QUIZ

Which states in the South have higher high school graduate rates than the nation's average?
(scroll down for answer)

The Southern Automotive Corridor Takes a Giant Leap 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. The 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. Kentucky leads the South with 1.2 million cars produced in 2002 followed by Tennessee, Georgia, Texas, Virginia, Alabama, Louisiana and South Carolina.

Three Companies to Supply Parts to Kansas City GM Plant

Three automotive suppliers have announced plans to locate in the Kansas City area. All three will supply parts to the GM plant in Kansas City, Kan. that is being retooled to make the Chevrolet Malibu. Delphi Corp. is moving into the former Douglas Battery plant in North Kansas City. It already operates a battery plant in Olathe, Kan. Canada-based Progressive Moulded Products will manufacture dashboard components and consoles in a 60,000-square-foot building in St. Joseph, Mo.'s Mitchell Woods Business Park. And AZ Automotive Corp., a supplier based in Detroit, will supply suspension systems to the GM plant through a 75-employee facility in Lenaxa, Kan.

January 2003 Southern State Budget Deficits
(In millions)

Alabama $199
Arkansas 0
Florida 0
Georgia $620
Kansas $150
Kentucky $106
Louisiana $19
Maryland $414
Mississippi $97
Missouri 0
North Carolina 0
Oklahoma $292
South Carolina $348
Tennessee 0
Texas $1,796
Virginia $950
West Virginia $20

Source: National Conference of State Legislatures

Editorial

A Piece on War and Money

To Improve the Economy, the Bush Administration Must Assist the States

By Mike Randle

As of this writing -- February 25, 2003 -- it looks as if President Bush's tax cut and second economic stimulus plan in two years will die in Washington if indeed it even gets there in its present form. It should be noted that the Congress that will slam Bush's original plan, if it is voted on, is one that is controlled by the White House's own party.

FRB Chairman Greenspan and even a select few of Bush's fellow Republicans spoke out last week against this latest attempt to jumpstart the economy, citing the likelihood that if implemented the federal deficit will continue to soar to very dangerous levels. That's strike one on what are the two most important items on our President's agenda this month and essentially since 9/11.

Regarding Bush's second item on his agenda since shortly after 9/11: I'm not going to go on a tangent and argue the positives or negatives of spending billions on a war with a dictator who is essentially neutralized (Note that I didn't mention war with Iraq. No, this is war with Saddam). My simple opinion is the U.S. can spend its money more wisely, like pouring money to the states at a critical time.

Yes, there are bad dudes out there (no dudettes that I can think of), some of whom are truly bad to the bone. Laden comes to mind. Hussein does not at this time. He already had his 15 months of bad dude fame. That was in 1991 and 1992. What scares me most is a desperate third world Asian nation that's broke yet has the reported capability of selling nukes to bad to the bone dudes. My second fear is the creation of a new crop of religious fanatics who will become bad to the bone as a result of a U.S. invasion of Iraq.

Also last week we saw millions throughout the world protest the prospect of our country invading Iraq. What were the central motivations behind those protests? People throughout the world know that historically, the U.S. is not an aggressive nation militarily. No, we must have a prime mover for our military aggressions and rightly so. After all, we are the baddest dudes and dudettes on the planet. We can't go around spanking nations for little reason. That's what bullies do.

But we are aggressive in other ways. What comes to mind first and in the minds of most people in the world is our incredibly unique and aggressive ability to profit and make money, an aggression I support wholeheartedly. It's called capitalism. And most folks outside the U.S. who can somehow equipoise their religious beliefs and a desire for a larger bank account want a piece of it.

But in the case of an Iraq invasion, more folks than not see the U.S. in a different light than at any time in history. They see the Bush and Hussein war as bully vs. dummy, bully vs. madman, dummy vs. dummy, Texas oil vs. Iraqi oil, Christians and Jews vs. Islamics or, for the most astute, "he tried to kill my dad" vs. "damn, I wish I didn't try to kill his dad."

All of those potential descriptions are classic examples of the absurdity of the human condition. Unfortunately, these humans run countries. Strike No. 2 for Bush, unless the U.S. can absolutely show a 9/11 link to Hussein to the people of America and the world. By the time this article runs, however, there just might be a link found. But if there's not, let's bring back those schoolhouse "weapons of mass destruction" (arrrrggghhh) drills I went through in 1962 while I was in the second grade.

