Summer 2007

Around the South

QUIZ

How many of the South's nine foreign-owned automotive assembly plants that are currently producing vehicles (two new foreign assembly plants are being built in Georgia and Mississippi) are unionized? (a) 2 (b) 4 (c) 0 (d) 3

(Scroll down for answer)

Decision on Vaccine Plant Near

Apparently only two sites in the South remain on the short list of Solvay Pharmaceutical's new flu vaccine plant. Solvay officials continue to maintain that several states remain in the running, but reports gathered by SB&D indicate that a site in Birmingham, Ala., and one near Athens, Ga., are at the top of Solvay's site search list. The company plans to build a $300 million, 250-employee influenza vaccine plant and as of deadline for this edition, no decision on a site had been made. Solvay won a $298 million contract from the federal government to develop cell-based flu vaccines that could be produced in large quantities in the U.S. Solvay is based in Brussels and its U.S. headquarters is located in the Atlanta metro market of Marietta. For more information on the biotech industry in the South, go to www.BioIndustrySouth.com.

Georgia Wins Prestigious Honor

In the summer quarter, Georgia was presented with the Golden Shovel Award, the highest ranking given in Area Development magazine's annual ranking of economic development performance in the U.S. The award is based on job creation, new projects, corporate investment and the quality of jobs created, among other factors that involve the successful practice of economic development. Silver Shovel awards were given out to 10 other U.S. states and five of those were located in the South; Texas, Alabama, Missouri, Kentucky and Kansas.

West Virginia Gender Pay Gap Lowest in U.S.

Women still earn less than men, yet are the closest to reaching parity in West Virginia. A study done by the American Association of University Women found that even just one year after college graduation, women earn only 80 percent of what men do. Overall, that gap widens over time. The study also showed that the gap is lower in West Virginia than any other state in the U.S. Women in West Virginia, on average, earn 89 percent of what men do in the state.

Four Southern States Clearly Improving Performance so far this Year

Four Southern states are clearly having great years so far in 2007. Arkansas, Georgia, South Carolina and Mississippi have had their challenges over the last three or four years in landing large job and investment deals. As of the end of August however, our data clearly indicates that has not been the case in 2007. Note this issue's Relocations & Expansions section and last edition's R&E report. Arkansas, Georgia, South Carolina and Mississippi are all on huge rolls and the deals are flying in those four states. We can't remember a year that has been better for Arkansas. Little Rock has particularly been active with some massive job and investments deals announced in the spring and summer quarters. Georgia is coming back strong, or to a place where they should be in terms of economic development success and Mississippi is on a roll we've never seen before either. And in the case of South Carolina, they seem to be in a major comeback mode as well. All four states have underperformed to varying degrees from 2003-2006, or post recession, and it is great news to us that those states are enjoying tremendous success so far in 2007. In a word, they are "hot" right now. There are sections featuring Mississippi and South Carolina in this edition.

Six of Ten-Fastest Growing Cities are Located in the South

New information from the Census Bureau shows that six of the nation's fastest-growing cities with 100,000 in population or more are located in the South. Five of those are in Texas and Florida. The three Texas markets are all located in the Dallas-Fort Worth region and Cary, N.C., the eighth-fastest-growing U.S. market, is located in the Raleigh, N.C. metropolitan area.

Fastest-Growing U.S. Cities

* Population increase from July 1, 2005 to July 1, 2006. Source: U.S. Census Bureau

New Orleans' Population Loss Shocking

The same Census Bureau data used in the previous chart showed that the city of New Orleans lost 51 percent of its population between July 1, 2005 and July 1, 2006. Hurricane Katrina hit New Orleans on August 29, 2005.

CNBC: Four of the Top Five States for Business are in the South

CNBC recently ranked states in the U.S. that are best for business and four from the South made it into the top five. Virginia topped the ranking, followed by Texas, Utah, Georgia and North Carolina.

South Sweeps Work Force Training Top 10 Ranking

In the summer quarter, Expansion Management magazine published its annual ranking of the top state work force training programs in the U.S. and the magazine's Top 10 was made up of Southern states exclusively. Georgia was ranking No. 1 in work force training topping Alabama, which was ranked first last year. The rest of the top 10 included Alabama, Florida, South Carolina, Kentucky, North Carolina, Tennessee, Virginia, Maryland and Texas.

