Sante Fe Next Generation automobiles. The project will have an investment of $20 million and 350 jobs are being created.

Another Hyundai supplier, Hwashin Co. Ltd. has picked the city of Greenville for its first U.S. parts facility. Hwashin is investing $70 million and creating 400 new jobs at the new plant that will make chassis and body parts for the Sonata and Sante Fe. The latest announcements come on the heels of Hyundai suppliers announcing projects in Montgomery and Opelika, Ala.

Wal-Mart Selects Shenandoah Valley for Distribution Center

Rural Rockingham County, Va. will benefit from a new $55 million distribution center being built by Wal-Mart. The 1.2 million-square-foot facility will be located off Interstate 81 in Mount Crawford, Va. Wal-Mart is expected to employ 1,000 at the center. The deal is the largest to date for Virginia Gov. Mark Warner since taking office in 1992. Virginia beat out Maryland and Pennsylvania for the new Wal-Mart project.

Republic Airlines Selects Louisville for HQ and Maintenance Facility

Republic Airlines announced that it has selected Louisville International Airport as the location for the company's corporate headquarters, crew base and primary aircraft maintenance facility. The airline is in the process of completing its DOT and FAA certification to fly 50-passenger regional jet aircraft as a US Airways Express carrier. Republic plans to operate 20 Embraer 145 jet aircraft by 2004. The airline plans to employ a staff of 355 including pilots, flight attendants, maintenance technicians, managers and support staff.

Philip Morris USA Moving HQ from NYC to Richmond

Philip Morris USA is moving its corporate headquarters from New York City to the former Reynolds Metals corporate complex in Henrico County, Va. Through a major two-tier economic development project, Philip Morris USA will create 450 jobs at the new headquarters in Henrico County as well as invest more than $300 million in its manufacturing facility in the City of Richmond. Annual payroll at the headquarters location is estimated to be $83 million.

Roanoke County Lands 350 New Jobs

Minnesota-based Marvin Windows and Doors has chosen Roanoke County's Valley Gateway Business Park as the site of a new manufacturing facility for its line of Integrity Windows and Doors. The new facility is expected to create 150 jobs initially and Marvin is investing $32 million in the project. Marvin is the largest made-to-order window and door manufacturer in the world.

BB&T Announces Deal in North Carolina

On March 25th, Gov. Mike Easley announced that BB&T Corp. will create 300 new jobs over the next three years in Eastern North Carolina and invest $12 million in Wilson County with its commitment to construct a new loan-processing facility. The Winston-Salem-based bank is planning a 100,000-square-foot facility that will create jobs averaging $32,000 in salary per year.

Honeywell Announces Tulsa Expansion

Honeywell announced in March that the Tulsa, Okla. Repair and Overhaul facility is expanding and will gain the capability of adding electric power components found on commercial and military aircraft. The work to convert engine power to electric power will be done on commercial and military transport aircraft such as the 737, 747, 757, A320 and CRJ. Currently Honeywell employs 169 at the facility. One-hundred more jobs are expected to be created in the expansion of the Tulsa facility.

Michelin North America Expands in Ardmore, Okla.

Michelin NA announced plans recently to expand its tire manufacturing facility in Ardmore. The company's investment plan of $144 million is aimed at increasing the plant's capacity for producing larger tire sizes. The 1.5-million-square-foot plant currently employs over 1,800.

Memphis to Atlanta Route Approved in Alabama

Federal transportation officials have approved the Memphis-Atlanta highway route through the Tennessee Valley of Alabama. Construction of the highway is expected to take 20 years. The route through Alabama will parallel U.S. 72 before turning northeast near Decatur. It will then connect with I-65 and I-565 before turning into a Southern Bypass in Huntsville. The route then heads east between Guntersville and Scottsboro before reaching the Georgia border and Ga. State Road 20. Mississippi has already completed its section of the Memphis to Atlanta highway to the Alabama state line. Georgia is still in the planning stages of its section of the highway, which will run about 50 miles from the Alabama line before connecting to I-75 north of Atlanta.

February

QUIZ

Name the three Southern states with the greatest number of military personnel.
(scroll down for answer)

The Southern Automotive Corridor Takes Giant Leap to the West. It's San Antonio for Toyota

Officials with Japanese auto giant Toyota have confirmed reports that the company will build its sixth North American factory on land once set aside for a reservoir in southwest Bexar county near San Antonio, Tex. The decision is a maverick one at best, considering the fact that more than 80 percent of the Southern Automotive Corridor's automotive suppliers are located within a 350-mile radius of Alabama and Tennessee, two states that make up the center of the region's auto industry. Nissan's decision in 2000 to build a plant in Jackson, Miss., jogged the corridor to the west. This decision by Toyota to build in San Antonio means the Southern Automotive Corridor has leaped west.

The latest auto plant announcement in the South calls for a $750 million initial investment by Toyota and a projected opening day employment of 1,500. The company is expected to build pickup trucks at the facility. Other projections call for up to 15,000 spin-off jobs in Texas from the plant. In addition, the Port of Houston is expected to benefit greatly from the announcement with construction material, equipment, automotive parts and eventually cars moving across its docks. Toyota moved automobiles through the Port of Houston up until 10 years ago when it shifted shipments to ports on the West Coast.

Like Opelika, Ala. in the Honda site search four years ago, Marion, Ark. looks to be the bridesmaid in the Toyota site search. Marion is located just across the Mississippi River from Memphis. Toyota officials reportedly preferred the San Antonio site over Marion because of the market's proximity to Mexico and the massive potential of truck sales in the state of Texas.

In the meantime, Toyota has begun a site search for its seventh North American assembly plant. It is not known yet whether sites in Arkansas, Alabama, Mississippi and Tennessee that were eliminated in this latest search are in the running for this one. Rumor on the street says Toyota may land its seventh North American plant in Canada. Toyota currently operates plants in Kentucky, Indiana, California and Canada.

Alabama's Surging Automotive Industry

In 2002, auto assembly plants in Alabama produced 230,000 automobiles, ranking the state sixth among all Southern states with assembly plants. But a recent report done by the Alabama Automotive Manufacturers Association said that's about to change. The report claims that by 2005, Alabama's production of automobiles will surge past all Southern states except for Tennessee and Kentucky. Alabama auto manufacturers are expected to produce 760,000 cars in 2005. By then Hyundai will be in production and recent expansions by Mercedes and Honda would have come online. In 2002 Kentucky led the South with 1.2 million cars produced followed by Tennessee, Georgia, Texas, Virginia, Alabama, Louisiana and South Carolina.

Auto Industry Forecasting Firm Believes Toyota Headed for San Antonio

Michigan-based CSM Worldwide, a global automotive industry forecasting company, has officially predicted that Toyota Motor Corp. will build its newest North American assembly plant in San Antonio. "It's our assumption that it will be in Texas," said Michael Jackson, CSM's North American forecast manager. Jackson cites the fact that consumers in the state of Texas would be natural buyers of the pickup truck Toyota will be manufacturing. Jackson also cited auto suppliers in Mexico that could supply the plant if built in San Antonio.

What's SB&D's view? While we have correctly predicted the state or exact site of every new automotive assembly plant that has landed in the South since 1992 except for Honda, this Toyota site search is tough to call. Yes, we predicted nearly 12 years ago that BMW would go to South Carolina (we didn't pick the site) and we published a prediction that Mercedes would pick Alabama nearly 10 years ago. Our predictions got more specific later. We predicted Honda would land in Opelika, Ala. It built its plant in Lincoln, Ala. So we got the state right, yet lost out on the site. We also predicted Nissan would go to a site north of Jackson, Miss. Our easiest auto plant prediction? We published with great cockiness in the fall 2001 edition that Hyundai would pick a site south of Montgomery, Ala. They announced they would do just that in the spring of 2002.

Toyota's deal is filled with much more rumor than normal, a history by Toyota of maverick-style site decisions and an international angle. There is also a power struggle among Toyota's divisions. We hear the sales division wants San Antonio. We hear the manufacturing division wants Marion, Ark. We also have talked to plant managers of Toyota facilities in Indiana and Kentucky. They have told us the plant will be built in Marion. We also hear that it's not one plant, but two plants that Toyota will be building (one may be another engine plant on the heels of one being built in Huntsville).

So where is Toyota going to build? Our official prediction is this: Toyota is going to build in San Antonio, but don't be surprised if they build in Marion, too.

Economic Segregation More of a Northern Problem Than a Southern Problem

American City Business Journals, the largest publisher of local business publications in the U.S., recently completed a study that showed the North holds a higher gap between whites and blacks in income than does the South. ACBJ's study found that MSA's in the Northeast and Midwest had larger income gaps between whites and African-Americans than did metros in the West and South. In fact, 15 of the 20 metros with the worst racial economic gaps were located in the Northeast and the Midwest.

Fiscal 2003 Southern State Budget Deficits
(In millions)

Alabama $5
Arkansas 0
Florida 0
Georgia $450
Kansas $254
Kentucky $220
Louisiana $86
Maryland $590
Mississippi $97
Missouri 0
North Carolina 0
Oklahoma $292
South Carolina $331
Tennessee $322
*Texas 0
Virginia $950
West Virginia 0

*Estimated $12 billion deficit in 2004

Source: National Conference of State Legislatures

Shipyard Project

A Texas-based shipbuilder with a contract to build high-speed ships for the Navy is scouting sites on the Gulf Coast for a proposed $30 million shipyard that could employ as many as 3,000 workers. Bollinger/Incat USA has already inspected sites in Alabama, Florida, Mississippi, Texas, Louisiana for the large project.

QUIZ ANSWER

The Southern states with the greatest number of military personnel are Texas (108,835), North Carolina (86,594) and Virginia (80,132).

  
January

Editorial by Mike Randle

We Will Write it Again: "It's the States, Stupid!"

A Three-Point Plan to Boost the Economy

Since President Bush has been in office, we've informed you of several federal policies that have hindered if not slashed state revenues. The President's newest economic stimulus plan (remember, this is his second one in two years) is another initiative that will not help the states woeful budget situations. If anything, an already gloomy economic situation among our states may prove to be even darker if Bush's latest plan to improve the U.S. economy is passed.

In January there has been a tremendous amount of discussion in every major media outlet concerning how Mr. Bush's plan would work. Some say it will work, some say it won't. Regardless, we know what will happen. Unless federal money is steered -- no, poured -- to U.S. states, virtually every one of them will be forced to raise taxes this year (not three, four, or five years from now). These states will not only raise taxes on their citizens, they will target the corporate community as well and those tax increases will be in place well before anyone or any company will see a dollar from a federal tax reduction. State tax increases will simply offset any tax reductions made on the federal level, which is not an economic stimulus at all, but rather an economic standoff.

We've written it before and we'll write it again. Mr. Bush, states must run a balanced budget, unlike the federal government. If they are hurting, the entire "global" economy will be affected, not just the economy of the U.S. If you really want to stimulate the economy, get those printing presses running and pour money to the states. They are the real backbone to an economic stimulus. Why? Because states compete against each other and that's exactly what Corporate America and foreign companies wishing to expand here need right now -- some folks clamoring over them (with cash!) to get them to expand. In addition, a lower dollar will keep many of the lower wage companies here as opposed to moving to places they really don't want to go, such as China, in order to compete.

Now, combine solving the states' budget problems with a changed perception created by professional spinmasters that you employ who proclaim that the U.S. economy is not so bad after all -- and it's not -- then those companys' new products will also find some new buyers. Companies do not expand without the prospect of additional customers. Spin it, now.

Finally, don't fire first to start a war and proclaim today that we will not fire first. That statement alone will free up many corporate expansion plans, which will increase employment and, more importantly, release some surging tensions among us all. Firing first is just not the U.S. way. Yet, if they fire first, go get 'em George!

No Go for BNSF and Highly Touted Super Terminal Memphis

In 1995, Memphis officials launched the idea of a super rail and inland port terminal located just south of downtown on the Mississippi River. At the time, as many as five railroads were to meet at the site, forming the "super terminal." Not unlike the Global Transpark located in Kinston, N.C., which was touted in the early '90s as a super airfreight terminal, Memphis officials have found it difficult to get the project off the ground. News announced in December that Burlington Northern Sante Fe Corp. will not include the proposed Super Terminal Memphis in its plans as it expands Memphis area operations certainly won't help the prospects of the project. Instead, BNSF will follow competitor Union Pacific across the Mississippi River to Marion, Ark., where a massive intermodal yard is being developed. BNSF, it should be noted, is at the center of the Toyota site search for a new pickup truck facility. The company is weighing proposals to build a rail extension to a site in San Antonio that is critical to the Japanese automaker's decision to locate there. The other top site in Toyota's plans? It's Marion, Ark.

Delphi Officials Warn Employees Alabama Plant must Perform Better

Officials with Delphi Steering Systems, Northwest Alabama's largest employer, have warned the company's 2,800 employees and its union that the plant must improve its performance to stay open. In September, Delphi sold a former plant in North Alabama to the state of Alabama in a unique incentive deal worth about $15 million to the company. The deal was supposed to ensure the large Limestone County facility would stay open. That Delphi automotive supplier plant and one in Tuscaloosa have been added to the company's Automotive Holdings Group, a special group of plants that will see new staff support to work with employees and unions to improve productivity.

DaimlerChrysler Officials Finally Confirm New Georgia Facility

In the fall quarter, Georgia economic officials hailed the first major automotive deal in the state in decades. The deal, a truck assembly plant by DaimlerChrysler, would be the largest announced in Georgia history. But there was only one problem. The company, DaimlerChrysler AG, never officially announced they would indeed build the facility. On January 13, 2003, officials with the German automaker confirmed it would build the $1 billion facility on a greenfield site near Savannah, Ga. The plant is expected to be operational in 2006 and will produce approximately 110,000 Sprinter and Vito vans that will be sold under the Dodge name in the U.S. and Canada. However, officials with DC would not totally commit to a groundbreaking for the plant, citing "nervousness about the world economic and political outlook."

December

Georgia Governor-Elect to Promote Telecommuting

In an effort to reduce traffic and improve air quality in the capital city of Atlanta, Georgia Gov.-elect Sonny Perdue is planning a major push to promote telecommuting. The idea is not new, yet since the advent of the Internet experts have predicted major cities in the U.S. would see hundreds of companies using telecommuting to reduce costs and traffic congestion. To date that hasn't been the case. While Perdue will encourage private industry to increase telecommuting, he is targeting up to 25,000 government employees who work in the state to telecommute at least part-time. Perdue has even hinted he would pass legislation that could make financial incentives available to companies who use telecommuting with their employees.

Prospect of Energy Deregulation in the South Keeps Chalking Up Losses

Deregulation of the utility industry in the South will be slow to come. While Texas' venture into deregulation of its energy providers, which began January 1, 2002, has been met with mixed results, almost all utilities in the South prepared for deregulation in the mid-and-late 1990s that was sure to come. For some, it was the virtual elimination of economic development departments since dereg would essentially eliminate boundary allegiances. But late this year, utilities that downsized their economic development departments are now ramping them back up. Alabama Power is one example as is Duke Power. Tennessee-based TVA, which settled on a micro-regional economic development policy years ago, hired former Tennessee Department of Economic and Community Development Director Bill Baxter and John Bradley, the former economic development head of the Memphis Chamber in 2002. Other states in the South have delayed any discussion of deregulation for the near future. And GridSouth, a deregulation initiative involving Progress Energy, Duke Power and SCANA, all Carolina-based utilities, has closed up shop before it even opened shop, costing the energy providers nearly $70 million.

