Top 10 Stories

By Mike Randle

1. The South's Surging Automotive Industry

No year since 1992 has any single industry sector chalked up as many as 85 significant deals in the South. But that's exactly what the automotive industry did in 2003. Not only were there 85 automotive deals that created at least 100 new jobs, there were over 150 more that generated less than 100 jobs.

It can be strongly argued that the automotive industry is and has been the only expanding industry in the U.S. since the beginning of the economic downturn in early 2001. But there's only one place in the U.S. where that expansion has taken place and that's the South. Other areas of the country, namely "Detroit," have seen their automotive sectors either decline or maintain current status.

In 2003, the Southern Automotive Corridor (www.SouthernAutoCorridor.com) widened by about 1,000 miles when Toyota chose San Antonio for its newest major assembly plant. While that might not mean much to you, it speaks volumes about where the Southern Auto Corridor is headed in the future. With Nissan opening its new plant north of Jackson, Miss., the latest from automakers clearly indicates the Southern Auto Corridor is jogging west.

It should be noted that Alabama was the clear winner in attracting the most automotive-related industries in the South in 2003. But virtually every Southern state got a taste of job generation by the automotive industry last year. For example, in 2003, the largest two automotive deals in Arkansas' history were turned. Georgia saw DaimlerChrysler do an about face on a new plant near Savannah, but the Peach State did well in 2003. The Carolinas saw some significant automotive deals in 2003 as did Virginia, West Virginia, Louisiana and Kentucky. Tennessee landed a Toyota engine plant last year and Nissan opened its huge assembly factory in Mississippi. Even Florida got in the act. And then there was Toyota shocking all experts by choosing San Antonio in 2003.

There is no question in our minds that the automotive industry's expansion in the Southern Automotive Corridor is the No. 1 economic development story in the South in 2003.

2. Major Headquarter Relocations Land in the South like Never Before

>From 1975 to 2002, only three Fortune 500 companies relocated their headquarters to cities in the South. In 2003, three Fortune 500 companies and many other major corporations moved their headquarters from outside the South to cities such as Nashville, Richmond, Jacksonville, Atlanta, Dallas and Charlotte.

Why was there such a rush by major corporations to move their headquarters to the South from outside the region in 2003? Take Philip Morris' move from New York City to Richmond, made in 2003, as an example. Officials with Philip Morris said that the headquarters move would cost the company about $120 million, but would save the company $60 million a year, not including incentives. Over 10 years, that's $600 million in savings.

3. Lost Jobs

Lost jobs are one of the biggest issues in this year's Presidential election. The South certainly wasn't immune from the pink slips. The South lost about 150,000 manufacturing jobs in 2003. But that wasn't the only sector where jobs were lost. The good news is about 120,000 more Southerners are employed in the region who were not employed at the end of 2002. Even more impressive, the South's labor force grew by about 550,000 workers in 2003.

4. Deregulation of the Utility Industry in the South Grounds to a Halt

After observing with great interest the California energy crisis followed by blackouts in the Midwest and Northeast in the summer of 2003, governors and legislators throughout the South either delayed or halted deregulating the energy industry. There were also several power plants scrapped in 2003. Today, full deregulation of the utility industry exists in only two Southern states: Texas and Virginia.

5. State Budget Deficits

This Top 10 story doesn't need much attention here. We all know what the economy of the last few years has done to state budgets. One thing it has done is force governors in the South to reexamine their states' tax codes. For many states in the South, more revenue is needed to provide even basic services. After all, the South is, by a large measure, the fastest growing region in the U.S. and has been for decades. And to deal with the growth, look for state tax codes to change. Many already have.

6. Jeb Bush Sticks His Neck Out for Scripps Institute

A few Southern governors have put their political careers on the line after spearheading huge economic development projects. Former Tennessee Gov. Lamar Alexander comes to mind. He brought in a massive Nissan plant in the early 1980s, certainly, at the time, a risky investment of state funds and efforts. In the early 1980s, no foreign automotive plants existed in the South and Japanese automakers were viewed as inferior compared to their domestic competitors. Today, foreign automakers have eight plants in the region and they no longer are viewed as inferior manufacturers of vehicles. Was Alexander's bet on Nissan a good one? Well, in the early 1980s, the automotive industry didn't exist for all practical purposes in Tennessee. Today, two assembly plants and over 1,000 automotive parts suppliers call the Volunteer State home.