The Economy

What the Bush administration needs to do to avoid strike three is to continue to enhance security concerns in the U.S. and with the rest of the free world, destroy the business of terrorism one terrorist at a time. But if Bush wants to get reelected, which would be the ultimate strike three if he is not, he needs to address this nation's economy. Voters, as said time and time again, vote with their wallets. And to jumpstart the economy, the economic health of our states should be the route to take, not tax cuts.

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). In fact, 23 of 50 states raised taxes last year and most of those increases were regressive. These states will not only raise taxes again on their citizens this year, 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.

If you recall, many states lowered taxes when budgets were flush in the 1990s. That is when you lower taxes, when you don't need the money. When money is needed, like today, taxes are raised. But is the money really needed? States are in worse financial shape today than at any time since the Great Depression. So you tell me. Yet, Bush wants to lower taxes when his own government is not in any better shape than the states. It doesn't make sense. I say get the economy going then lower taxes.

We've written it before and we'll write it again; 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 the President really wants to stimulate the economy, he should order the Treasury to 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 in the economic development arena 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.

It's estimated that a war on Iraq will cost about the same as the total deficits shown by states this year, or about $60 billion. And at this time, late February, Bush apparently has made the choice to spend $60 billion on a war with Iraq because at the winter meeting of the National Governors Association, he told those in attendance that "You're on your own" and "We've got an issue with our own budget." What he is going to say after the first state files for bankruptcy?

Ford to Upgrade Kansas City Area Plant

Once rumored for closure, Ford Motor Co.'s Claycomo, Mo. assembly plant is being retooled in order to build multiple car models. Ford has announced it plans to upgrade all of its North American assembly plants over the next 10 years. Ford currently operates 21 assembly plants in the U.S. The Claycomo plant will eventually be capable of manufacturing four different models once retooling is complete. The Kansas City area plant houses over 5,000 employees and produces a Mazda SUV model as well as F-150 pickup trucks.

Rumored to Close, GM Pumps $150M into Atlanta Area Plant

For years the rumors that the Doraville, Ga. GM assembly plant will close have been out there. Apparently the rumors aren't true because in the winter quarter GM officials announced they were spending $150 million on the facility to retool it for the production of a new generation of minivans. The minivans will be sold under the Chevrolet, Pontiac, Buick and Saturn nameplates. No new jobs are expected to be created, however the company announced all 3,600 positions will be maintained.

South Dominates U.S. Housing Starts

In the fourth quarter of 2002 there were 5,242,000 single and multi-housing starts. Of those 5.24 million starts, over 44 percent were found in the South. The South led all regions with 2.3 million housing starts followed by the West (1.39M), Midwest (1.1M) and Northeast (456,000).

Rubbermaid Moving Headquarters to Atlanta

Newell Rubbermaid, a Fortune 500 company with 48,000 employees, is moving its world headquarters from Freeport, Ill., to the Atlanta area. The company employs about 350 at its current headquarter location. Newell Rubbermaid manufactures Sharpie pens, trashcans, car seats and a variety of other products. The company is expected to build a new 300,000-square-foot custom facility north of Atlanta near Ga. 400. Newell is the first Fortune 500 firm to relocate its headquarters to Atlanta since UPS moved its headquarters to the Southern mega-market from Connecticut in 1991. The new HQ now gives Atlanta 13 Fortune 500 headquarters, more than Chicago and San Francisco and behind only Houston (20) and New York (40).

Economic Segregation Higher in the North

A year ago, shortly after the 2002 Martin Luther King holiday, we reported to you that African-American poverty levels were lower in the South than in the Northeast and Midwest for the first time in history. We came up with these numbers: African-American poverty levels in the Northeast were at 22.5 percent; Midwest 24.4 percent; South 21.4 percent. A study recently completed by American City Business Journals supports our claim. The study showed that income gaps between whites and African-Americans is wider in the Northeast and Midwest than in the South. In fact, the ACBJ study indicated that 15 of the 20 metropolitan areas with the worst racial income disparities were located in the Northeast and Midwest, with Milwaukee and Buffalo topping the list. The study showed that for every $1,000 earned by whites in Milwaukee, $494 is earned by blacks.

Big Deals Still Floating in a Slow Economy

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 $50 million shipyard that could employ as many as 3,000 workers. Bollinger/Incat USA has already inspected sites in Alabama, Florida, Mississippi, Texas and Louisiana for the large project. Also, Toyota isn't the only automaker that has searched sites in the South recently. Reliable sources tell us there are two other automakers looking at sites in the South. There is the possibility the South could garner two new engine plants as well. We've also heard of a semiconductor facility out there as well as a large aerospace projects.

