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

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.