Florida and Georgia High School Grad Rates Worst in Nation

A study on public high school graduation rates conducted by the Manhattan Institute for Policy Research shows that at 55 percent, Florida's graduation rate is the worst in the nation. Another popular Southern state for business investment was right behind Florida. According to the study, Georgia's high school grad rate is the second-worst in the nation. Nationwide, the average is 69 percent.

Toyota Officials put off Plant Decision for Now

The Toyota site search continues and the rumors on the street keep flying. We've heard that Toyota isn't site searching for a plant location, they're site searching the American South for two plant locations. We have also heard that several sites remain in contention, including those in Mississippi, Tennessee and Alabama, sites that were reported in October to be eliminated, leaving only San Antonio and Marion, Ark. Sources we talked to who have recently visited Toyota facilities in Indiana and Kentucky, told us Toyota employees there believe that Marion, Ark., will indeed be the site for the coveted pickup truck assembly factory.

On the other hand, we talked to San Antonio representatives in October and they informed us they are at the center of the deal. In November, two Japanese media outlets reported the same. We have also heard that the second plant, if there is one, will not be an assembly plant but another engine plant. Toyota picked Huntsville, Ala., for an engine plant two years ago.

What is known is that Toyota prefers at least two rail carriers to choose from when shipping product in order to reduce costs. At this time, San Antonio is void of two rail carriers, as is the Panola County, Miss. site. Yet, in late December, Texas Gov. Rick Perry committed $15 million toward an eight-mile extension of railroad track linking the proposed Toyota site to a Burlington Northern line. Union Pacific is the only railroad that currently has access to the site. Also known is that the Japanese automaker is somewhat of a maverick when it comes to site selection. But it is not a maverick in this regard: The company plans to delay its decision until legislators in the competing states convene in January, therefore giving each state a chance to pony up on the incentive front.

Food Processor to Lease Plant in West Virginia

Luigino's has broken ground on a 250,000-square-foot facility in Parkersburg, W.V. The company is expected to hire over 600 employees at the frozen foot plant. The state of West Virginia will build and own the facility and lease is to Luigino's.

Big Deal in Northwest Alabama

U.S. Astronautics has announced it will build a solid rocket motor facility in Florence, located on the Tennessee River in northwest Alabama. The company could invest as much as $300 million and employ up to 600. Boeing currently operates a "rocket ranch" near Decatur just east of Florence.

November

QUIZ

True or False: During July-September 2002, the 17-state American South (107 million in population) experienced less mass layoffs than the state of California (33 million in population).

(Scroll down for answer)

Auto Suppliers Take Gripes to Washington

The Motor & Equipment Manufacturers Association (MEMA) went to Washington in October to explain to lawmakers problems associated with the Bush administration's steel safeguard program. The association, which is primarily made up of suppliers to the automotive industry, said that since March 2002, when Bush's steel safeguard program began, suppliers have seen price increases of steel go up as much as 50 percent. They also complained of a shortage of steel since the program went into effect. Officials with MEMA warned government leaders in Washington that suppliers are facing possible layoffs, plant closures or, worse yet, moving their operations overseas.

Hyundai Suppliers Line Up

On November 14, just days after a major Hyundai supplier picked Montgomery for a 430-employee facility, Alabama Gov. Don Siegelman said the state will land at least 13 other supplier projects to the plant, creating hundreds of jobs. Siegelman said Hyundai Mobis represented the first domino to fall as major Hyundai suppliers choose where they will set up operations in the state.

Mass Exodus of Business from D.C. Hasn't Occurred

This magazine projected in the first edition published after 9/11 that private employers and even highly sensitive government centers would pick up and move in droves out of the District of Columbia to perceived safer sites in adjoining Maryland and Virginia. It wasn't just us predicting the exodus. Real estate officials predicted it, too. But current numbers show that hasn't been the case more than a year after 9/11. Vacancy rates in the central district near the White House, Capitol and other primary government buildings have not increased. If anything, they are decreasing with one exception; Leases that have terminated in office buildings located near the Central Intelligence Agency facility have seen weak renewal rates.

Report Indicates Appalachian Universities Key to High-Tech Growth

Appalachia, a vast, mostly rural region of the South and small parts of the Midwest and Northeast, has for decades been beset by poverty. A study recently done by the University of North Carolina indicates that a shortage of professionals living in the region, namely engineers and scientists, is the primary reason why Appalachia is not growing as fast as the rest of the South in the technology sector. The study says that while states such as North Carolina, South Carolina, Virginia, Tennessee and West Virginia have implemented programs to help high-tech's introduction into Appalachia, those programs will not work until higher learning institutions in the region offer more information technology and biotechnology degrees. The study also cited fewer high-tech degrees per capita given out by Appalachian universities. The report did acknowledge that Appalachian universities are improving steadily in national rankings in advanced technology degrees and that these centers for higher learning will be the deciding factor, not state programs, on whether or not high-tech takes a foothold in Appalachia in the near future.

Duke Power Does Its Part to Jumpstart Carolinas

Vacant industrial buildings dot the landscape in the Carolinas, especially Duke Power's home state, North Carolina. A new Duke Power program that gives incentives for companies locating in any of those nearly 1,000 empty buildings is receiving great response from economic developers throughout the Carolina region. Duke is offering an incentive of 50% off power bills in the first year for companies who sign five-year leases on vacant buildings in the power company's territory. To gain the power discount, companies must move into a building that has remained vacant for at least six months and use 500 kilowatts of power for 300 hours each month. Warehouse and industrial vacancy rates have almost doubled in just one year in North Carolina.

Lowe's Could Employ 8,000 at Charlotte Area Campus

The opening of the first building at Lowe's new Iredell County, N.C. campus won't happen for more than a year, yet officials with the giant retailer have hinted that when completed, the facility could house as many as 8,000 workers. The first building, a $90 million, 400,000-square-foot office, is scheduled to open in 2004. Four other buildings will be built for a total of 1.2 million square feet. The home improvement retailer currently has its headquarters in rural Wilkesboro, N.C. Company officials maintain that the new campus located near Mooresville will not become its new headquarters and that employees from Wilkesboro will not be relocated. With $22 billion in sales last year, Lowe's is second only to Atlanta-based Home Depot ($53 billion in sales last year) in home improvement retail sales.

QUIZ ANSWER

Amazingly, it's true. California saw 1,336 mass layoffs (50 or more laid off employees) in the summer quarter according to the Bureau of Labor Statistics, while the South as a whole saw 1,050. In addition, California experienced 7,417 mass layoffs between September 2001 and September 2002. That total was a third of all mass layoffs announced in the U.S. during that time.

October

QUIZ

Since September 11, 2001, which states in the American South have seen their unemployment rates drop?

(scroll down for answer)

DaimlerChrysler Picks Georgia

The much-anticipated end of DaimlerChrysler's site search for a $750 million cargo van plant apparently has become a wonderful reality for Georgia Gov. Roy Barnes. It has been well documented in this publication that Barnes has set his sites on garnering a high-profile automotive deal since becoming governor and with DaimlerChrysler picking a site near Savannah, he now has one. The new assembly plant will be built on nearly 1,500 acres at the intersection of Interstates 95 and 16 in Pooler, Ga. Chrysler's new Sprinter cargo van will be built at the facility, which is expected to employ 3,000. Savannah outbid Jacksonville and a site near Charleston, S.C. for the prestigious project.

Finally, a Large Semiconductor Deal in the South

States in the South have courted them like no other industry. Yet, the semiconductor industry hasn't shown significantly in the South in six years now. In September, however, Samsung Austin announced it was investing $50 million to upgrade its existing Austin plant. The plant is converting to manufacture double rate DRAM chips, which are projected to be the best selling chips in 2004.

Two Finalists for Toyota Plant?

Rumor has it that Toyota Motor Corporation's site search for its latest and fifth North American assembly plant has narrowed to San Antonio and Marion, Ark., which is located just outside of Memphis. Toyota, Japan's largest automaker, wants to increase worldwide market share to 15 percent by 2010. It's been confirmed that Toyota officials have visited sites in Alabama, Mississippi and Tennessee as well as Texas and Arkansas. If Toyota does choose either Marion or San Antonio, it would create further evidence that the South's automotive corridor is continuing to jog west since BMW chose Greer, S.C. for its plant in 1992. Since that announcement, new automotive plants have been announced in Alabama and Mississippi.

QUIZ ANSWER

States that have seen their unemployment rates go down since September 11, 2001 are: Arkansas: 5.2% to 5.0%; Kentucky: 5.6% to 5.5%; Maryland: 4.2% to 4.0%; and South Carolina: 5.7% to 5.3%.

September

Louisiana Energy Chooses Hartsville, Tenn. for $1.1 Billion Plant

Louisiana Energy Services (LES) finally picked a site near Hartsville, Tenn., for its $1.1 billion uranium enrichment facility. Tennessee was in a heated competition with a site in Northeast Alabama for the large project. The site in Hartsville was owned by the Tennessee Valley Authority, but has now been transferred to a local agency. TVA also owns the Alabama site, which is near Hollywood and the Bellefonte nuclear power facility. The new facility will provide enriched uranium for U.S. nuclear facilities and is the first new uranium enrichment plant to be built in the U.S. in 50 years. LES is a partnership of Duke Energy, Entergy, Excelon, Canadian-based Cameco and Urenco, a European company.

Sour Grapes in Michigan?

In late September, the Michigan Department of Environmental Quality filed complaints with the Environmental Protection Agency challenging Hyundai's air permits for a massive plant it is building just south of Montgomery, Ala. In an unprecedented move to block Montgomery's $1 billion Hyundai plant, MDEQ submitted an eight-page objection to air permits for Hyundai. The Birmingham (Ala.) News reported that Dennis Drake, head of the air quality division of MDEQ, said he filed the comments and challenges to the Hyundai permit not out of sour grapes, but to help preserve Michigan's existing auto industry. Drake said automakers in Michigan are telling him the state is being tougher on them in regards to air quality than states in the South, where numerous new auto assembly plants have been built or announced in the last 10 years.. Drake said the technology being required for the Hyundai facility is not as stringent as what Michigan requires according to the EPA. Michigan is an EPA-delegated state, while Alabama is an EPA-authorized state. The difference is Alabama has the power to grant permits on its own with a regional EPA approval coming out of Atlanta. Michigan, on the other hand, has to approve air quality permits by EPA standards. Michigan's automotive industry, which still accounts for a third of all automobiles and trucks made in the U.S., is stagnating and Drake said it cannot afford to lose any plants to the American South. In contrast, the South's automotive industry is growing at an astounding rate.

BMW Expands Once Again in South Carolina

Following a string of expansions since announcing its assembly plant in Greer, S.C. in 1992, German automaker Bavarian Motor Works announced in late September it will spend $500 million to upgrade its facilty there. The foreign automaker builds the X5, Z3 and Z4 vehicles at the plant. The company will add an estimated 500 workers to the 4,500-employee facility. BMW has invested over $2 billion in the plant since 1992.

Lowe's Could Employ 8,000 at Charlotte Area Campus

The opening of the first building at Lowe's new Iredell County, N.C. campus won't open for more than a year, yet officials with the giant retailer have hinted that at buildout, the facility could house as many as 8,000 workers. The first building, a $90 million, 400,000-square-foot office, is scheduled to open in 2004. Four other buildings are slated to be built for a total of 1.2 million square feet. The home improvement retailer currently has its headquarters in rural Wilkesboro, N.C. Company officials maintain that the new campus located near Mooresville will not become its new headquarters and that employees from Wilkesboro will not be relocated. With $22 billion in sales last year, Lowe's is second only to Atlanta-based Home Depot ($53 billion in sales last year) in home improvement retail sales.

August

QUIZ

Where in the South is generally called the "birthplace of the modern PC?" This city and site is also where Bill Gates allegedly first sold IBM, the world's largest computer maker at the time into a licensing agreement for an operating system for personal computers. You have 8 sites in the South to choose from: (1) Dallas, Tex; (2) Boca Raton, Fla.; (3) Falls Church, Va.; (4) Research Triangle, N.C.; (5) Norcross, Ga.; (6) Cary, N.C.; (7) Fairfax County, Va.; (8) Loudoun County, Va.

(Scroll down for answer)

Baltimore/Washington/Northern Virginia Region Unseats San Diego as Biotech Hotbed

The first global report done by Ernst & Young shows that the Mid-Atlantic region of the American South has jumped to third place in race for biotech companies. Ernst & Young describes "biotech" companies as those that are involved in drug discovery. According to the report, the Baltimore/Washington/Northern Virginia region is home to 116 biotech companies, a total that unseats San Diego for third place in the U.S. The region trails only New England (Boston area) and the San Francisco Bay region in biotech development. Worldwide, the report states that 4,284 companies are engaged in drug discovery with a total employment of almost 200,000.

Johnson Controls Adds 480

Leading parts supplier Johnson Controls is spending over $25 million and adding 480 workers to its plant in Tuscaloosa, Ala. The Wisconsin-based company is adding 350,000 square feet to its facility, located near the Mercedes assembly plant in Vance. The company makes seats, door panels and head liners for M-Class units.

DaimlerChrysler Won't Announce Van Plant This Year

Giving no reason, officials with DaimlerChrysler have said they will not make a decision on a site for a 3,000-employee, $750 million cargo van plant this calendar year. The company was expected to make a decision this summer on the facility. The massive auto and truck manufacturer seemed to be leaning toward Charleston, S. C. for the plant, with Savannah and Jacksonville on the short list. Meantime, Louisiana and Arkansas officials have hinted they will bring their states into the fray for the plant. It is not known whether a new site search will begin, or the plant is simply being delayed until next year.

Phase-Two for Nissan's Mississippi Plant

On July 1, Carlos Ghosn, president of Nissan, announced that Nissan North America would invest an additional $500 million to expand its new assembly plant under construction in Canton/Madison County, Miss. The expansion will result in 1,300 additional jobs and increase capacity at the plant from 250,000 vehicle units annually to 400,000. The expansion will make room for increased production of the popular Nissan Altima in the spring of 2004. The Canton facility will also build full-size pickups, SUVs for Infiniti and Nissan and the next generation Quest minivan. Nissan's large assembly plant in Smyrna, Tenn. will continue to build the Altima and Xterra SUV, but will add the Maxima next year.

Southern Company Spending Over $3 Billion

Atlanta-based Southern Co. is stepping out of the potential restrictions of a regulated energy market that it sees itself in, by announcing it will increase its wholesale capacity for electricity by 40 percent in the next three years. The utility, which owns and oversees Alabama Power, Georgia Power and other major utilities in the Southeast, is starting up four more energy-producing units in the next year after bringing on-line eight expanded or new facilities recently. The utility will sell the additional power primarily on the unregulated wholesale market.

Shreveport Announces Location of New Automotive Supplier

Intier Automotive announced recently the decision to locate their newest facility in Shreveport. The new facility will allow Intier to provide instrument panels to the new General Motors Colorado truck that is being built at the automakers Shreveport assembly plant. The $15 million, 200,000-square-foot plant will house 200 workers at full production.

The South's Newest Interstate?

For years, getting from Memphis to Birmingham has been one of the toughest drives between two Southern major markets. Corridor X, the name of the limited access, interstate-quality highway that is complete from Memphis through Mississippi and about halfway through northwest Alabama to Birmingham might be the South's next interstate if lawmakers in Mississippi and Alabama get their way. While official interstate designation won't be possible for several years, an approval for it is possible this fall. U.S. Rep. Bob Aderholt (R-Haleyville, Ala.) and U.S. Rep. Roger Wicker (R-Tupelo, Miss.) are heading up the effort in Washington to get the interstate designation. Corridor X is a 260-mile, interstate quality highway that follows U.S. Highway 78 from Birmingham to Memphis.