QUIZ ANSWER

Which states in the South have higher high school grad rates than the nation's average? Kansas (88.1%); Maryland (85.7%); Missouri (86.6%); Oklahoma (86.1%); and Virginia (86.6%). The national average is 84.1%.

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.

Arkansas Named No. 1 Magnet State

According to a study made by Allied Van Lines, Arkansas attracted the largest percentage of incoming moves in 2002 of any state in the U.S. Allied provides the annual study of "magnet" states, or those having a minimum of 55 percent of its total interstate relocations moving into the state. Arkansas' percentage of inbound moves was 71.2 percent, just ahead of last year's winner Vermont with 68.7 percent. Tracking more than 100,000 relocations in 2002, the Allied Van Lines Magnet States Report provides insights on the nation's moving trends and relocation patterns.

Oklahoma Adopts Law to Open High-Speed Networks

Oklahoma legislators have approved a bill that will allow companies to build high-speed Internet networks without state oversight. The day after the broadband bill passed, SBC Communications announced it would spend $30 million to construct high-speed Internet access throughout rural Oklahoma. SBC also announced it would build an operations center in Enid, Okla., this year that will employ about 500 people.

Texas Governor Tells State Agencies to Cut $700M

In January, Texas Gov. Rick Perry ordered all state agencies to cut spending by at least seven percent in fiscal year 2003. If done, it would be a $700 million cut in services supplied by the state of Texas. Foreign and out-of-state travel by state employees is being eliminated unless it's for legal obligations and consultant and professional services contracts have been cancelled. Texas is facing the possibility of a $12 billion budget deficit in 2004-2005 in addition to sanctions by the EPA unless its air quality is not improved.

Missouri Unemployment Insurance Trust Fund Will be Insolvent by March

Missouri's trust fund that pays unemployment checks will be insolvent by March, it's been reported. The state will have to borrow up to $140 million from the federal government to remain solvent after March. On average, Missouri pays out $42 million a month to the state's unemployed. Last March, Missouri received a $161 million disbursement from federal unemployment tax reserves for the trust fund. Texas and New York are having similar problems with their unemployment trust funds: too much going out and not enough coming in.

Maryland Democrats Want Homeland Security HQ

Maryland's Democratic congressional delegation has said it wants new Republican Gov. Robert Ehrlich to persuade the Bush administration to locate the headquarters of the new Department of Homeland Security department in Maryland. The Bush administration is currently site searching for a permanent home for the Department. It is estimated that the headquarters would need up to 300,000 square feet of space. The new home of the Department is expected to see thousands of new jobs spin-off from the deal. Others in the running include sites in Northern Virginia and D.C.

No Out-Migration in Washington D.C.

Many real estate experts predicted companies and some government agencies would leave the District of Columbia in droves after 9/11. If anything, the opposite has occurred. A report by Cushman & Wakefield shows that downtown Washington D.C. now has the lowest vacancy rate of any major market in the country at 7.9 percent. Ironically, Manhattan's vacancy of 11.1 percent is the second lowest in the U.S. The largest vacancy rates currently are found in the Silicon Valley (29%) and downtown Dallas (28%).

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.

DaimlerChrysler Officials Finally Confirm New Georgia Facility

In the fall quarter, Georgia economic development 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 surrounding the world economic and political outlook."

Austin Named No. 1 Economy

For the fourth year in a row, Austin, Tex., has been named the city with the nation's No. 1 economy by Policom Corp. The Jupiter, Fla.-based research firm studies the economic strength of U.S. cities including earnings, employment rates, economic diversity and mass layoffs. Much of the information is gathered from data provided by the U.S. Bureau of Economic Analysis. Other Southern markets making Policom's top 10 include Atlanta (No. 3), Dallas (No. 5) and Raleigh-Durham-Chapel Hill (No. 6).

Georgia Named "Sweetest Spot" for Development

In an annual poll, Plants, Sites & Parks magazine has named Georgia the most popular state in the U.S. among its readers. The poll asked readers what states would they consider for expansions based on certain criteria. Georgia came out first, followed by North Carolina and Texas. In fact, the South dominated the annual poll with Tennessee (No. 5), Virginia (No. 6) and South Carolina (No. 9) all making PS&P's top 10.

