Mike Randle, Editor

A Letter to CEOs of Automakers and Their Suppliers

Your industry's leadership and ingenuity over the last 100 years has transformed the lifestyles of every American and almost all people throughout the world like few industries in history. For example, in 1900 the average American traveled about 1,200 miles in a lifetime. In comparison, my travels by car throughout the South over the last 10 years have taken me on dozens of trips that totaled 1,500 miles in one week.

Right after your industry was born, there were 8,000 cars registered in the U.S., almost all of which were owned by the rich. Today there are 500 million registered vehicles in the world, with nearly 200 million in the U.S.

All of you realize that in the long term your industry looks solid as gold. Why? As populations increase, more cars are sold. That's true with any product that is inherently needed. And in this day and age of the human condition, individual vehicles are still products that are essential to daily life. And then there's the potential market that's called China.

Experts have estimated that increased capacity over the next 20 years could total 45 million more vehicles than what can be produced today by existing assembly plants. That's a projected 200 new plants located throughout the world producing 225,000 vehicles a year. Two-hundred new automotive plants in 20 years? Wow! You folks have some work to do.

On the other hand, in the short term there's no question some of you are dealing with situations where plant closings are inevitable. But we also know that none of those plant closings will likely happen in the American South. No, if plants close they will be in New Jersey, Ohio, Michigan and Ontario. In fact, just in the last year there were eight expansions of your plants in the U.S. in markets outside the South and 16 expansions and three new assembly plants announced in the South over the last year. Those were the highlights of your industry from late 2001 to today. Lowlights will soon come. But, again, they won't be here in the American South.

As for the executives reading this who work for Ford, GM and DaimlerChrysler, you are dealing with a decreasing U.S. market share as foreign automakers enjoy a market share that's increasing in this country. I don't have to remind you that every major foreign-owned assembly plant announced in the U.S. in the last 10 years has been announced in the South. Not only that, many of your plants in Michigan are aging or obsolete. Heck, one even blew up just a few years ago. On top of that, the UAW contract is coming up for all of the "big three." That being the case, right now you are faced with an opportunity that can be wasted or an opportunity that can be seized. What are you going to do? Retool some of those plants in the Midwest or close them?

As for the executives reading this who work for Nissan, Mercedes, BMW, Honda, Hyundai and Toyota (as well as Mitsubishi, Kia, Daewoo, Volvo and VW, who have their site search teams in the South), you have already seized an opportunity by placing your major North American operations in the South. I know you are pleased with your decisions. Every one of you have either expanded your existing operations in the last 10 years or announced new ones in the South over the same period.

The point is, domestic carmakers are like sticks in the mud in the Midwest. You folks are working a losing model of business. Foreign automakers in the U.S. are working a winning model right here in the South.

The South offers all automakers a better work force choice. The South offers all automakers a more cost effective region in which to operate an assembly plant. The South offers better utility options (unless the feds changes the rules of the game). The South offers, generally, better incentives. And finally, the South offers automakers something they can't get anywhere else in the United States: state governments with an entrepreneurial spirit. One thing you must remember and remember it well: We invented the industry that is known as industrial recruitment. Unfortunately for the "big three," that invention wasn't sold on the market by Southern economic developers until after they chose Detroit as their home base.

In the next 20 years of this nation's automotive industry, we challenge the "big three" to rethink their business model (we know you already are). We invite you to look to a warmer business climate that your major competitors -- foreign automakers -- have already found. Fact is, as your plants in Michigan and Ohio become even more obsolete, we challenge you to look to the South. We also invite your UAW workers, many of which have been card-carrying members for 40 years or more, to relocate to the South if the assembly plant where they currently punch their time cards closes. We need their expertise.

The final point of our argument that the South will eventually unseat the Midwest as the center of the automotive universe centers around this: Four automakers -- GM, Ford, Honda and Toyota -- lost production for as many as three days as a result of the massive snowstorm that struck the North during the week of February 17. All of those plants that were closed due to weather were located outside the South except for two plants in Kentucky. And in 11 years, I have failed to convince Kentucky officials that they are indeed located in the South.