Honda Expanding in Alabama

In 1999 this magazine reported that Honda officials were being cautious with initial investment and employment figures when the Japanese automaker first announced its new $400 million, 1,500-employee plant in Lincoln, Ala. in May of that year. We reported that the deal would mean more like 3,500 employees and $1 billion in investment within the first year of operation. Even one Economic Development Partnership of Alabama official chastised us for reporting that. Well we did and we were right. Honda is only in its ninth month of operation at the Lincoln facility and it has already invested nearly $600 million and over 2,300 workers are currently earning paychecks at the plant.

Honda officials announced on July 9 the first expansion of the plant that will double production and add 2,000 workers. The cost of that expansion will be another $400 million, making our $1 billion projection back in 1999 right on target. The company is essentially building another plant (an additional 1 million square-feet) for a second assembly line. Shortly before announcing its expansion in Alabama, Honda Motor President Hiroyuki Yoshino said that a new plant in the U.S. "could be" a solution to supply shortages the company is experiencing. We don't believe Honda's expansion in Alabama is what Yoshino was referring to. As for our prediction that jobs would total 3,500 in the first year of operation? We were 800 short. Honda is expanding while Mercedes is adding 2,000 workers at its Vance, Ala. plant and Hyundai is expected to hire over 4,000 for its Montgomery, Ala. facility.

Southern States Sue North Carolina Over Radioactive Waste Site

The Southeast Compact Commission for Low-Level Radioactive Waste Management and four Southern states have filed a $90 million lawsuit against the state of North Carolina in the U.S. Supreme Court. Alabama, Florida, Tennessee and Virginia filed the suit over North Carolina reneging to build a low-level radioactive waste storage dump after resident of the state opposed the deal. The suit points out that North Carolina failed to comply with its own laws and agreements made with the compact to build the radioactive waste facility.

Charlotte Planners Put Pinch on Big Boxes

City planners in Charlotte have come up with a new idea to eliminate eyesores, such as closed Wal-Marts that have moved down the road to other sites in order to become Super Wal-Marts. Officials with the city have implemented a new policy that states that any retailer who builds a large "big boxes" (windowless shell buildings) must sign an agreement with the city that lets it demolish the vacant building if a new tenant cannot be found after a reasonable period of time. The new policy also requires big retail boxes to be a part of mixed-use developments that include offices, other retailers, apartments, lodging and restaurants.

Japanese Duo to Build Big Plant in Georgia

Two major Japanese companies are teaming up to build a $100 million, 400,000-square-foot air conditioning compressor plant in Jackson County, located on the I-85 corridor northeast of Atlanta. Toyota Industries, a subsidiary of Toyota Motor Corp. and Denso Corp. announced the joint venture in July. The plant, being built on 152 acres, is expected to house 300 employees.

Texas Lost Nearly 100,000 Jobs in 12 Months

In calendar year 2001, North Carolina and Georgia saw job losses mount to major levels. Yet, from May of 2001 to May of this year, Texas is leading the South in jobs losses. The Lone Star State lost 92,000 jobs in the aforementioned period according to the Bureau of Labor Statistics. Only New York, with 124,000 job losses and Illinois, with 97,000, surpassed Texas' total during the period.

Hagerstown Plant Retooled for Volvo/Mack Truck Engines

On May 28, AB Volvo, parent company for Mack Trucks, announced it would retool its facility in Hagerstown, Md. to build the next generation Mack and Volvo heavy diesel truck engines. The company currently employs 1,200 at the site. The decision marks a major retention deal for Maryland, which is in jeopardy of losing GM's van assembly plant in Baltimore.

Retention Incentives Show for the First Time in South

There are plenty of things the Northeast, Midwest and West have learned from economic development practices in the South over the last three or four decades. Back in the 1960s and 1970s, many states in those regions didn't even practice economic development, or industrial development as it was called then. Because of that, the South, where economic development as it is known today was invented in the 1940s, lured thousands of companies to its turf from the Midwest and Northeast.

Today, however, it may be the South that can learn a thing or two from economic development practitioners in the Midwest and Northeast. Retention incentives, used for about 20 years in those two regions to keep existing industry from relocating or expanding to other regions, are now cropping up slowly in parts of the South for the first time ever. Oklahoma recently passed legislation designed to keep tire makers, specifically Goodyear and Michelin, making tires in the Sooner State. In May, Oklahoma Legislators passed a bill that would give Goodyear as much as $36 million to remain and expand in Lawton. At the same time, Michelin will receive approximately $5 million to expand its plant in Ardmore. It's the first time Oklahoma officials have used retention incentives. In Maryland, retention incentives were used recently to keep Giant Food's distribution center expansion in Howard County. The company threatened to locate its new 368,000-square-foot distribution in Virginia. Look for more retention efforts throughout the South in coming years.

Minute Maid Building Large Juice Plant

Atlanta-based Coca-Cola subsidiary Minute Maid, announced in late June it is building a $130 million, 620,000-square-foot juice plant in Auburndale, Fla. The company expects to hire 300 workers at the plant, which will come online in the spring of next year.

Target Lands in Topeka

Minnesota-based retailer Target Corp. has chosen Topeka, Kan. for its latest regional distribution center. The company is building a 1.3 million-square-foot box that will eventually employ around 1,000. Three other sites in Kansas were considered for the facility.

Bus Company Staying Put, Expands in High Point

Thomas Built Buses, which already operates out of 850,000 square feet in High Point, N.C. is planning a $40 million, 250,000-square-foot expansion of its manufacturing facilities there. The expansion is expected to create as many as 200 jobs. The company, which currently employs 1,600 in High Point, considered closing the plant in favor of a move to Gaffney, S.C. The company has operated in High Point since 1910.

Noble Foundation Announces $85 Million Expansion in Ardmore

The Noble Foundation announced an $85 million expansion to their laboratory and research facilities in Ardmore. The expansion will give scientists greater resources in developing cool season perennial forage grass, crops that are more disease resistant and the exploration of plants at their genetic origins. The Noble Foundation is housed in an 848 acre campus comprising 11 buildings and housing 260 employees.

Auto Supplier Joint Venture Lands in Aiken

Three Japanese companies have grouped to establish a joint venture deal in Aiken, S.C. Shinsho American, Nakagawa Specialty Steel and Osaka Seiko have formed Aiken Precision Technologies, a new company that will supply cold forged steel components for Japanese auto assembly plants in the South. The company is investing $10 million in the deal.

QUIZ ANSWER

The city and site of the birthplace of the modern PC and where Bill Gates turned his first and most important deal ever is at the intersection of Congress Road and Yamato Road in Boca Raton, Fla. In 1970, IBM built a huge, 2-million-square-foot campus where 12,000 IBM employees were busy developing the personal computer as it exists today. It is also the location where Microsoft founder Bill Gates convinced IBM execs to buy into his unnamed at the time, Windows operating system. Today, the former IBM campus is called T-Rex Corporate Center, where numerous tenants employ up to 20,000 workers. Most of them, however, are low-paid data and clerical workers.

July

North Carolina Considers Greater Incentives

In 1993, officials for the state of North Carolina publicly derided Alabama officials for "giving away the store" in the landing of Mercedes Benz. In fact, in the Winter 1994 edition of this magazine, then North Carolina Department of Commerce Assistant Director David Sheehan was quoted as saying, "We prefer to market North Carolina's inherent advantages. We are committed to being competitive, but we won't give away the store. In a time of limited resources, it doesn't make sense to spend as much as Alabama has to attract an industrial recruit. They're counting way too much on the multiplier effect. They're never going to get the kind of payback they're projecting," Sheehan was quoted as saying in a SB&D cover story titled, "Where Do You Draw the Line on Incentives."

In hindsight, Sheehan was wrong. Not only has Mercedes expanded its Vance, Ala., facility to roughly double its original size, the plant paved the way for Toyota, Honda and Hyundai's mega-projects in the state. Payback? Payback is hell, especially if you're North Carolina, which saw over 60,000 manufacturing jobs leave the state in 2001.

On top of all that, in May officials for Eli Lilly chose Northern Virginia over Durham, N.C. for a $425 million pharmaceutical facility. Site consultants throughout the region pointed to North Carolina's meager incentives as the primary reason Lilly chose Virginia. Many are calling the Eli Lilly project one of the most prestigious deals in all the South over the last 10 years.

Ten years after Alabama gave Mercedes over $250 million in incentives to locate in the state and two months after Eli Lilly shunned the Tar Heel State, some North Carolina officials and media outlets are now admitting that the state's ability to compete with its neighbors in the South for major projects is hampered by strict limits on incentives under the William S. Lee Act. With so many lost manufacturing jobs, officials in North Carolina point out that replacing those jobs through the recruitment of new industry is paramount. Currently, the North Carolina General Assembly and Gov. Mike Easley are considering over a dozen recommendations on how to improve the state's incentive programs. Some of those recommendations include new incentives for nonmanufacturing industries and headquarters, front-end incentives for high-tech and biotech firms, expanded tax credits based on jobs created and the continuance of tax breaks for venture capital investment in startup operations.

Missouri Closes Seven Development Offices

Shrinking state budgets have forced officials in Missouri to close all seven of its regional economic development offices. The state field offices were set up in order for the Missouri Department of Economic Development to have local representation throughout the state. Department officials maintain they will reorganize development efforts to make up for the loss of the field offices.

Alltel Not Justifying Tax Breaks in Georgia

In 1998, Little Rock-based Alltel signed a five-year agreement promising the creation of 785 jobs in the Atlanta area in order to receive state tax breaks of around $14 million. To date, the company admits it has only filled 134 positions at its Alpharetta campus. The agreement stated that the company must hire at least 150 workers each year over the course of five years. In response, state officials are in the process of acting on clawbacks in the contract to retrieve millions in state taxes it says Alltel now owes because it has not lived up to the agreement.

Audit Blasts Tax Breaks in Louisiana

The Louisiana Legislative Auditor's Office has uncovered some sloppy work performed by the Louisiana Department of Economic Development (LDED). The audit found, among other things, that there has been very little accountability by the department to ensure that companies are investing and hiring at the rate agreed upon under the incentive agreement. In addition, the audit found that the LDED could not give an accurate total of tax breaks given out to industry between 1997 and 2001. The auditors made recommendations to reform the incentive programs. LDED agreed to the recommendations.

June

Battling Neighbors in the Metroplex

City officials in Addison, Plano and Richardson, Tex. are banding together to call for new legislation that would limit the way cities can spend tax dollars in the recruitment of industry. The cities are responding to another Dallas/Fort Worth Metroplex neighbor that has pulled out all the stops in luring existing industry in the region to within its city limits. The city of Frisco, which is located north of the aforementioned cities, has implemented an aggressive cash incentive program aimed primarily at existing industry in the Dallas/Fort Worth Metroplex.

Florida to Build Tech Centers

Legislation that will pave the way for the construction of high-tech centers at Florida's universities and colleges was signed by Gov. Jeb Bush in May. The Florida High Technology Development Initiative creates Centers of Excellence to be built on university and college sites throughout the state. The centers will help foster innovative technology research, develop applications for that research and aid in the recruitment of high-tech industries and workers to the state.

Georgia City Considers Additional Taxes to Help Recruit Industry

Officials in Columbus, Ga., are considering a property tax increase to help fund a better industrial recruitment program there. The property tax hike would increase the taxes paid on a $100,000 home by no more than $6.62 per year. Columbus Chamber of Commerce President Mike Gaymon says that the additional funding is critical if the east Georgia market is to compete for high-tech industry. Advanced Micro Devices, the Texas-based computer chip maker, considered Columbus during its search for a site for a new semiconductor facility. That facility eventually landed in Singapore.

Costco Building Distribution Center in Dallas

Costco Wholesale Corporation is building a $20 million, 400,000-square-foot distribution center at the Mountain Creek Business Park in South Dallas. A 90 percent ad valorem tax abatement was used to lure the big box user as well as Triple Freeport, Enterprise Zone incentives. The facility is expected to house up to 400 workers at buildout.

Ten Tier One Suppliers Have Announced in Mississippi

As of July 1, 10 Tier 1 suppliers have announced they are locating in Mississippi to supply the Nissan assembly plant in Canton. Some of the suppliers include Calsonic Kansei, Mi-Tech Steel, Lextron/Visteon Automotive, Johnson Controls and Yorozu Automotive.

CP&L Goes Green

CP&L (Carolina Power & Light), a subsidiary of Raleigh, N.C.-based Progress Energy, is giving its 1 million customers in North Carolina a "green" option. The utility is allowing its customers to purchase electricity from renewable energy sources such as wind farms and solar collectors. The program is the first statewide program of its kind in the U.S. By taking the green option, a customer can expect to pay an additional $4 a month for 100 kWh of electricity.

Texas Creates New Rural Agency

A new state rural agency, the Office of Rural Community Affairs, or ORCA, was created by Texas legislators during the last session. The agency merges several rural services including rural community development, outreach and training and health care. ORCA will use funds from the U.S. Department of Housing and Urban Development for economic development, housing projects and sanitation infrastructure in over 1,000 rural Texas communities.

Three Southern States Make "Most Polluting" List

The Environmental Protection Agency's annual Toxics Release Inventory showed that three Southern states -- Texas, Tennessee and North Carolina -- are among the 10 most polluting states in the U.S. Nevada ranked as the nation's most polluting state, with 1 billion pounds of toxic chemicals released last year. Following Nevada were Utah, Arizona and Alaska. Texas came in as the fifth most polluting state followed by Ohio, Pennsylvania, Indiana, Tennessee and North Carolina.

May

QUIZ

Here's an easy one for you. Ten large automotive, SUV, van or light truck plants are now located or are being built in six "Deep South" states. Name the six states in the South where those plants are located.
(scroll down for answer)

Reports Indicate Three Markets Make Short List for DaimlerChrysler Plant

DaimlerChrysler is site searching the south central East Coast for a large plant that would manufacture cargo vans, according to various reports. The site search, named Project Blue Bell, has apparently centered on sites in Jacksonville, Savannah and Charleston, S.C. If built, as many as 3,000 jobs could be generated initially at the new facility. All of the aforementioned markets have large ports. The port at Jacksonville is allied with Cecil Field, a 27-square-mile former Navy base that has its own general aviation airport and plenty of available land. Savannah's port activity is growing and is the headquarters for Georgia's port authority. Georgia features another port near Savannah at Brunswick, Ga. That port recently picked up Volvo shipments that Jacksonville used to handle. Charleston, the third prospective site, is home to the nation's fourth-largest port, but is struggling right now with its own expansion. DaimlerChrysler is expected to invest $750 million in the facility, which reports say will total 2 million square feet.

New Incentive Package for South Carolina

Legislators in South Carolina are have passed a new incentive package that would be used for companies investment $400 million or more and creating at least 400 new jobs. The legislation paves the way for another large expansion of BMW's plant in Greer, S.C. The new incentives would also help the state pursue major industrial projects such as the DaimlerChrysler truck plant that is setting its sights on sites in Savannah, Jacksonville or Charleston. The bill would increase the state's debt limit and sell tax-exempt bonds worth as much as $500 million to pay for infrastructure needed to recruit large projects.