Jacksonville Named "Hottest City"

Expansion Management magazine has chosen Jacksonville, Fla., as the nation's "hottest city" for corporate expansion and relocation. It's the third such award for Jacksonville since the magazine began publishing its "hottest city" survey five years ago. Two other Southern markets made Expansion Management's top five hottest cities. They were Atlanta and Greensboro/Winston-Salem/High Point, N.C.

Charlotte Increasing Incentives

The city of Charlotte is proposing cash incentives for companies that invest in the city and create jobs. The increased incentives are designed to garner industry in the inner city and along transit and light-rail corridors. The incentives are available to existing and new industry

North Carolina's Furniture Industry Evolving

The Tar Heel State as well as other states in the South has been hit hard by furniture industry closures. The simple fact that most furniture can be made cheaper overseas, particularly in Asia, has had a detrimental effect on many Southern state economies. But all is not lost in the South's furniture sector. What's been occurring along with furniture manufacturers moving to Asia is a larger distribution presence, especially in the Piedmont Triad region of North Carolina, home of the South's largest concentration of furniture manufacturers. In the past couple of years a trend of much larger distribution centers built for the furniture industry has developed. Last year, Universal Furniture announced plans for a 345,000-square-foot distribution center in High Point and the Powell Co. leased a 450,000-square-foot building for logistics in Greensboro. And Legacy Classic Furniture, a Guilford County company is planning a distribution center in Whitsett, N.C. that could top out at 500,000 square feet. What's occurring is furniture manufacturing is decreasing, while furniture distribution is increasing in North Carolina.

Mississippi Passes Tort Reform Bill

More than 80 days into an extended special session, Mississippi legislators finally agreed on liability limits and passed a business liability tort reform bill in late November. The bill caps punitive damage awards, shelters retailers in lawsuits over flaws in manufacturing from products they sell and shifts financial responsibility to multiple defendants as opposed to one or two in certain cases.

Arkansas Tort Reform Passes House

The "Civil Justice Reform Act of 2003," Arkansas' tort reform bill, passed in the Arkansas House of Representatives on February 6. The bill would make a number of significant changes in the civil justice system in the state, including capping punitive damages when no intent to harm is proven at $500,000 and eliminating joint-and-several liability, which makes all defendants equally responsible for paying damages regardless of individual blame.

Atlanta and Austin Top Frequent Travelers

Scarborough Research, a New York-based firm, found that adults in Austin, Tex., and Atlanta, Ga., are home to the most frequent domestic travelers. The research firm looked at 74 major markets in the country in its study. Twenty-eight percent of adults in Atlanta and Austin took at least five overnight business or personal trips within the last year. Dallas, Charlotte and Mobile, Ala., rounded out the top five frequent traveling cities.

Tennessee Most "Economically Free" State in South

A study done by the National Center for Policy Analysis shows that Tennessee has the least tax burden and more of a limited government than any state in the South. The study measured "economic freedom" in all 50 states. Other Southern states that made the top 10 include Georgia and Missouri.

New Tennessee Gov. Passes on Salary

New Tennessee Gov. Phil Bredesen said in January he could not, in "good conscience," accept his annual salary when his state is facing substantial budget challenges and the layoffs of hundreds of state employees. Tennessee is facing a $322 million budget deficit this year and as much as $500 million next year.

Charleston Named Best-Mannered City

For the ninth time in 26 years, Charleston, S.C. has been named the best mannered city in America by etiquette guru Marjabelle Young Stewart. The survey is based on the opinions of travelers.

National Institute of Aerospace Unveils Location Plans in Hampton, Virginia

The Board of Directors of the National Institute of Aerospace (NIA) has approved a plan to move into a facility in a new high-tech research campus in Hampton Roads Center North Park in Hampton. Last fall, NASA's Langley Research Center teamed with the National Institute of Aerospace Associates (NIAA), a non-profit corporation, to create the world-class institute to conduct research, develop new technologies for the nation and help educate and inspire the next generation of scientists and engineers. Keeping the institute near Langley helps facilitate the Institute's involvement in agency sponsored research programs and foster collaboration with NASA.

Semiconductor Recovery

Not since 1996 has a new semiconductor plant been built in the South and the region saw but one expansion of a semiconductor facility in 2002. Yet, growth in the overall semiconductor industry is expected to top 20 percent this year after essentially no growth over the last three years. A report by San Jose-based Semiconductor Industry Association said that new chip sales will be driven by the need to replace old equipment and the development of faster and more energy-efficient chips.