Preview of the Summer Edition's SB&D 100

The South's Biggest Deals - 2000

It was bound to happen and it did!

By Mike Randle

After studying the largest corporate and industrial deals announced during the year 2000 in the American South, one can surmize that it wasn't that interesting of a year after all. On the other hand, one can determine that last year was a hell of a year, maybe the best for some time to come. That alone makes 2000 pretty interesting, doesn't it? Yet, what might make 2000 somewhat uninteresting centers around the fact that whopper deals came from one industrial sector that was expected to produce. The automotive sector ruled the American South in 2000. Duhhhhhh! It has ruled most years in the South since economic development officials laid the groundwork some 25 years ago.

What was interesting about this year's biggest deals centers around two items: (1) the semiconductor industry, a prize apparently sought by most states in the South equally as much as Hernando de Soto sought the Fountain of Youth while winding through the region, showed some spunk by placing three deals on the list of the South's biggest and most important corporate deals. The other interesting item (2) wasn't the fact that the automotive industry dominated the top deal list, but that the South's automotive corridor jogged about 175 miles west.

Nissan chose a site a few miles north of Jackson, Miss., for what will be one of the largest automotive plants announced in U.S. history. The $1 billion facility redefines the South's automotive boundaries. Used to be, the center of the South's Automotive Corridor was between Interstates 65 and 85. Add I-55 to that mix now. Suppliers will be spreading to new territories not seen before in the South prior to Nissan's Mississippi plant announcement.

Nissan, the foremost company (outside of FedEx) that has helped transform Tennessee's economy over the course of the last 15 years into a major international player (there are hundreds of Nissan suppliers operating in the Volunteer State), has now turned to another Southern state for partnership. That's good for Mississippi. In fact, the Japanese automaker's history in Tennessee is the primary reason behind our choice of Nissan's new $900 million, 4,000-employee plant as "Deal of the Year" in the South for 2000.

Much of the credit should go to Mississippi officials, not only current Gov. Musgrove's administration but to the eight years Kirk Fordice and Jimmy Heidel ran economic development in the state. I recall visiting Mississippi in the very early 1990s, prior to gaming in that state. I remember visiting Mike Olivier, who heads up the Harrison County Development Commission in Gulfport. At the time, I asked Mike what industries he was targeting for his county. The response I recieved was marine fabrication, marine this and marine that as well as seafood processors. I drove away from Mike's office with a somewhat negative view of the area he serves.

To Olivier's credit, as well as officials from the entire state, the area called Mississippi Beach is quite different than it was in 1992. To give you an idea how different, Olivier called a couple year's ago and asked me if I knew anyone who developed skeet shooting ranges. Apparently he was on a mission to help one of the swanky casinos that have spent billions (that's with a "b") in his county to get one built for its clientele. The Mississippi Beach region may indeed be the best example of a rags to riches story as there has ever been in the South.

Yet, while gaming changed Mississippi forever financially, it wasn't enough for some economic development practitioners in the Magnolia State. Big deals in the South create as much envy among neighboring states as an arrogant, rude brother-in-law winning the lottery. Mississippi officials, as well as Georgia and North Carolina officials, have been green-faced for years over the media fuss carried about by automotive deals turned in recent years by Alabama (Honda and Mercedes). North Carolina was particularly upset about the Mercedes deal. I heard Georgia Gov. Roy Barnes broke a few things while on a plane when he read that Honda had chosen Alabama. I wonder what he broke when he heard Nissan chose Mississippi? Yet, Barnes' anger is sometimes what it takes to become determined enough to prepare your state for a large automotive deal. You must be determined when it comes to turning the deal of the year, and Mississippi officials became determined shortly after Mercedes chose Alabama in 1993.

Of the South's top 10 deals to occur in 2000, five were automotive plants. That's a significant message to leaders of the automotive industry that the South is the hottest region in the U.S. for automotive manufacturers and suppliers.
Four of the South's top 10 corporate announcements were computer related; three microchip/semiconductor deals and one computer assembly project. The last, and the one creating the most jobs, was a huge financial services company expansion.

Virginia and Tennessee captured the most top deals with three each, and one each went to Alabama, Mississippi, South Carolina and Texas.

Compared to the top deals announced in calendar year 1999, the 2000 list makes up a better crop. New jobs created by 1999's top 10 totaled 16,347. The biggest and best 10 deals turned in Y2K created 20,990 new jobs. There was also a billion dollars (that's with a "b") more spent by 2000's top corporate dealmakers when compared to 1999. In 1999, $4.163 billion was invested by the top 10 with one not reporting. This year's top 10 spent $5.115 billion with two not reporting (Sanmina and Hewlett-Packard/Celestica).

Just missing this year's top 10 list was Black & Decker (1,600 jobs, investment not reported), a large expansion in McAllen, Tex., and another Capital One deal (1,000 jobs and $150 million in investment) in Fairfax, Va. Also, special recognition must go out to the Pearl River Resort announcement (2,000 jobs, $750 million in investment) in Philadelphia, Miss. While the Silver Star employs thousands, there, that region of the state needs more new jobs. They will get them with this new casino and hotel development. Also, it should be noted that Saturn expanded its plant by the tune of $1 billion. No new jobs were created, however, that announcement further confirms the automotive industry's future and faith in the American South.

A much more comprehensive look at the South's job-making and investment performance in calendar year 2000 will be published in the summer edition. It's the ninth annual SB&D 100. The "100" will not only profile the region's top 100 corporate deals, both on the investment and job side, it will also focus on several hundred more that didn't make the list. Also, the annual awarding of top state, mega-market, major market, mid-market and small market will be included, as always. And, as always, our top 15 economic development groups and top privately and publically-owned sites for 2000 will be featured. We've added something new in this year's SB&D 100. We will be recognizing the South's top 10 corporate citizens for the year.

You can e-mail Mike Randle regarding this article at mike@sb-d.com