Tough Times for Port of Charleston

Business is down at the Port of Charleston, one of South Carolina's most dominating forces behind economic development in the state and one of the nation's largest container ports, while business is up at neighboring ports in Brunswick (GA) and Savannah. In the last couple of years, a battle has emerged among homeowners, environmentalists and port officials over the expansion of the Charleston port at Daniel Island. That battle recently ended when the South Carolina Legislature decided in late April to abandon the Daniel Island expansion and look to the closed Navy base located up the Cooper River in North Charleston. South Carolina Port Authority officials have maintained that an expansion at the old Navy base would cost much more than expanding existing facilities on Daniel Island. But the prospects of a large user, in this case DaimlerChrysler, makes the timing of the legislative decision interesting. Could it be that DaimlerChrysler prefers the old Navy base as a site for its proposed plant? Let's not forget that Mercedes officials toured the old Navy base when they were searching for a site in the early 1990s. If that's the case, South Carolina officials are gambling on DaimlerChrysler, another auto/truckmaker to place on the mantle next to BMW, while potentially damaging the future of the port.

Georgia Bows Up for Daimler Chrysler Project

More than one person has reported to SB&D that Georgia Gov. Roy Barnes was on a plane when he heard that Nissan chose Mississippi for its huge assembly plant in Canton. We heard Barnes was not pleased with Nissan's decision. Apparently, Barnes is dead-set on winning the DaimlerChrysler deal that seems to be centered on port facilities located in the Atlantic Deep South. The governor has pointed out that Savannah's port is the fastest growing in the nation and that Brunswick's port is one of the fastest growing automotive import/export ports. The advantages Georgia has for the project center on Savannah having plenty of available sites that are not affected by historic sites, therefore environmentally friendly. We also understand that Barnes' checkbook is open for Blue Bell.

Florida Moves Quickly to Pass "DaimlerChrysler Bill"

The Florida Senate passed a bill that will give DaimlerChrysler $65 million in incentives if it locates in the state. The incentives include the building of a worker training facility and seven years of operating it. The city of Jacksonville is also willing to open its checkbook for the massive automaker. Up to $40 million in infrastructure improvements at Cecil Field will be completed if DaimlerChrysler locates there. Much of the improvements will be completed even if the company locates elsewhere. The Florida Senate also approved a $250 million corporate income tax cut in hopes of landing the cargo truck facility. Expect neighboring counties to pony up as well if DaimlerChrysler chooses Jacksonville.

Georgia Officials Visit Korea/Hyundai

With the Hyundai site search now officially over, Southern states are positioning themselves now for the suppliers. In May, Georgia officials took a four-day trade mission to Korea to meet with automakers' Hyundai, Kia and Daewoo. They especially want to discuss with Hyundai officials the possibility of landing several large suppliers to the automaker's yet-to-be-built plant in Montgomery, Ala. Georgia took a similar approach when Honda announced it would build in Lincoln, Ala. and it worked. Several suppliers to the Alabama-based Honda plant located across the line in Georgia. In fact, other than Alabama, more Honda suppliers to the Lincoln plant have landed in Georgia than any other Southern state.

Group Says Louisiana's Tax Structure a Damper on Economic Development

Louisiana's corporate tax burdens on manufacturing firms remain relatively high among Southern states, the Public Affairs Research Council of Louisiana (PAR) reported in April. Jim Brandt, president of PAR, said the report "underscores the need for serious tax reform in Louisiana." The report demonstrates that Louisiana's current arsenal of tax incentives can be quite competitive with other Southern states, but once a manufacturer has used up its temporary incentives, its tax burden is higher than neighboring states. Louisiana has been ranked among the five to 10 lowest states in total taxes per capita for many years, due primarily to low collections from individuals. At the same time, the report notes, the state has ranked among the top 10 in the U.S. in the share of taxes borne by business. Louisiana's high sales taxes on manufacturing machinery and equipment (MM&E) are primarily responsible for the state's high, overall tax burdens on manufacturers. Louisiana is one of only two Southern states that do not exempt or greatly reduce replacement purchases of MM&E. As a result, according to the report, manufacturers' sales taxes run three times higher than the Southern average and Louisiana's tax burden on the "average" manufacturer ranks second highest in the South behind Texas. What's interesting about the report is that few states in the South each year report larger manufacturing investments than Louisiana and Texas. Because of the states' large concentration of oil, gas and chemicals industries, many of the largest investment announcements occur in Louisiana and Texas each and every year in the South.

Quality Jobs Bill Passes in Louisiana

If you've got your hand out for tax rebates to go along with that expansion or new location in Louisiana, be prepared to pay a minimum of $9 an hour to employees and at least 85 percent of their health insurance premiums. Gov. Mike Foster's new economic development program included a quality jobs bill that was passed by the legislature. The state will rebate taxes up to five percent of payroll if companies pay the minimums outlined in the program and six percent for companies paying $11.50 an hour.

Goodrich Changes Mind in Arkansas

Officials in Arkansas reported in April that Goodrich Aerostructures and Aviation Services will not only keep its facility near Arkadelphia open, but it will also expand that plant. Goodrich officials announced in December they would close the facility, costing the area almost 175 jobs. After the plant closure announcement, Gov. Mike Huckabee, representatives from the Arkansas Department of Economic Development and community leaders in Clark County began working with the company in an attempt to save the jobs and the plant. Their efforts prevailed because not only is the plant remaining open, Goodrich plans to employ 75 more workers.

Hapeville, Ga. Ford Plant Hanging On

It was widely rumored last year that the Atlanta area Ford plant, which produces the Ford Taurus and Mercury Sable, was headed for closure. In March, Ford officials announced they are debuting a new sedan called the Ford 500, which further clouded the future of the Hapeville Taurus plant. Could the new sedan be the final straw for the Hapeville plant? It doesn't look like it. Ford is expected to keep producing the Taurus in Georgia. Apparently company officials believe there's a strong market for the Taurus in the rental and fleet industry. So, for now, the Hapeville plant's doors remain open.

Missouri Governor Plans to Save Explorer Plant

Missouri Gov. Bob Holden has created a 22-member task force to find ways to keep Ford's assembly plant in Hazelwood, Mo. from closing. Officials with Ford announced in December the plant, located near St. Louis, would close. The task force will attempt to convince Ford officials not to close the plant. However, if the plant is closed, the task force will change its mission and find a new user for the facility. The Ford plant is one of two that manufactures Ford Explorers. The other is located in Louisville. Over 2,500 are employed at the plant and over $150 million in annual salaries are paid by the Michigan-based automaker.

QUIZ ANSWER

This quiz is somewhat of a trick question. The key to the quiz is the phrase "Deep South." There are 10 large automotive plants in six "Deep South" states. Those states where the plants are located are Alabama (Mercedes, Honda and Hyundai); Georgia (Ford and GM); Louisiana (GM); Mississippi (Nissan); South Carolina (BMW); and Tennessee (Nissan and Saturn). Other automotive plants in the American South are located in Texas, Oklahoma, Missouri, Kentucky, Kansas and Maryland, or locations that are not considered "Deep South."

April

QUIZ

True of False? In 2001, more net new jobs were created in the South than in the Midwest, Northeast and West combined. (scroll down for answer)

Confidentiality of Incentives in Kentucky Ends

In April, the Kentucky Supreme Court ruled that the Kentucky Cabinet for Economic Development must make public incentive deals, not only from here on out, but from 1992 as well. Officials with Kentucky's state economic development group maintain that its credit and incentive files hold confidential information about companies that must not be made public. Regardless, a unanimous Supreme Court ruled the attorney general is entitled to view the records in order to protect state funds and taxpayer dollars. However, the Court ruled that information the Cabinet promised to keep private, would remain private and should not be disclosed to the public.

Two Steel Companies Seek Kentucky Tax Credits

Dearborn, Mich.-based Kasle Blanking and Pittsburgh-based LEO have filed with the Kentucky Finance Authority for tax credits for the building of two steel production facilities in the state. LEO has received approval for $17 million in tax credits over the course of 10 years and Blanking has received approval for $1 million over 10 years. Kasle Blanking is expected to build a $20 million steel processing facility that would employ 78. LEO is expected to build a $176 million plant at the Jefferson Riverport.

Trust Fund Falls Below $800 Million

North Carolina's Unemployment Insurance Trust Fund has fallen below the $800 million needed to avoid an unemployment insurance rate hike. The state's unemployment insurance trust fund currently stands at $609 million, thanks in part to a $237 million boost by the federal government in April. While a rate increase is not expected this year, North Carolina law states that if the fund falls below $800 million, unemployment insurance taxes must double. Unless there's a strong rebound in the Tar Heel State's economy this year, expect unemployment insurance rates in that state to double in 2003.

Editorial

Hyundai and Alabama: The South's Worst Kept Site Search Secret

By Mike Randle

As far back as late 2000 the word on the street was that Hyundai, not Toyota or Volvo, was on the hunt for a large U.S. manufacturing facility. Then late last summer that rumor was confirmed by the company itself. As the fall of 2001 wore on, a short list of sites emerged. Georgia and Tennessee were in the running initially but were left behind early. That left Ohio, Mississippi, Alabama and Kentucky as potential states targeted by Hyundai officials, reports indicated.

Of the four states left on that small list for the once prospective massive project, Alabama stood out. In fact we reported a good five months before Hyundai made its announcement on April 1 that Montgomery, Ala. would indeed be the site for the plant. On April 1, 2002, Hyundai made our projection look pretty good.

Why were we so sure Montgomery, Ala. would be the site for Hyundai's new $1 billion, 2000-employee plant? Of the four states left on the list, three had sure-fire problems that would inhibit the automaker in one way or another. In Mississippi's case, Nissan was the problem. Nissan's $1 billion facility, located just north of Jackson, isn't completed as of yet. So, the Japanese automaker hasn't yet secured its pick-of-the-litter labor in the Magnolia State. Nissan officials stated publicly that another large automotive facility landing in Mississippi prior to its startup would threaten the expansion of its factory. Ohio's problems facing Hyundai can be summed up in two words: strong unions. And Kentucky? Its problem with landing Hyundai was the site it presented to the company. Unfortunately for Kentucky, it never secured the site. It was being held for ransom by the family who owned part of the land making up the site. Also, there was no way Kentucky could match Alabama's incentives. It has been reported that Kentucky offered Hyundai $123 million in incentives to choose a site that wasn't available in the first place.

That left one state in the running in our opinion.: Alabama. And that was clear to us in November of 2001. Hyundai officials maintained Alabama was chosen because of a high-quality work force, its location near U.S. population centers, a superb parts supply chain and the commitment of leaders in the state. All of that is true, but it's also true in Mississippi and Kentucky. We say Hyundai ran out of options in Kentucky and Mississippi.

Alabama has gained tremendous experience over the last 10 years at turning large automotive projects. It also offered a $252 million incentives package to Hyundai, which included costs for training 2,000 workers and for getting the 1,600-acre site, located just south of Montgomery, ready. The Hyundai announcement may have been the worst kept secret of any large project in the history of economic development in the South.

Some Want to Change Alabama's Incentives

The incentive package that has helped lure Hyundai, Mercedes and Honda to Alabama needs an overhaul says officials in Birmingham. Leaders in Birmingham maintain the state's incentive package favors manufacturers exclusively and does little to attract high technology, biotechnology, electronics and service sector industries. "Alabama's current tax system does not provide adequate tax incentives to support technology businesses currently located in the state or attract technology business to the state," said Jim Rotch, chairman of the Birmingham Area Technology Task Force. "Most of the tax incentives available in Alabama today are geared toward manufacturing and are generally not helpful to technology companies," he said. Rotch's group is pushing the passage of very specific incentives that the state can offer high tech industries, including a transferable research and development tax credit.

Kentucky Governor Sponsors New Legislation

Kentucky Gov. Paul Patton's New Economy Legislative Package was unveiled last quarter. The package is designed to modernize Kentucky's current economic development packages and on providing access to capital and tax credits for research and development for startup and growing tech companies. The governor's proposal includes making changes to the Kentucky Investment Fund Act (KIFA), which provides tax credits to companies and individuals who invest in state-approved venture capital funds. Some of the changes include:

• Permit KIFA investors and fund managers to participate in the management of a portfolio comany
• Change the definition of a "small business" as it applies to knowledge-intensive firms from a value of less than $3 million to a company with a value of less than $10 million
• Permit the transfer of tax credits granted under KIFA to tax-exempt entities
• Permit banks and insurance companies to participate in KIFA and permit the tax credit to be applied against the insurance premiums tax and the financial institutions deposits tax and bank franchise tax
• Modify KIFA to permit fund investments outside of Kentucky

Governors Look for Textile Industry Answers

Three Southern state governors got together for a meeting in Gastonia, N.C. to discuss solutions for the textile industry job meltdown. N.C. Gov. Mike Easley, Ga. Gov. Roy Barnes and S.C. Gov. Jim Hodges met in an effort to slow textile industry closures and layoffs that have resulted in the loss of more than 70,000 jobs in their states over the last three years. The meeting dealt with problems facing the industry in the U.S., such as relaxed import quotas and the dumping of cheap foreign cloth and apparel and price fixing by Asian producers. Asian devaluations during the past few years have led to a flooding of U.S. textile markets by Asian-made apparel. The three governors want the U.S. to enforce import quotas and put pressure on countries that refuse to honor agreements to open their markets to American-made products.

Corning Gets Tax Break in Oklahoma. But is it Enough to Build?

They began grading the land in 2001 at the site for Corning's new fiber optics plant in Oklahoma City. Regardless, the site remained void of any facilities. Corning put off plans to build the plant in OKC. The proposed $400 million plant, though, just received a startup incentive. The Oklahoma City Council approved a $22 million economic incentives package in March. As of this writing, it's unknown whether Corning will accept the incentives plan.

QUIZ ANSWER

False. In 2001, net new jobs created in the Midwest, Northeast and West totaled 1,393,000. The South created 1,045,000 net new jobs. Source: Bureau of Labor Statistics

March

The South's 10 Richest and Poorest Counties

Poorest Counties

1. Zavala County TX - $16,363
2. Starr County TX - $16,363
3. East Carroll Parish LA - $16,464
4. Owsley County KY - $17,015
5. Holmes County MS - $17,031
6. Sharkey County MS - $17,380
7. Wolfe County KY - $17,647
8. Jefferson County MS - $17,786
9. Maverick County TX - $17,857
10. Dimmit County TX - $18,213

Richest Counties

1. Loudoun County VA - $75,886
2. Fairfax County VA - $73,337
3. Howard County MD - $72,187
4. Collin County TX - $71,423
5. Fayette County GA - $70,352
6. Forsyth County GA - $67,385
7. Williamson County TN - $66,335
8. Montgomery County MD - $65,691
9. Stafford County VA - $62,837
10. Johnson County KS - $62,821

Source: Bureau of the Census, Median Household Income, 1998

Magellan Health Services to Expand in St. Louis County

Magellan Health Services will expand and consolidate its national service center in the St. Louis area. The project will represent a $47 million investment in the community. The company will relocate its operations to three buildings in the TRiSTAR Business Communities' Riverport Commons development in Maryland Heights. The expansion will result in the creation of 500 new jobs.

Harley-Davidson Expands at Northland Plant

Harley-Davidson recently announced that two motorcycle model lines will move to Kansas City's plant north of downtown in Platte County, resulting in a $15 million investment and the creation of 300 new jobs. The first production line involves the company's brand new motorcycle, the V-Rod, and the second model is the Dyna Glide whose assembly operations will move to Kansas City from its York, Pa. plant. The V-Rod and Dyna models will be built alongside the Sportster at Harley's Kansas City plant, which opened in 1998 and currently employs 550 people.