Tampa Bay's Medical Products Industry: A $3.4 Billion Annual Impact

Memphis and Tampa Bay are two of the South's best kept secrets when it comes to the medical products industry in the South. A recent study revealed that the medical products cluster located in the Tampa Bay region contributes a total direct economic output of $3.4 billion and employs over 12,000 workers. And like Memphis, the sector making the biggest contribution is the medical device segment. In Tampa Bay, medical device companies employ nearly 9,000 workers. The study also showed that Tampa Bay's employment in the sector makes up 26 percent of Florida's total employment in the medical products industry and 33 percent of the state's total employment in medical devices. Since 2004, total employment in medical products in Tampa Bay, a huge region that includes the cities of Tampa, St. Pete, Clearwater and Sarasota, among many others, has increased by 24 percent. For more information on the medical device industry in the South and biotech in general go to www.BioIndustrySouth.com.

Unions Try to Organize South's Auto Industry to No Avail

The UAW and the United Steelworkers keep coming up short time after time when trying to organize at automotive facilities in the Southern Automotive Corridor. Another try failed in the summer quarter at Recticel Interiors NA, a supplier to the Mercedes-Benz plant in Vance, Ala. Employees at Recticel voted 141 to 40 against the United Steelworker's attempt to organize there, according to information from the Birmingham office of the National Labor Relations Board. For more information on the South's automotive industry, go to www.SouthernAutoCorridor.com.

Native-American Business Center to Open in Pembroke, N.C.

The National Center for American Indian Enterprise Development is opening an office in Pembroke, N.C. The non-profit NCAIED provides technical assistance and consulting services to American Indian owned small businesses and tribal enterprise operations.

Editorial

If You Interview Me, Get it Right

By Michael C. Randle

Usually several daily newspaper reporters interview me weekly. I don't mind granting them the time. But when they don't write, with at least some accuracy, what I said to them or what I meant by my words, that upsets me. It upsets me even more when their inaccurate reporting upsets other people.

On or about July 16, I was called by a reporter from Mississippi. He asked me how many suppliers Mississippi should expect to land for the new Toyota plant being built near Tupelo. I told him (not in exact words because that's impossible to recall), "Expect five big, tier-one suppliers 'in the gate' (or on site) and about 30 to 40 supplying the plant within four or five years. I cannot tell you how many of those will locate in Mississippi, but the majority should locate in your state," I told the reporter.

The story ran on July 17 and the headline read, "State will get five big suppliers for Toyota." Now, let's look at that headline for a moment. I said to the reporter, "Five large, tier-one suppliers in the gate," or on site, not five total. His headline read so much different than what I said to him.

Even worse, I heard from contacts in Mississippi that a Jackson, Miss.-based television reporter picked up on the story and what I did not say and editorialized on it by telling viewers something to effect, "Is Gov. Barbour (Mississippi Gov. Haley Barbour) misleading us about Toyota?" Puuuuuleeeeeze.

Let's just set the record straight now. If you interview me, get it right. And let this editorial be a warning to all who interview me. If you cannot get my words straight, or even if your editors feel a need to sensationalize what I say, well, I buy ink by the barrel, too. I have refrained from identifying the reporter and the newspaper that screwed up my words so much. Next time this happens, I will.

mike@sb-d.com

Tennessee to Get U.S.-Funded Biofuel Research Center

The U.S. Energy Department announced in the summer quarter that one of three bioenergy research centers it is creating will be located in Tennessee. It will be led by the Oak Ridge National Laboratory, with participation by the Georgia Institute of Technology and Georgia and Tennessee universities. The other centers will be located in Madison, Wis., and Berkeley, Calif. The Energy Department will provide $25 million in funding for each center over the next five years.

Missouri Gov. Blunt Signs Job Creation Bill

In the 15 years we have covered states in the South, economic development in Missouri has never been better. Over 97,000 jobs have been created in Missouri since January of 2005 and SB&D considered naming Missouri "State of the Year" in our 2007 SB&D 100 ranking. In the late summer quarter, Missouri Gov. Matt Blunt signed House Bill I, an expansion of Blunt's Quality Jobs Program that was started in 2005. HB 1 allows for better healthcare for workers and raises the Enhanced Enterprise Zone and New Markets tax credits. Both programs are designed to create jobs in economically distressed areas of the state.

Editorial

Huge Accomplishment Realized in Martinsville-Henry County, Va.