Former Alabama Gov. Jim Folsom, Jr. certainly took intense heat in the national and international media in 1993 when he approved over a quarter-billion-dollars in incentives for a Mercedes-Benz plant. Skeptics claimed Folsom's and Alabama's deal with Mercedes was one of the biggest wastes of state tax dollars in industrial recruitment history. We've written about that deal many, many times. It's clear that Folsom was right and just about everyone else was wrong, considering the fact that Mercedes paved the way for Honda, Toyota and Hyundai and over 250 automotive suppliers to invest in Alabama in just 10 years.

Now we find Florida Gov. Jeb Bush dishing out $300 million in incentives to the Scripps Research Institute, a non-profit, California-based bioscience concern. The $300 million is in addition to some counties in the Sunshine State paying about $200 million for the project, most prominently Palm Beach County, where the facility is being built. In fact, Palm Beach County is paying for the construction of the 364,000-square-foot building. It's just a matter of time before we know if Bush will join Alexander and Folsom as Southern governors with vision.

7. Texas Instruments Deal in Richardson

In the mid-to-late 1990s, virtually every Southern state spent an extraordinary amount of money recruiting the semiconductor industry. Back then you would have thought that Florida's only target was semiconductors. Two semiconductor manufacturers announced plants in Virginia (only one was built) in the mid-1990s and Texas saw some expansion of its existing semiconductor base during that time. Regardless, the buzz surrounding the chip biz really never materialized in the South in the 1990s. But all apparently is not lost in that sector. Texas Instruments (TI) announced last year it would build a $3 billion chip plant in the Dallas/Fort Worth market of Richardson, Tex. The facility, which will house 1,000 workers, is the first new semiconductor plant announced in the South since 1996.

8. DaimlerChrysler Backs Out

In 2003, DaimlerChrysler (DC) backed out on its decision to build a van assembly plant in Pooler, Ga., a small town located in the Savannah metro. The deal would have meant much to the state of Georgia. It would have also meant a great deal to DaimlerChrysler's future, which, remains foggy.

DC made a huge mistake by publicly stating in any way shape or form that a plant would or even might be built in Georgia. Just the same, former Georgia Gov. Roy Barnes made a much greater mistake by publicly stating DC would build a plant in Georgia prior to the automaker's official announcement. Furthermore, current Georgia Gov. Sonny Perdue made a mistake by publicly stating the incentive deal prepared for DC was something the state of Georgia would never do again. For you folks in the automotive arena, there's one thing you can gain from the DC debacle: economic developers in the Peach State have learned full well from their mistakes surrounding the DaimlerChrysler deal.

9. Tort Reform Passes in Arkansas, Mississippi and Texas

We are really naive here are SB&D. We ask the question all the time, "Why don't all Southern states pass some sort of tort reform," even one that is vanilla in nature. After all, they will receive all sorts of positive press that will possibly alert prospective industry to consider locating in their states. Well, there is a strong element that tends to be against tort reform. I remember a local radio personality here in Birmingham say back in the mid-1980s, that with the current rate of college students wanting to become lawyers, "everyone in the U.S. will be a lawyer by 2125."

Apparently, the state governments of Arkansas, Mississippi and Texas went beyond the pressures of special interests in 2003. Each of those states made it easier for industry when it comes to the courtroom. They all passed tort reform legislation last year.

10. SouthernAutoCorridor.com Goes Live

Homers, that's what we are. But in a year somewhat void of big stories, we thought this was a one-time opportunity to stroke ourselves. After all, launching www.SouthernAutoCorridor.com was a big story for us. In fact, it almost killed our little staff. Yet, www.SouthernAutoCorridor.com is now on the World Wide Web and it's huge, it's interesting and it is the only source in existence exclusively profiling what we strongly believe will be the center of the automotive universe in the near future. If you are in the automotive industry and you're looking to gain a foothold in the Southern Auto Corridor, this site is necessary reading.