Universal Leaf North America to Invest $100 Million, Create 1,000 Jobs in Nash County

A division of Universal Leaf Tobacco Company, Universal Leaf North America, has chosen a site in Nash County for the construction of a new leaf tobacco-processing factory. The 1,200,000 square foot building will be the premiere facility in tobacco processing. The selected site has 990+ acres, and is located four miles north of Nashville Township on State Road 58. Universal Leaf will hire 1,000 people to work at the factory, which will be fully operational by July 2003.

BAE Systems to Open Facility, Create 1,000 Jobs in Reston

BAE Systems North America, the British defense and aerospace contractor, will open a new systems-integration unit in Reston in fall 2002 and add 1,000 new jobs at the facility over three years. The Reston operation, a new business division for the Farnborough, England-based company, will be located in a 135,000 square foot office currently under construction.

West Adds 750 Jobs in Hampton

West Corporation announced in December it will create 750 new jobs at their Hampton, Va., location. New teleservices reps will staff West's inbound call center. The customer services center processes incoming telephone orders from people wanting to purchase products or services they have seen advertised on TV, direct mail or other media.

February

A Coincidence or Not?

Florida added 172,000 net new jobs to its economy in 2001. Texas added 115,000 net new jobs in 2001. The two states led all other Southern states in net new jobs last year. In fact, Texas and Florida were two of only eight Southern states (out of 17) that showed a net gain in jobs created in 2001. However, the next highest Southern state adding jobs was Virginia with 20,000, certainy nothing close to the totals seen in Florida and Texas. All other Southern states lost jobs, led by Georgia with a net loss of over 80,000 jobs. Obviously, the two states in the South that have direct relationships with George W. Bush are ... you guessed it, Florida and Texas. We all know that services are back filling many of the lost manufacturing jobs in the South. In 2001, Florida created 116,000 new jobs and Texas created 51,000 new jobs in the services sector. But which sector was second for the most jobs created in Florida and Texas? Interestingly enough, it was the government sector, where 23,000 net new jobs were created in Florida and 29,000 net new jobs in Texas. A coincidence? Maybe.

Incentives Being Reviewed in Louisiana

The Louisiana Department of Economic Development will recommend changes to its incentive packages to prospective industry when lawmakers return to Baton Rouge for the spring legislative session. The changes are being sought so that Louisiana can compete more favorably with other Southern states. In addition, other economic development issues such as work force training, tax cuts for business, and infrastructure improvements, are expected to be delivered to the legislative table by LDED. Economic development officials in Louisiana are retooling their state department altogether. In the summer of 2001, the idea of "business cluster" arrangements within LDED took shape. These clusters, numbering more than a dozen and including biotech, oil and gas, high-tech, plastics, etc., each have a primary contact at LDED. The reworking of Louisiana's economic development efforts have come after Mike Foster's Louisiana Inc. program was voted down by state voters. The cluster initiative may indeed be the most unique and controversial state economic development program launched since officials in North Carolina implemented official regional economic development departments in the mid 1990s.

Editorial

Like the Flu, it Passes from State to State

by Mike Randle

It bred and festered many years ago, yet the deadly-to-new-deals strain came back to life in Georgia in the fall of 2000, when lawmakers and of course the media, questioned why the total value of certain state incentives to locating companies weren't public knowledge (media outlets have been known to file lawsuits to expose the value of incentives given to industry, especially to companies making large job and investment announcements). Furthermore, Georgia Senate Minority Leader Eric Johnson asked state officials in December to not only disclose the incentive values, but also the names of the companies receiving the benefits. Now the disclosure malady has moved from Georgia to Kentucky and on to South Carolina.

In Kentucky, keeping tax incentives a secret has been condemned by Attorney General Ben Chandler. Kentucky officials have given out over $3 billion in tax breaks to locating industry since 1992. Chandler wants the incentive values open to the public as does Jim Wayne, a Democrat from Louisville. So far, Kentucky's Cabinet for Economic Development has successfully defended its right to protect job and investment making companies from the incentive "media guantlet." In fact, the Cabinet has spent tens of thousands of dollars defending that right in a lawsuit against Chandler, who wants the right to read all incentive files.

As of this writing, no such lawsuit has festered in South Carolina. However, newly appointed Department of Commerce head buffalo hunter Jim Morris, has been proactive enough to realize this particular strain could be a serious one for dealmaking in his state. One of the first items on his agenda was to give his opinion on the matter. Morris maintains that his department's finances should be made public (this, after the Department under Wayne Sterling's direction was scrutinized to the last penny), however incentive secrecy must remain, both during and after a company has located in the Palmetto State.

Only two states, Minnesota and Maine, make all incentives to locating companies public. Last time I checked my deal radar -- the most powerful and accurate radar of its kind on Earth -- Minnesota and Maine were the only two states that didn't register a blip. Here's my take: It's time to finally cure this malady, primarily brought about by those who feel a need for this information to gain readers, therefore advertisers and those who have no clue about economic development and corporate security.

Since these folks have no clue, I'd like to clue them in. No large investments, many of which exceed a billion dollars -- meaning millions to a state in tax revenue for decades -- will be made if there is even a hint that the state's media can have total access to what was agreed upon during the making of the deal. If that was the case, the media could easily take their own spin, therefore potentially carving up the deal and the company making it. Officials of large corporate concerns are not stupid. Stupid people don't build and run the largest corporations in the world (sans Enron). These people believe very strongly that the media does not understand the value of their multi-million dollar investments in the short term nor in the long term (is there a single business writer, editor or publisher who holds a Certified Economic Degree in this country?). And from my experience of being interviewed by hundreds of local business writers over the last 10 years, they're right!

Sure, fiscal accountability must be in place. All of these incentive decisions are being made with the approval of Governors, Lieutenant Governors and other highly ranked elected officials. A small group, yet the highest ranking group a state has to offer nonetheless. Isn't that why you elected them: That they can be trusted; they are rational men and women; they know what's best and what's not for their state.

There is an alternative and we've discussed this over the years about incentives in general. Go ahead and open all negotiations to the public and to the media. Go ahead and make incentives to large companies -- that's all incentives -- completely public, so that the media has full access to them. Do all of that and watch your large corporate job and investment deals, the type of deals that can put a state on the international economic map for decades, disappear altogether. It's that plain. It's that simple.

You can e-mail Mike concerning this editorial at mike@sb-d.com

OneGeorgia to Get Tobacco Money

Up to $1.6 billion of Georgia's $4.8 billion tobacco settlement can be used by Georgia's rural economic development initiative called OneGeorgia. The first part of the money earmarked for the Peach State's rural regions has been given out in the form of $8 million in grants. The grants will be used by 20 designated rural communities to improve and complete interstate accesses and other road projects. The OneGeorgia Authority, based in Dublin, is designed to encourage regionalism among rural counties in the Peach State.

Controversial Miami-Dade Development Gets Approval

It's getting to be more and more familiar in the South: balancing the environment and real estate development. In environmentally sensitive Miami-Dade, county commissioners approved in December the building of Codina Group's 436-acre Beacon Lakes business park. The park is sited about four miles from the Everglades on what are now wetlands. The county's approval to build the park essentially repealed a long-standing policy prohibiting industrial uses in the environmentally sensitive Northwest Well field protection area, home to 15 water wells. Codina's attorney, Joseph Goldstein claimed that if approval to build the park was not granted, Fortune 500 companies would flee Miami-Dade for Orlando, Tampa Bay and Atlanta. Those against the development, including Sierra Club lawyer Richard Grosso of Davie, Fla., told county commissioners that Beacon Lakes endangers the future water supply for the county and jeopardizes wetlands that are vital to the Everglades restoration. Dade County Commissioner Katy Sorenson echoed Grosso's point, by saying "water supply is a big issue for the county and I'm concerned of possible interference with the Comprehensive Everglades Restoration Program." You can read more about the South's growth management and environmental issues in that section located in this edition.

Halliburton Puts New Houston Campus on Hold

In August, officials with Halliburton announced it would centralize its energy services, engineering and construction groups by building a new 67-acre campus in Houston's Oak Park at Westchase. The plans included the construction of three new high-rise office buildings totaling 2 million square feet. In December, the massive Dallas-based energy services company put the campus on the back burner. Company officials maintain the proposed campus would continue to be a priority, however, due to the downturn in Houston's real estate market, moving into existing space might prove more economical.

January

Maryland Becomes First State to Lose Power to Enforce Clean Air Laws

The U.S. Environmental Protection Agency has taken over the state of Maryland's power to enforce federal clean air laws. According to the EPA, Maryland failed to comply with an order to allow greater public participation in industrial permitting processes. Maryland did not meet a December 1, 2001, deadline for not advancing environmental policies aimed at reducing air and water pollution. The state could lose up to $7 million in federal funds it recieves to direct the program. In addition, the EPA's office in Philadelphia will now handle industry requests for new industrial permits.

Nissan Official Warns Mississippi About Another Auto Plant

On December 13, 2001, Jim Morton, Nissan North America's senior vice president for finance and administration, sent a letter to Mississippi Gov. Ronnie Musgrove expressing "great concern" if another auto manufacturer located in the central Mississippi area. In the letter, Morton wrote that another automotive plant locating within 80 miles of Nissan's plant, which is under construction in Canton, Miss., could endanger any future expansions of the yet-to-be-completed facility. Morton did not mention a competing automaker, but the letter was received by Musgrove's office mere days before he left on a recruiting mission to South Korea to speak to officials with Hyundai. Hyundai, it has been widely reported, is expected to choose from among a handful of Southern states for a $1 billion plant that would employ 2,000 workers. Musgrove has said publicly that he would not limit sites in any part of the state to any company looking to land in Mississippi.

Canton Gains More Suppliers for Nissan

Additional production suppliers for Nissan North America will bring more than $110 million in investment to Canton, Miss. and create about 1,000 new jobs. These suppliers include four new production plants, a supplier logistics center and a transportation center. M-TEK Inc. will build a new plant in the Central Mississippi Industrial Center to supply Nissan with interior trim components. The 219,000 square foot plant in Madison County will be known as M-Tek Mississippi, Inc. TKA Fabco has been awarded a significant amount of body stampings and assemblies to supply the Nissan plant. They are determining a suitable location for their facility. Unipres U.S.A. Inc. will supply body stampings for Nissan vehicles built in Canton. Unipres will build a 150,000 square foot plant in Forest. Yorozu America, Inc. will build a facility in the Ceres Industrial Park in Vicksburg. Yorozu will supply various suspension components from its 80,000 square foot plant. To support the logistics requirements of the Canton plant, a new supplier logistics center will be built on the Nissan site in Madison County by a joint venture that will own and operate the facility. The majority owner will be a Mississippi-based, minority-owned company. The 200,000 square foot supplier logistics center represents a capital investment of $15 million. When fully staffed the center will employ 250 people.

FAA Issues Record of Decision Paving Way for FedEx in Triad

Since 1998, when FedEx officials announced a $300 million, 750-employee air freight hub at the Piedmont Triad International Airport in Greensboro, N.C, economic development officials in the Triad region have waited patiently to tout their market as the South's newest distribution center. On December 31, 2001, officials in the Greensboro and Winston-Salem region got word from the FAA that a third runway at the Piedmont Triad International Airport has been approved, paving the way for the FedEx hub. The Record of Decision by the FAA makes the airport improvements eligible for federal financial assistance and commits the airport to specific conditions, including strict environmental regulations. Officials with Forward Greensboro have come up with a marketing plan to tout the area's potential as a transportation hub. Marketing packages are being sent to site consultants that include a copy of the movie "Planes, Trains and Automobiles" under a jacket that reads "The Challenge of Getting from Point A to Point B is only funny in the movies."

New Spa City Xerox Plant Adds 290 Workers

Xerox Corp. has expanded its operation in Hot Springs, Ark., with a new 51,000 square foot e-services facility. The $4 million building will provide imaging, digital storage and retrieval services for customers such as Dow Chemical, Enterprise Rent-A-Car and McGraw Hill. The company has had an e-services facility in Hot Springs since 1987 that employed 85. The new center will employ 375 people, making Xerox one of the larger employers in the area.

Tampa Bay No. 1 in Job Growth

The U.S. Department of Labor's December Jobs Report ranked Tampa Bay as the No. 1 market in the U.S. in job growth this past quarter. Following the Tampa-St. Pete-Clearwater MSA are six other Southern markets including three other Florida markets placing in the top 10. West Palm Beach-Boca Raton ranked third, followed by Orlando at No. 4 and Jacksonville at No. 10. Tampa Bay's unemployment rate stood at 3.7 percent in October compared to 5.4 percent nationally. Tampa Bay was named the South's No. 1 major market in 1998 and 1999 by Southern Business & Development.

Fastest Growing Job Markets

1. Tampa-St. Pete-Clearwater, Fla
2. Fayetteville-Springdale-Rogers, Ark.
3. West Palm Beach-Boca Raton, Fla.
4. Orlando, Fla.
5. Rochester, Minn.
6. Laredo, Tex.
7. Northern Virginia
8. Sheboygan, Wis.
9. Madison, Wis.
10. Jacksonville, Fla.

Source: U.S. Department of Labor's December report

AMD Narrows Search

Officials with Advanced Micro Devices have developed their short list for a $3 billion, next-generation, 300mm chip plant. The company has narrowed its search to sites in South Austin, Tex. to San Marcos on the I-35 corridor. It has been reported that AMD is also looking at international sites for the 1,500-employee plant, which is expected to be operational by 2004 or 2005. In September, AMD announced it planned to close its two oldest plants in Austin, Fabs 14 and 15. It continues to operate Fab 25 in South Austin. The Staubach Company is directing the search for AMD.

Missouri Approves Rail Improvement Plan and $500 Million Bond Proposal For Highways, Bridges

The Missouri Department of Transportation approved a plan in December that allows the Kansas City Terminal Railway to spend $120 million to ease rail traffic on Kansas City's west side. In an unrelated story, the Missouri Highways and Transportation Commission authorized a $500 million bond-financing proposal that will be used to pay for the construction of highways and bridges in 2003. The proposal would give the commission the authority to issue bonds up to the maximum allowed by law, which is $500 million. As reported in this edition's "Around the South," The Road Information Program, or TRIP, cited Missouri as the state with the third-worst roads in the U.S. The report said that only Massachusetts and California has worse roads than Missouri.

December

Georgia has Best Roads, Followed by Alabama

The Road Information Program (TRIP), put out a report in December that ranked states' road systems from best to worst. TRIP's road condition evaluations are based on data from 2000 released by the Federal Highway Administration. According to the report, Georgia has the best roads in the country, followed by Alabama, Wyoming, Florida and Kansas, meaning four of the top five states cited for great roads are states in the American South. The state with the worst roads to drive: According to TRIP's report, that would be California, followed by Massachusetts, Missouri, Connecticut and Louisiana, meaning two of the five worst road systems are in the South.

Whoa, Good Buddy. Truckers Say Tennessee has the Best Roads

In its annual survey of truck drivers, Overdrive magazine reports that Tennessee's highway system is the best in the nation. The survey places Tennessee ahead of Florida, Ohio, Texas and Indiana. According to truck drivers who responded to the survey, the nation's worst roads are in Pennsylvania, New York, Illinois, Arkansas and Louisiana. NOTE: Former Tennessee Gov. Ned Ray McWherter, one of the South's most respected economic development governors over the last 15 years, made improving the state's road system a major priority. You can read more information about transportation issues in the South by turning to the "Transportation" section in this edition.