For the first year in 10 years, the Martinsville-Henry County, Va., community has gained more jobs than it lost. According to Labor Market Statistics from the Virginia Employment Commission, the Martinsville area showed a net increase of 466 jobs in 2006 across all sectors.

Southern Business & Development has a long history with Martinsville-Henry County in that it has won "Small Market of the Year" three times over the last 14 years, or since the SB&D 100 was first published in 1994. That is more than any other small market in the South. Aiken, S.C. has taken the honor twice in the small market category and is the only other small market in the South that has been recognized more than once.

Yet, since there hasn't been a year during almost that entire period where Martinsville-Henry County, Va., netted an annual increase in job creation, that simply indicates clearly that the area turns lots of big deals, but loses many existing industries at the same time. It should be noted that the apparel, textile and wood products industries have a long history in the Martinsville region. Many of those companies have left the region, as they have throughout the South over the last decade or so.

Here's an interesting thing. We named Martinsville Small Market of the Year one year in the late 1990s the exact same week political officials there disbanded the economic development organization, the Patrick Henry EDC, and split economic development responsibilities to the city and the county. Today, the Martinsvillle-Henry County EDC represents both the city and county. Good move, one that was made three years ago.

Mark Heath, President and CEO of the Martinsville/Henry County EDC, said about the net increase in jobs in 2006, "Three years ago, when the EDC was formed, it adopted a holistic approach to economic development. This holistic approach, while very different than the traditional model, has allowed us to focus on job growth through assistance to existing industry, small and minority business development and tourism in addition to industrial and manufacturing recruitment. This approach is working. The leadership of this community is to be commended for their forward thinking and vision."

In 1996, Martinsville-Henry County showed an increase of 449 net jobs. To lose jobs every year since then, and then show a net gain in 2006, is a remarkable achievement for that Southwest Virginia rural region. You can read more about Martinsville-Henry County by turning to page 25.

Michael C. Randle
mike@sb-d.com

NBAF Facility Site Narrowed to Five Southern States

In the summer quarter, the U.S. Department of Homeland Security narrowed its site search to five states for its National Bio and Agro-Defense Facility (NBAF). Those states named by DHS are all in the South: Georgia, Kansas, Mississippi, North Carolina and Texas. Eighteen U.S. states were originally in the running for the facility, according to DHS officials. When built and in production, the NBAF would address the federal government's need for research and development space to meet threats from emerging disease pandemics and bio-and-agro-terrorism. The facility, which would encompass 500,000 square feet initially, will house about 500 workers. A decision on a site for the facility is expected in 2008. Federal Homeland Security officials were in North Carolina in mid-September to inspect a site The Tar Heel State is pitching. That site is a 4,000 acre tract located in Butner, N.C.

New Airport on Florida's Emerald Coast Gets Final Approval

It's not everyday that a major new airport in the South is built. In the summer quarter, the U.S. Army Corps of Engineers issued the final permit further clearing the way for construction to begin on the new Panama City-Bay County International Airport. Located in Northwest Florida, the new 100,000-square-foot facility will be the first airport in the U.S. to incorporate the security requirements resulting from 9/11. Situated on land donated by The St. Joe Company, the new airport will be developed in conjunction with a nature preserve that will include the largest expanse of undeveloped coastline in Florida. The airport is slated for completion in 2009.

Correction

Kansas Had a Much Better Year in 2006 than We Reported

Last edition's cover story, the 2007 SB&D 100, indicated that Kansas had a poor year in calendar year 2006. We reported, "After a banner year (in 2005), Kansas saw the bottom drop out from 135 points (in the 2006 SB&D 100) to a mere 55 points this year."

Apparently, that statement was not accurate. Not all of the deals turned by Kansas in calendar year 2006 that would have made the SB&D 100 were reported to us. Below is the corrected version of Kansas' economic development performance in calendar year 2006. The deals listed below boost Kansas' point total in the 2007 SB&D 100 to 115, which is an excellent year for The Sunflower State.

* In millions

QUIZ ANSWER

The answer is (d) 0. No foreign auto assembly plants are currently unionized in the South. However, the latest target for organization by the United Auto Workers' is the Honda plant in Lincoln, Ala. The UAW launched a campaign to organize workers at the Honda plant over the summer quarter. Honda officials spoke out against the union's campaign, saying unionization of the plant "would radically change" Honda's $1.5 billion, 4,500-employee auto works in Alabama. For more information on the South's automotive industry, go to www.SouthernAutoCorridor.com.