FiberCore Opens First U.S. Plant in Auburn

FiberCore Inc., a Charlton Mass.-based manufacturer of optical telecommunications fiber and components will build a $30 million factory in Auburn, Alabama. The plant, which is expected to open in 2004, will be the first U.S.-based plant for FiberCore, which has factories in Germany and Brazil.

Tampa Wins Large Job-Generator with Merck-Medco

Merck-Medco Rx Services of Florida, opened its first Merck-Medco in Tampa, a processing, dispensing and consulting home-delivery pharmacy, in 1987. In 1989, the company opened a second home delivery pharmacy and warehouse, also in Tampa. Between these two locations, Merck-Medco currently employs 1,500 workers. The company recently announced that it will open a new 1,000-employee call center in Tampa. This is Tampa's largest job announcement in two years. It is an unusual call center because this center will be certified as a pharmacy. About 700 of the employees will be customer service representatives, but the work force will also include as many as 100 pharmacists and several hundred administrative workers. At full capacity in 2003, the center will handle more than 200,000 patient inquiries a week.

Capital One to Expand in Tampa

Capital One has expanded its Tampa call center and plans for more growth. Since July 1, the company has added more than 100 new jobs at the 71-acre campus, and plans to add 1,000 more workers during the next six years. The new employees will handle calls from customers of Capital One's auto finance business.

Thomaston Gains 500 Jobs with Two New Companies

Two companies will locate in Thomaston, Ga. and create more than 500 jobs in the next 24 months. Six months ago Thomaston was hit hard when Thomaston Mills announced it was closing after more than 100 years in business. Standard Textile Co., a Cincinnati, Ohio-based manufacturer of health care, hospitality, and institutional textile products, will establish manufacturing operations at the former Thomaston Mills Peerless Division and traffic and roll warehouse, totaling almost 700,000 square feet. The company will employ 200 people. 1888 Mills will purchase the former Thomaston Mills Finishing Division, a facility of 542,000 square feet. 1888 is a specialty towel and textile products manufacturer based in Griffen, Georgia. The company will employ 300 workers.

Glass Manufacturer Opens Plant in Sparta, Ga.

Saint Gobain Desjonqueres, a high-end cosmetic and perfume bottle manufacturer, will open a plant in Sparta,Ga. and create 200 jobs. The international company manufactures glass for the insulation and building materials industries. The Sparta plant will be used to decorate cosmetic and perfume bottles for clients such as Estee Lauder and Ralph Lauren. The company currently operates six plants in Georgia with over 1,000 employees. Founded in 1665, Saint Gobain has been crafting glass for more than 300 years.

Billy Graham Bringing 600 Jobs to Charlotte

Evangelist Billy Graham is moving to his headquarters to Charlotte, his hometown. The Minneapolis-based Billy Graham Evangelistic Association is relocating to a site at Billy Graham Parkway. The new 250,000 square foot headquarters will be a $33 million investment and will employ as many as 700 workers. Functions of the ministry to be moved to Charlotte include administrative offices, TV, radio and film production units and distribution and mailing operations. The project will be built in phases, with the first phase of the development to use 100,000 square feet.

Here are Four Winners for 2001

Unemployment rates have been rising steadily the past year in the South. For example, Danville, Va., saw its unemployment rate rise from 3.2 percent to 9 percent in just the last year. Rocky Mount, N.C. saw its rise from 6.6 percent to 9.4 percent. Yet, we found four winners for 2001. Gadsden, Ala., showed nearly a four-point decrease in unemployment in 2001, from 9.5 percent to 5.8 percent. Cumberland, Md.'s unemployment rate dropped to 5.9 percent from 8.1 percent at the end of 2001 and Wheeling, W.V. saw similar results going from 4.5 percent unemployment at the beginning of 2001 to 3.5 percent at the end. Lastly, McAllen, Tex. saw its unemployment rate, while still high, drop from 13.4 percent to 12 percent from November 2000 to November 2001.

Arkansas PSC Says Repeal Mandated Deregulation

In December, the Arkansas Public Service Commission told the General Assembly that continued movement toward deregulation of the state's electricity market "is not in the public's best interest." The PSC recommended that the Legislature either suspend further steps toward deregulation until 2010 or repeal laws mandating deregulation altogether. The commission conducted a six month investigation on the effects of deregulation in Arkansas, and concluded that in five of six projections, an open market would result in higher electric rates, 13.4 percent higher for customers of Entergy, Arkansas' largest power supplier.

Fort Mill, S.C. Distribution Center to Employ 1000 Workers

Discount clothing retailer Ross Stores will hire up to 1,000 people over the next five years to staff a new 1.26 million square foot regional distribution center in York County. The center, which will be completed by May 2002, will include a 34,000 square foot office complex and will be Ross' third U.S. distribution center.

Biopure to Invest $120 Million, Create 185 Jobs in Sumter County, S.C.

Biopharmaceutical company Biopure Corp. is investing up to $120 million to build a plant in Sumter County. The plant will be used to support the company's Oxygen Therapeutic products for use in human and veterinary medicine. The plant will employ 185 workers and will make a drug that will be used to eliminate or reduce red blood cell transfusions in patients undergoing elective surgery.

Moratoriums Surface in Florida Bill

A proposed bill before this year's Florida Legislature seeks to tie water conservation with real estate development. House Bill 569, co-sponsored by state Reps. Johnnie Byrd and David Russell, would require local governments to set plans for long term availability of water supplies for approved land development. The bill is similar to one sponsored by Byrd last year that would have tied real estate development decisions to water supply, including placing a moratorium on development during drought conditions. That bill did not reach the House floor by the time last year's session ended. For more information on House Bill 569, go to www.leg.state.fl.us.

Ford to Build Parts Center in Fort Worth

Ford Motor Co. will build a 225,000 square foot regional parts distribution center at the Alliance Airport industrial park in Fort Worth. The facility will distribute parts to Ford Lincoln Mercury dealerships within a 250-mile radius and employ 50 workers.

BAE Systems to Open Facility, Create 1,000 Jobs in Reston, Va.

BAE Systems North America, the British defense and aerospace contractor, will open a new systems-integration unit in Reston in fall 2002 and add 1,000 new jobs at the facility over three years. The Reston operation, a new business division for the Farnborough, England-based company, will be located in a 135,000 square foot office currently under construction.

Ferguson Expands Headquarters in Newport News

Ferguson Enterprises will create 400 new jobs at its current corporate office in Newport News. Ferguson, the largest plumbing supply distributor in the U.S. is owned by Wolseley plc, the world's largest specialist trade distributor of plumbing and heating products. Ferguson's expansion resulted in the need for an additional $20.5 million facility at the campus in Newport News.

Atlanta Pulp & Paper Chooses Brunswick County for Facility

Georgia-based Atlanta Pulp & Paper has located a new facility in Brunswick County. The company, which has begun operations in Brunswick County, makes and sells recycled pulp to paper manufacturers. Brunswick will gain 282 new jobs from the move.

November

Honda On Roll Again

Honda announced it will create 800 more jobs and spend another $140 million to increase capacity at its Odyssey minivan plant in Talladega County, Ala. The announcement came during dedication ceremonies at the new plant. Two years ago, Honda said it would hire 1,500 workers and invest $440 million into the Lincoln, Ala. plant. The expansion will enable Honda to produce 150,000 minivans a year.

Bridgestone Picks Alliance

Bridgestone/Firestone, the largest subsidiary of the world's largest tire and rubber company, has leased a 608,322 square-foot build-to-suit in the 15,000-acre AllianceTexas development. The deal is the largest lease in terms of square footage in D/FW since 1999. The company chose the Alliance site over a site north of D/FW in Denton, Tex. The large distribution facility will be built by Hillwood. Nashville-based Bridgestone/Firestone is a subsidiary of Japan-based Bridgestone Corporation.

TVA Chairman Wants to Boost Power Capacity, Cut Prices

Glenn McCullough, the Tennessee Valley Authority's new chairman, said he wants the government utility to improve its power capacity and environmental performance while paring its debt and the price of power. McCullough wants to pay down TVA's $25.5 billion debt, which is among the largest of any utility in the country; possibly restart Browns Ferry Unit No. 1 and finish construction of the Bellefonte nuclear power plant in Alabama; and clean up some of its dirtiest coal plants. At the same time, he pledged to keep electric rates among the lowest in the country.

Georgia or Alabama May Get New Nuclear Plant

Although it's been almost 30 years since the government has licensed a new nuclear power plant, Southern Company may seek permission to build one in Georgia or Alabama. Southern is considering applying for a federal license to build a new plant on the site of one of its existing power plants. The Atlanta-based utility conglomerate is one of several power companies considering building nuclear power plants because of the California energy crisis and a round of pro-nuclear legislation in Washington, D.C. Soaring fossil fuel prices and a new political climate in the nation's capital appear to be reviving the nuclear industry. The 1979 accident at the Three Mile Island nuclear power plant in Pennsylvania, which was a near meltdown, drastically slowed the momentum of the nuclear industry.

Alabama Governor to Propose Corporate Income Tax Changes

Alabama Gov. Don Siegelman said on Oct. 29 he will propose corporate income tax changes, but not sales tax increases, to raise some of the more than $150 million a year he says the state needs to avoid education spending cuts. He plans to call state lawmakers into a special session before Christmas to discuss money raising ideas for the state.

Georgia Automotive Supplier Expands

Gov. Roy Barnes announced on Nov. 2 that HL-A Company, a Honda part supplier, will expand an existing plant in Bremen creating 125 new jobs by early next year with an additional $30.5 million investment by 2004. Over the past five years, Georgia has attracted five Honda part suppliers bringing more than 2,100 jobs with a total investment of more than $188 million.

Human Genome Sciences Expands Again in Maryland

Human Genome Sciences, one of the South's largest life sciences companies, has announced a $100 million expansion of its facilities in Rockville, Md. The new facility will manufacture commercial quantities of multiple drugs. The 360,000 square-foot facility will be completed in 2003. This is the second expansion by Human Genome this year.

Economic Outlook for Houston Tops Growth in Large Metros

Among the nation's 40 largest regional economies, Houston will have the highest growth rate in real Gross Area Product from the second quarter of 2001 through the second quarter of 2002, according to a forecast prepared by Economy.com, formerly Regional Financial Associates. The firm expects Houston's economy to grow 2.20 percent over the period. The forecast -- a revision of a previous forecast -- is designed to account for economic changes following the Sept. 11 terrorist attacks.

Volkswagen of America to Open New Parts Distribution Facility in Texas

Volkswagen of America will soon open a new, state-of-the-industry parts distribution center in Haslet, Tex., that will serve 51 Volkswagen and 23 Audi dealerships in Texas, Arkansas, Colorado, Kansas, Louisiana, Mississippi, New Mexico and Oklahoma. The 360,000 square-foot facility will be Volkswagen's largest parts depot in North America. The distribution center is located in the AllianceTexas Development, which features an industrial airport and intermodal rail hub center.

Maryland Surplus Has Pols Giddy

Maryland officials are ecstatic over a large surplus for fiscal year-end 2001. State Comptroller William Schaefer released figures that showed a $538 million surplus, with $191 million actually available after the General Assembly appropriated $347 million for spending in the current fiscal 2002 budget. The bulk of the excess tax revenue came from state income and estate taxes. Sales taxes, on the other hand, came in 21 percent below what Maryland officials were expecting.

Nissan Moving Maxima Line From Japan to Tennessee

Japan's Nissan Motor Company is beginning to transfer manufacturing operations of its popular Maxima sedan from Japan to its massive plant in Smyrna, Tenn. The Maxima is being remodeled for a 2003 rollout at the Tennessee facility. In 2000, Nissan announced a $1 billion expansion of existing plants in Smyrna and Decherd, Tenn. The Decherd plant makes transaxles and engines. Nissan's Smyrna plant has produced the Altima sedan and small trucks.

Nissan Workers Vote 2 to 1 Against UAW

Workers at Nissan's automotive plant in Smyrna, Tenn., voted 3,103 to 1,486 against organizing under the United Auto Workers. The 2 to 1 margin was roughly the same as the failed unionization vote at the plant in 1989. Nissan produces 400,000 Altima sedans, Frontier pickup trucks and Xterra sport utility vehicles at the 5.2 million-square-foot facility. The UAW has repeatedly attempted to gain a foothold in Smyrna. Since the failed 1989 vote, organizers have unsuccessfully tried to place a unionization vote before workers on two occasions, but had been unable to garner enough signatures to prompt a vote. If the UAW vote had been successful, the Smyrna plant would have become the first foreign-owned automaker with UAW representation.

Maryland Ranked No. 1 Digital State

The Center for Digital Government's 2001 Digital State Survey has ranked Maryland as the nation's No. 1 digital state. The survey showed that Maryland's state government ranked first in the Electronic Commerce/Business Regulation sector with a score of 100 percent. The Digital State Survey assesses the progress state governments have made in using digital technology to improve the delivery of services to their citizens. States were judged on the availability of business information, regulations, forms and online assistance, and the ability to submit required paperwork and payment using the Internet. State of Maryland agencies offer citizens opportunities to conduct business online including driver's license renewal and vehicle registration, business registration and licensing, professional license renewals and licenses for hunting and fishing. In addition, the Comptroller of Maryland was the first in the nation to provide an online registration system for business tax accounts.

Southern Governors Seek Help For Textile Job Losses

The governors of Alabama, Georgia, North Carolina and South Carolina sent a letter to President George W. Bush recently to encourage him to use his authority to address the problems with the U.S. textile industry. In the letter, the governors of the nation's four largest textile producing states asked the President to deal with the textile industry crisis through the use of existing laws to attack unfair trade practices and end imports from countries that use child labor. The U.S. textile industry has lost more than 60,000 jobs in the past year, including over 25,000 in Alabama, Georgia, North Carolina and South Carolina alone.

Southeast Top Region for Plant Locations

A survey conducted by the Manufacturers Alliance/MAPI, an Arlington, Va.-based manufacturing research group, shows that the Southeastern U.S. is the favored location for new U.S. manufacturing facilities, with 50% of respondents favoring the region. The top five factors favoring the Southeast included labor costs and quality, proximity to customers, government incentives, transportation infrastructure and regulatory/business climate.

Alabama Passes Rural Tax Breaks

Many Southern states have developed tax breaks for companies that locate in distressed counties. But Alabama's new rural initiatives are breaking the mold. The Alabama House has passed legislation that gives tax breaks to companies that employ as few as five people and invest as little as $500,000 to open or expand an industry, warehouse or research center in a poor county in the state. The company would have to pay workers at least $8 an hour to qualify for the tax break. The business must be located in one of two dozen Alabama counties with high poverty and joblessness rates. The uniqueness of the plan is that it is designed to give the very poorest counties in Alabama an opportunity to attract very small businesses.

Southern Markets Do Well in Economic Study

An annual survey that determines which local U.S. economies are the best included five Southern markets in its top 10. The study, conducted by Policom Corp., measures how consistently each market's economy has grown in size and quality over an extended period of time. Taken into account were factors such as per capita income, employment, annual earnings, retail trade, construction sectors, and welfare benefits. The study placed emphasis on communities that had slower, more consistent growth between 1975 and 1999. Markets that had a history of "boom and bust" were ranked lower in the study. Austin, Tex., topped the survey for the third year in-a-row. In addition to Austin, other markets making the top 10 included Dallas, Atlanta, San Antonio and Raleigh-Durham in the South, Seattle, Denver, Salt Lake City and Fort Collins, Colo. in the West and Madison, Wis. in the Midwest.

Tax Incentives Considered in W.V.

West Virginia Gov. Bob Wise's administration is looking to introduce new tax incentives for locating industry before the Legislature ends its 2002 session. Wise has not been specific about his plan, however, business officials in West Virginia have complained about the state's tax structure and high workers' compensation rates.

Atlanta Ranked No. 1 in Business Owner Diversity

Atlanta is indeed the land of opportunity according to Demographics Daily. Atlanta earned 94.44 points on Demographics Daily's 100-point business-diversity index, designed to measure an area's willingness to extend economic opportunities to all people, regardless of race or gender. Second place was Miami, the only metro earning at least 90 points. Rounding out the top five were Orange County, Ca., San Francisco and Seattle. The survey was based in part after the release by the U.S. Census Bureau this year of 1997 statistics on business ownership by women, blacks, and Hispanics.

Migration to the South

Quick. Which U.S. region has the most people? The title of this magazine probably tipped you off to that answer. But do you know just how many people live in the South? How about 44.5 million more than how many live in the West; 51.7 million more than how many live in the Midwest; and 53.4 million more than how many live in the Northeast. In fact, with a 2000 Census Bureau count of 54,377,978, the Northeast has just about half of the South's 107,736,849 residents.

In 1960, the South's percentage of the total U.S. population was barely 31 percent. Today, it's almost 40 percent. The following chart outlines the South's remarkable increase in population from 1960 to 2000.

Source: U.S. Census Bureau

October

Louisville in Compliance

For the first time since 1972, the Louisville area has met the national smog standard. EPA officials declared the metro area in compliance with rules for ground-level ozone. Industries in Louisville have spent over $50 million since 1990 in the reduction of their emmissions of nitrogen oxides and other pollutants.

Houston's Five Year Clean Air Plan

The EPA has approved Houston's five-year clean air plan. The plan, which an EPA official called "the most innovative and technically advanced clean air plan ever," is expected to cut nitrogen oxide emissions by 75 percent by 2007. The clean air plan includes reducing highway speeds in Houston to 55 mph, stricter tailpipe emissions testing and the banning of gas-powered lawn equipment during morning hours in the summer. The plan also calls for major industry in Houston to to reduce nitrogen oxide emissions by an average of 90 percent by 2007.

Orlando International Named Top Airport by J.D. Power

For the second consecutive year, J.D. Power and Associates has ranked Orlando International Airport as the No. 1 airport in North America in its Airport Passenger Satisfaction Study. The airport received the highest marks in overall passenger satisfaction within the large airport category, or those airports that handle 30 million or more passengers annually. J.D. Power evaluated 42 major North American airports over the summer. Orlando International received the highest marks for terminal facilities; gate areas; airline check-in; baggage claim; security check process; and food, beverage and retail services. The airport has also received recognition from Consumer Reports and a four-out-of-four stars from the Wall Street Journal. Over 12,000 evaulations from travelers were received by the California-based marketing information services firm.

Massive Jolt to Raleigh-Durham

With the demise of Midway Airlines, shortly after the September terrorist attacks, went nearly half of the flights out of Raleigh-Durham International Airport. Midway, based at RDU, flew 115 flights per day out of the airport. In addition, other carriers have dropped 15 other flights out of Raleigh-Durham International since the attacks. Given the dire condition of the air travel industry, few carriers are expected to fill the lost flights leaving business, especially those in Research Triangle Park, in a lurch. In a related story, initial plans for a $1 billion expansion of the airport have been put on hold.

Mitsubishi Picks Orlando for Western Hemisphere HQ

Mitsubishi has selected the Orlando area for two major facilities. Mitsubishi Heavy Industries of America will build a power systems service and manufacturing center in Orange County and has chosen Lake Mary in Seminole County for the Western Hemisphere headquarters for its Power Systems Division. Together, the two facilities will create nearly 500 jobs in the Orlando area. Mitsubishi's manufacturing center will be located in Orlando Central Park. Both projects are a result of the power plant boom in the South.

Best Buy Opens Distribution Center in Dublin, Ga.

Minneapolis-based Best Buy Co. has opened a $40 million regional distribution center in Dublin, Ga. The electronics retailer is hiring 250 employees for the 748,000-square-foot facility. The new center will supply Best Buy stores in Georgia, Florida, North Carolina, Alabama and Tennessee.

Millennium Marketing to Add 500 Jobs in Shawnee, Kan.

Telemarketing company Millenninum Marketing has moved to a new headquarters in Shawnee, Kan. and will add 500 jobs to its operations by year's end. The company, a national marketer of magazine subscriptions, recently moved from a 2,000-square- foot office in Shawnee into a 42,000-square-foot converted retail space in the Shawnee Shopping Center.

Cox Plans Call Center Near Wichita

Atlanta-based Cox Communications will build a new customer call center in northeast Wichita, a development that will bring 150 new jobs during the next three years. The 35,000-square-foot center in the Comotara Industrial Park is designed to centralize much of the company's customer service calls in one location.

Automotive Supplier to Locate in Shreveport

Another automotive supplier for GM's expanding automotive facility in Shreveport is landing in the area. Louisville, Ky.-based T&WA, a tire and wheel assembly company, is breaking ground on a 43,000-square-foot facility in the Shreveport area. The company is expected to employ 27 workers at the plant, which is scheduled to open in May of next year. GM's Shreveport plant is currently undergoing an $800 million expansion.

Human Genome Sciences Building $250 Million Campus in Rockville, Md.

Human Genome Sciences is building a new research and development and corporate campus in Rockville, Md. The company has broken ground on the more than $250 million first phase of the project. When complete, the 55-acre campus will provide more than one million square feet of office and lab space in interconnected buildings. Human Genome produces gene-based pharmaceuticals.

Harley-Davidson To Expand Kansas City Plant

Harley-Davidson will hire 300 people over the next few years as part of its plans to build a new motorcycle at the company's Kansas City plant. Harley is planning the production of a new bike called the V-Rod.

Target to Build Large Distribution Center

Target officials have selected a site near Lugoff, S.C. for a 1.35 million-square-foot distribution facility. Ground was broken in October for the $85 million project, which is expected to employ as many as 1,000 workers by 2006. The larger retailer will serve stores in Georgia, Virginia and the Carolinas from the facility.

Williams Refining and Marketing to Invest $400 Million in Memphis

Williams Refining and Marketing, the nation's largest-volume transporter of natural gas, is investing $400 million in an expansion of its current Memphis operations. The company plans three projects in the city which will create a total of 90 jobs. Current employment for Williams in Memphis is 300 people. The project will include expanding Williams' refinery, building a power generation facility and constructing a support facility.

Auto Supplier Expands in Dayton

The Lear Corp., a maker of automotive interior products, is expanding its Dayton, Tenn. plant by 80,000 square feet and hiring 100 more employees. The company recently secured new contracts with Ford, Nissan and GM.

Headquarters Moved From California to Dallas/Fort Worth

Kinko's Inc. officials have announced the company is relocating it headquarters from Ventura, Ca. to the Dallas/Fort Worth area. Officials with the company have cited costs as the main factor behind the move. One company official pointed to the fact that there are no income taxes in Texas and housing and office space costs less there than in California. Up to 500 jobs are expected to be created when the company relocates. Officials with Kinko's are searching for approximately 100,000 square feet of space in the Dallas/Fort Worth region.

Aerospace Company Announces Expansion

West Virginia Gov. Bob Wise announced the expansion of FCX Systems to a new 36,000-square-foot building in the Chaplin Hill Road Industrial Park, Monongalia County. "FCX has been an important part of West Virginia's economic family since 1987," Wise said. "Participating in a company's success is what economic development is all about." FCX systems, which designs, manufactures and sells solid state frequency converters worldwide for commercial aviation, private, government, corporate and industrial lab applications, employs 67 people and plans to double its workforce within three years at its new location, with an investment of $2.7 million.

Maryland Department of Planning Intervenes

Maryland Gov. Parris Glendening, the first governor to implement smart growth policies to limit suburban sprawl, is opposing three developments in Maryland. The state Department of Planning is opposing a Wal-Mart near Chestertown, a condominium project in Annapolis and a residential development in Gaithersburg. Glendening's administration is opposing the developments to show that increased density must be accompanied by quality design. State officials have no power to approve or reject any of the projects, but are lending their expertise in planning, design and legal issues on the developments.

State of Maryland Buys Arundel Wetlands

Maryland has purchased 614 acres of wetlands and forests along the Patuxent River in Anne Arundel County. The $4.3 million acquisition is the first purchase under the state's new GreenPrint Program aimed at protecting open space and environmentally sensitive areas and encouraging smart growth. The land purchase is part of Gov. Parris Glendening's $35 million pet project to secure greenspace in the state. Glendening is one of the nation's top smart growth advocates.

Hog Farm Restrictions In S.C.

New regulations put into place by the South Carolina Department of Health and Environmental Control Board have all but ended the possibility of new hog farms in the state. State officials have imposed stringent temporary permitting for large hog farms and plan to implement permanent environmental rules on factory-style hog farms. The temporary regulations apply to hog farms that produce 1 million pounds of pork a year with eight or more barns. The regulations are in response to public concerns about the farms' effect on air and water quality in the Palmetto State.

Utility's Mercury Testing Shows Promise

Officials with Atlanta-based Southern Co. said new technology being used to reduce mercury emissions from coal-fired power plants is showing promise. The first phase of the testing was recently completed by ADA-Environmental Solutions at Southern Co.'s Gaston plant near Wilsonville, Ala. Alabama Power, a subsidiary of Southern Co., was selected by the U.S. Dept. of Energy's National Energy Technology Laboratory to participate in the nation's first full-scale program to test advanced mercury control technologies. Results from the test showed that mercury can be removed at rates between 80 and 85 percent when activated carbon is injected into the existing baghouse ash collection system. The high level of mercury control was achieved in a short test of seven days. Long term testing would indicate costs and overall performance of the technology.

Subterranean Freight Tunnel Contemplated In Texas

Officials at the Texas Transportation Institute are in the preliminary design phase of a 6.5-foot-wide, concrete reinforced tunnel that will be used by train-like vehicles running on electricity. The underground train conceivably would move freight at speeds of up to 55 mph. No drivers would be needed for the trains and fuel costs and weather would not be factors. The idea would help free up roadways of large trucks, officials said. Researchers with the Institute said studies over the next two years will determine if the freight tunnel is cost effective.

Deregulation Postponed in Oklahoma Until at Least 2003

Gov. Frank Keating signed into law a bill that establishes a nine-member elected official task force to study the effects of electric deregulation in Oklahoma. The group's final report must be presented to the Governor, the Senate Pro Tempore and the Speaker of the House by December 31, 2002. Until that time, the implementation of electric restructuring is on hold. A critical issue for the task force to consider is the transmission component of electricity. Oklahoma has 18 new power plants for 3-million people. In comparison, California, which did not build a single new plant in the 1990s, has 34 million residents. Oklahoma currently has the eighth lowest electric power prices in the country.

Louisiana Officials Consider Deregulation Dynamics

Louisiana's Public Service Commission is considering the effects of deregulation. The PSC maintains limited deregulation, especially in areas of heavy industry, should be allowed under strict conditions. Other officials in Louisiana maintain that deregulating the utility industry statewide is not in the best interest of the state as a whole. However, PSC chairman Jimmy Field says limited deregulation may introduce competition to the wholesale market and could stimulate more reliable and cheaper service to heavy industry sites.

Texas Launches Pilot Program

Power customers in Texas who signed up for the state's deregulation pilot program, have begun to switch to new power generators and suppliers. Texas officials created the pilot program to give competing utilities several months to test their systems before statewide deregulation begins on Jan. 1, 2002. Texas officials are confident full-scale deregulation will go smoothly at the beginning of the year, when customers of investor-owned Texas utilities such as Reliant and TXU can switch to competing generators and suppliers. "We have done all of the testing and so have our market participants," said Sam Jones, chief operating officer for the Electric Reliability Council of Texas. "We just need to get it done and get down the road."

September

Hyundai Update

Officials of the massive Korean manufacturer aren't talking, but rumors are flying that Opelika, Ala., is the site for the company's first North American automotive plant. The size of the plant, employment and investment have been reported in several newspapers, including a cover story in the Birmingham News the first week of September. The plant, rumored to be similar in size to Nissan's new plant in Canton, Miss., will enable Hyundai to gain a foot-hold in the U.S. market. Sales of Hyundai automotive products have increased in the U.S. in recent years, after experiencing problems with quality when the products were introduced initially in this country.

Charlotte Wins Out

SPX Corp., a Michigan-based technical products and systems company, announced it will build a 100,000-square-foot headquarters office in Charlotte. Fairfax County, Va., was also in the running for the facility. The company will employ at least 50 when it begins operations in the spring of next year.

Maryland, Virginia Jobless Rate Bucks National Trend

While the national jobless rate sped toward the five percent mark, Maryland officials proudly announced that their state's unemployment rate actually dropped in August to 3.7 percent. Even better, Virginia's jobless rate dropped to 2.9 percent. That's down from 3.2 percent in July. What's impressive about Maryland and Virginia's low unemployment rates this summer centers around the two state's large concentration of high-tech industries. High-tech dead? Not in Virginia and Maryland!

VeriSign Expands in Northern Virginia

Who says tech is dead? VeriSign plans to expand in Herndon, Va., by leasing an entire 405,000 square-foot office facility in Woodland Park. The new 13-story office building, named Waterview I, is close to completion. The new facility can accommodate up to 1,600 employees.

Nestle Breaks Ground in Arkansas

Nestle USA has begun construction on its $165 million frozen food plant in Jonesboro. The facility is the largest new production operation in company history. Slightly over 1,000 employees are expected to work at the plant when full operations begin.

Boeing Changes Sales Strategy on Atlanta Area Campus

The Boeing Company's 70-acre campus, located northeast of Atlanta in Gwinnett County, may be split up rather than sold in one piece. Boeing has tried for two years to sell the entire campus, which includes a two-building office/warehouse facility, a four-story, 106,000 office building and 40 acres of undeveloped land for $23 million. According to officials with the company, the pieces of the campus may be more attractive than the whole. Boeing closed the missile manufacturing facility in 1999.

Birmingham, Nashville Selected for Cingular Call Centers

Cingular Wireless, one of the world's largest cellular providers, has announced it is closing several call center operations in the South and consolidating to larger facilities in Birmingham and Nashville. The company is closing facilities in Orlando, Boca Raton, New Orleans and Jackson, Miss., as well as smaller operations in the Southeast. The two new operations in Birmingham and Nashville are expected to open in October and employ up to 600.

Trammell Crow to develop $40 million park

Trammell Crow is breaking ground on its first distribution center in Memphis. The Dallas-based commercial real estate giant is developing Summit Distribution Center, a 2 million-square-foot, $40 million project. TC plans to build a 708,000-square-foot industrial building on 38 acres of the park in Phase I of the project.

Penske Logistics Opens 100,000 s.f. Facility in Texas

Penske Logistics has opened a 100,000-square-foot distribution center in Los Indios, Tex., which is located near the Mexican border. The new facility will provide distribution assistance to Panasonic's manufacturing operations in Mexico. Penske's began working with the company in 2000 when Panasonic needed transportation management of its plants in Mexico and South Texas.

August

Oreck's Suppliers to Build on Mississippi Gulf Coast

The Long Beach, Miss.-based Oreck vacuum cleaner plant has prompted two suppliers to open facilities near the Mississippi Gulf Coast plant. Oregon-based Puget Plastics Corp., which makes various parts for Oreck, and Kentucky-based John Anson, are planning supplier operations that are expected to employ up to 650. The facilities will be located so close to the Oreck plant, that parts will be moved by a conveyer belt.

Ford Plans Two Distribution Facilities in Memphis

Ford Motor Co. has announced it has signed a lease for 360,000 square feet of distribution space in Memphis and plans to add up to 640,000 more square feet in the near future. The company is expected to hire 220 workers at the facilities. The announcement is part of the auto giant's plans to add 11 parts distribution centers in the U.S. in the next three years.

Kikkoman Searching for Site in South Carolina

Kikkoman International, the importer and producer of cooking sauces, sake and soy sauce, is searching the Charlotte area and two regions of South Carolina for 100 acres to build a plant that could become a $60 million production facility. The company would begin with a $10 million investment, building its third U.S. production center. The company plans a 100,000 square foot building for soy sauce production. The facility could be expanded later. The plant would begin with 25 workers, with growth to 50 workers during the first two years of operation. In their search, Kikkoman is using the code name Project Dirt. In the Charlotte area, Kikkoman is searching for a site in Gaston, Cleveland, Stanly and Chester counties. The South Carolina Department of Commerce is encouraging the company to also consider locations in Florence and Orangeburg.

Austin Airport Development

An 111-acre, master-planned business park is being built right at the two entrances of Austin's Bergstrom International Airport. The new park will feature a privately owned, 2,500-space parking center and direct access to air freight facilities at the airport.

Cigna Healthcare to Hire 400 in Charlotte

Cigna is adding 400 to its payroll in Charlotte. The company will hire 200 claims processors and is looking to add 200 more by the end of 2002. Also, nurses and management personnel are expected to be hired in the expansion.

Mirant to build plant in Gastonia

Atlanta-based Mirant Corp. plans to build a 1,200-megawatt natural gas-fired power plant in Gastonia. The facility, which requires regulatory approval, will be Mirant's first in North Carolina. Mirant is expected to invest $500 million in the plant, create 35 permanent jobs and as many as 300 temporary construction jobs.

Greensboro Raises $1 million in Incentives for Teachers

The Greensboro Chamber of Commerce said today its education committee had raised more than $1 million in incentives for new teachers in Guilford County. Some of the incentives also will be used to attract new teachers next year. Incentives, which were donated by chamber members, range from discounted apartment rates and food coupons to reduced closing costs for home purchases and computer training discounts. The incentives were raised as part of the effort to lure a total of 500 new teachers to the county for both public and private schools.

Sundquist Makes More State Budget Cuts

Gov. Don Sundquist announced a budget cut of $1.55 million from the State Department of Finance and Administration, which includes eliminating 16 job positions and continuing a freeze on new hires.
It's the fifth in a series of state budget cuts totaling $33 million. That includes a $12 million cut to higher education; about $1 million of that will come out of the University of Memphis. With each new budget cut announcement, Sundquist has referred to the state budget as a "disaster." His veto of the budget was overridden during a special session of the state Legislature.

Manufacturer expands in Cleveland TN

Cormetech, Inc., a manufacturer of pollution control equipment, is expanding its facility in Cleveland. The company expects to hire up to 65 new employees. Cormetech makes products that reduce nitrogen oxide emissions from coal and gas-fired power plants.

July

Spec Distribution Going Up Near Hartsfield International

A 96,000 square-foot distribution center is being built near Atlanta's Hartsfield International Airport. The new site is located near Interstate 75 and Forest Parkway on the eastern side of the airport. Rents will range from $4.75 to $5.25, depending on the amount of space leased.

UPS Distribution Center Slated for Atlanta

Atlanta-based UPS has purchased 30 acres in an Empowerment Zone located just south of Atlanta's Turner field for a new package distribution center. The large distribution hub will be UPS' fifth in the Atlanta area. In addition, UPS operates 24 smaller hubs in Atlanta. The new hub is expected to house up to 300 workers. Former President Clinton created the Atlanta Empowerment Zone in 1994. The area includes 30 poor inner city neighborhoods that ring the city's central business district.

Va. Gov. Gilmore Announces Wal-Mart Distribution Center in Louisa County

Governor Jim Gilmore today announced that Wal-Mart Stores, Inc., will locate a food distribution center in the Zion Crossroads area of Louisa County, creating 600 new jobs for the region. The 880,000 square-foot facility will be located on the northeast corner of U.S. 15 and I-64. Construction will begin in spring of 2002, with planned service to stores expected in spring 2003. Louisa is a mostly rural county located between Richmond and Charlottesville.

Plant Closings Spike Unemployment Claims in June -- State Numbers are a Dichotomy

Like much of the rest of the country, the South has seen its share of plant and business closings so far this year. Unemployment insurance claims set year-to-date highs in June when nearly 70,000 laid-off or fired Southern workers filed claims. Especially hard hit was South Carolina. In June, 12,255 people filed jobless insurance claims in that state, a figure that led the South. The Palmetto State's June total is particularly disturbing, considering Texas, with over seven-times the population, had but 10,543 people file. Other states hit hard in the South include Florida (8,319 filings), Missouri (9,019), Kentucky (7,560) and Virginia (4,237).

Florida's, Virginia's and Texas' numbers really are not negative at all. With 15, 7.5 and 20 million residents respectively, a per capita sum would be very low when crunching numbers for those highly populated Southern states. Yet, Kentucky's, Missouri's and South Carolina's numbers are off the scale when looked at on a per capita basis. In comparison, Mississippi had but 1,276 filings in June, Louisiana had 745, Alabama 2,649 and Tennessee 2,572. Other than Tennessee, those are states in the South that compare favorably with South Carolina's population base.

North Carolina, whose Commerce Secretary Jim Fain has been very vocal about his state's bout of plant closings, had but 2,505 unemployment insurance filings in the Southern bloodletting of June 2001. In April, May and June, North Carolina had but 8,000 or so claims, certainly not enough to support Fain's public whining (but enough to be concerned). Interestingly enough, Maryland and Virginia, states in the South that are home to thousands of Internet-related firms, had 745 and 4,233 filings respectively, a relatively low total on a per capita basis for Virginia and an incredibly low total for Maryland. Apparently, Internet industry fires get hired immediately in Maryland.

North Carolina, Alabama, Mississippi, Georgia and Tennessee, states which have substantial low-wage industries in their rural areas, did not show alarming claims in June. More remarkably, Arkansas, which remains one of the South's lowest household income states, had only 489 unemployment insurance claims in June, an outstanding figure compared to other states in the South. Per capita, Arkansas' claims in June were the South's lowest, by a large margin. Could that mean existing industry in Arkansas is profiting when existing industry in South Carolina is not? Hard to tell.

States outside the South that saw large claims in June were those with the highest union participation. Pennsylvania (18,176), Ohio (9,401), Michigan (26,714), Illinois (13,605) and California (46,675) have seen unemployment claims consistently skyrocket every month since the first of the year. Unfortunately, South Carolina, a state that is particularly non-union, is right up there with them with 12,225 claims in June and is far beyond the aforementioned non-Southern states per capita.

How can these June unemployment insurance numbers help you in your site search? Well, they can't, really. On second thought, maybe they can. One month, even if it it happens to be an alarming period, cannot indicate much. For example, in South Carolina's case, it could be that many apparel and textile jobs were eliminated (an industry that's leaving the South in droves) in the spring quarter, as opposed to previous quarters, which was the case in other Southern states. Yet, how do you account for neighboring North Carolina's low claim figure, a state that has a much larger apparel industry than South Carolina? And what about Arkansas' low claim numbers? And Alabama's? Furthermore, the Internet meltdown has seen more jobs eliminated than any industry sector. Why then did Maryland and Virginia, the Internet capital of the South, report only 4,978 filings in June? It's a dichotomy; a misnomer; a freak of economics.

What is not a freak of economics is the fact that in June of 2000, exactly one year from the June 2001 bloodletting, only 403 unemployment insurance claims were filed in entire 17-state American South region. That's only 69,500-or-so less than June of 2001. That, alone, is a major Southern economic indicator that was present at the beginning of the summer.

Tempers Fly Over Smart Growth Plan

Loudoun County, Va., one of the fastest-growing areas in the South, has adopted a new smart growth plan that seeks to keep two-thirds of the county's rolling farmland free of development. The Loudoun County Board of Supervisors voted 7 to 2 to adopt the smart growth plan. Business groups opposed the smart growth plan. In fact, County sheriff deputies were called in to restore order during voting proceedings. Over 200 opponents of the plant packed the County government center and repeatedly interrupted the voting proceedings. Loudoun County is located in northern Virginia, a region that has seen rapid development in the last several years.

Boeing's New Facility in Houston

The Boeing Company is moving into a new 399,000 square-foot facility in Clear Lake, Texas, a suburb of Houston. The facility will serve has the headquarters for Boeing's International Space Station Program, of which the company is the prime contractor. The facility will house 840 employees.

Textron Expands in Columbia, Mo.

Textron Automotive is building a $10 million, 64,000 square-foot facility that will double production at its Columbia, Mo.-based instrument panel plant. The expansion will add 140 workers to company payrolls. Textron built the existing plant after securing a contract with Ford and Mitsubishi. In 1995, Textron added Chrysler to its product line.

Virginia Gov. Gilmore Announces Major Expansion at Ford Motor Company's Norfolk Plant

Gov. Jim Gilmore and Ford Motor Co. today announced the expansion of its Norfolk assembly plant with the addition of a 350,000 square-foot body shop. This expansion will generate up to 200 new jobs over today's employment level of 2,400. During the next three years, Ford will invest approximately $375 million to expand the Norfolk facility, which assembles the popular F-150 pickup trucks.

Gov. Gilmore approved a $3 million grant from the Virginia Investment Partnership program to assist Ford with the expansion. Ford's Norfolk facility produced approximately 240,000 F-Series pickup trucks last year. The plant is among the company's oldest assembly operations and originally produced Model T cars when it first opened in 1925.

John Deere to Build Plant in Rock Hill, S.C.

Illinois-based John Deere Co., is building a new plant in Rock Hill, S.C., which is located just across the state line from Charlotte, N.C. The plant will produce parts for large lawn tractors and is expected to house up to 165 employees. The new plant is a partnership with Yanmar Diesel Engine Co., the Japanese engine manufacturer.

Georgia Ranked Second-Best Location for Automotive Industry

Business Facilities, a monthly business magazine, has ranked Georgia as the second-best location in the U.S. for the growing automotive industry in the South.

The rankings were based on industry figures from the U.S. Department of Labor that tracked the increase in the number of automotive employees and in the number of automotive establishments from 1995 to 1999. In 1998, Georgia ranked sixth in the U.S. in automotive employment with about 40,000 workers and ranked seventh in total vehicle production. Two major U.S. automobile manufacturers, General Motors and Ford Motor Co., have maintained production facilities in Georgia for decades. The Georgia Department of Industry, Trade and Tourism has located 26 transportation equipment projects in Georgia, creating 6,000 jobs with an investment of $595 million since 1995.

Of the top 10 states cited in the report, seven are Southern states. Kentucky led all U.S. states in the increase in the number of automotive employees and in the number of automotive establishments from 1995 to 1999, followed by Georgia, South Carolina, Michigan, Texas, Virginia, Indiana, Alabama, North Carolina and New Hampshire.

NC's Lee Act Performing Well, but Facing Competition From Other States

North Carolina's main legislative initiative for attracting good jobs and critical industry investment is paying off overall, but incentives offered by competing neighbor states "have in most cases matched our tools, and then surpassed them," N.C. Commerce Secretary Jim Fain told members of the General Assembly's finance committees today.

"Without the William S. Lee Act, we would have been without a major tool in an escalating interstate competition, and it will continue to have an important place in our took kit," Fain said. But he added that North Carolina's recruiting incentives "compare quite unfavorably with those offered by neighboring Southeast states."

Fain made the assessment during delivery of a progress report to the joint legislative hearing on the William S. Lee Quality Jobs and Business Expansion Act. The act, enacted in 1996 and amended each year to improve its effectiveness and accountability, provides tax credits to manufacturing firms for job creation, investing in machinery and equipment, increasing spending on research and development, training workers and establishing or expanding central administrative office or aircraft facilities.

Fain said analyses of the Lee Act's performance by the Department of Commerce and by Dr. Michael Luger of UNC's Kenan Institutute for Private Enterprise "generally indicate that the act is doing what it was intended to do," including:

* Modernizing the state's traditional industries by encouraging $2.6 billion in investment in machinery and equipment.
* Spurring $1 billion in increased research and development by N.C. companies.
* Stimulating a more-than-proportionate share of jobs and investment in the state's least- prosperous counties.
* Creating additional jobs and investment indirectly through increased economic activity in the state.

Fain delivered his update on the act in the context of troubling economic trends for the state. In the past year, North Carolina has lost nearly 36,000 manufacturing jobs, about half in the textile and apparel industries.

"I don't need to tell you that many of our communities are in distress," Fain said, adding that a national economic downturn, energy price increases and a strong dollar has caused "an ongoing loss of manufacturing jobs accelerated at an alarming rate to what only can be called recession levels."

Report Says Maryland Pulling Ahead

After lagging behind most of the nation in economic growth through the early '90s, Maryland pulled ahead and outpaced national economic growth in the second half of the decade, according to a University of Baltimore study. New business starts, employment growth and venture capital invested in Maryland combined to keep the state's economy strong over the last five years, according to "Benchmarking Maryland's Business Climate and Socio-Economic Performance, 2001," produced by UB's Jacob France Center. Those strengths continue to five Maryland an edge during the current economic slowdown, the report concludes.

The study takes a comprehensive look at factors that influence business and economic growth in Maryland and compares the state to all 50 states and the District of Columbia in over 145 economic and social indicators. Maryland leads in several key indicators. The state was ranked:

* 21st nationally in total employment growth over the 1995-2000 period, up from 44th over the 1990-1995 period.
* 15th nationally in total employment growth over the 1999-2000 period.
* 17th nationally in new business starts per 1,000 workers in 1999.
* Third nationally in the number of SBIR awards per capita and sixth nationally in total research and development performed per capita.
* Maryland was ranked sixth nationally in the amount of venture capital managed by firms within the state and 10th nationally in the amount of venture capital invested within the state.

The report identified Maryland's chief economic development assets: highly developed transportation and telecommunications infrastructures, rich technology assets, and a well-educated and productive work force. Maryland ranked in the top 10 states nationally in both interstate and freeway miles.

Maryland is at the top of the information superhighway as well, with the 11th highest percentage of fiber optic cable relative to copper cable and third highest level of ISDN control channels per switched access line in the nation. The state ranks sixth for total research and development per capita, and second for both federally performed research and development per capita, and research and development performed by universities.

The report also identified the state's economic development weaknesses, including high real estate and labor costs, high percentage of union workers and per capita tax burden. Maryland ranks 39th nationally in total state and local taxes per capita and last regionally. Maryland's personal income taxes as a percentage of personal income and per capita are among the highest in the nation.

Maryland's labor costs exceed those of its key competitors, Virginia and North Carolina. The state's average hourly manufacturing wages are approximately five percent above the national average, and the state ranks 11th for highest average hourly manufacturing wage.

Ernst & Young Report Says NC Legislation Hinders Economic Development

Commissioned by North Carolina's Department of Commerce, an Ernst & Young report indicated that the state has fallen behind many states in the South in the use of tax incentives to attract industry. The report found that states in the South, specifically Alabama, Georgia, Kentucky, South Carolina and Tennessee consistently provide more overall tax breaks than North Carolina. Some Southern states can offer expanding or relocating industry 20-year tax exemptions. Currently, those tax breaks are unconstitutional in North Carolina.