A    S I T E    S E L E C T I O N    S P E C I A L    F E A T U R E    F R O M    S E P T E M B E R    2 0 0 0

---

A Record-Setting Year

For Tennessee, 1999 was a record-setting year with $6 billion in new investment, up from $5 billion in 1998, in part because of its workforce and training programs. "Tennessee is blessed with the perfect location for manufacturing and distribution," says Baxter. "But that advantage means little without an investment in workforce and infrastructure. Tennessee has earned a reputation for an excellent workforce and a strong commitment to training programs, customized to industry needs."

SubmitOrder.com picks Memphis for distribution center

SubmitOrder.com, a leading provider of Internet e-fulfillment services to e-commerce companies, plans to create more than 950 new jobs over the next three years in its new Memphis distribution center. "We were looking in the Midwest for existing facilities, since we didn't have time to build new ones," says JT Kreager, president of the Columbus, Ohio company, which was founded in 1999. "We were impressed with the local demographics and employer base in Memphis," Kreager says. "Other advantages were the fact that fiber cables were already there, and having the FedEx hub was a benefit for us." SubmitOrder.com took more than 629,000 sq. ft. (58,400 sq. m.) of new distribution space in southeast Memphis for daily operations, human resource staff and information technology professionals. Local governing bodies have granted SubmitOrder.com a 15-year freeze on real estate taxes and personal property taxes. The company's services include e-fulfillment strategic planning and integration, distribution, customer response and business support. SubmitOrder.com's clients include market leaders in apparel, sporting goods, toys and children's educational materials, consumer electronics, health and beauty aids, home furnishings and accessories, leather apparel and accessories and computer products. HP brings tech jobs to Middle Tennessee Hewlett-Packard will relocate several of its manufacturing, distribution and returns-processing activities from the West Coast to LaVergne, bringing 1,500 technology jobs to Middle Tennessee. "Hewlett-Packard is a nationally respected company and a leader in the high technology field," says Gov. Don Sundquist. "HP will be a valued partner in the continued development of the high technology industry throughout our state." HP announced in April it has selected Ozburn-Hessey's Mid-South Logistec Center to serve as the newest North American manufacturing and distribution hub location for HP business PCs, HP NetServer systems and select HP Information Storage products. At the new LaVergne campus, a wide range of HP business activities will be performed by manufacturing and distribution partners, Celestica and Irish Express, to create total, integrated solutions for HP customers. The HP supply chain operation in LaVergne is expected to create a wide range of jobs from distribution to engineering and management positions. Based in Palo-Alto, Calif., HP has worldwide operations in more than 120 countries.

A new program called Tennessee Job Skills appropriates money from the unemployment compensation trust fund to train Tennessee residents "up the technology ladder" to higher-skill jobs, Baxter says. A network of Tennessee Technical Centers and community colleges work closely with industry to design training programs.

Other Tennessee assets include abundant water and natural gas resources, and low-cost power provided by the Tennessee Valley Authority (TVA), which serves the entire state through a network of 160 distributors. In addition, Tennessee's fiber-optic network is among the most advanced in the nation.

Tennessee is within one day's delivery of 76 percent of the nation's markets, and 50 percent of the U.S. population lives within 600 miles of Nashville. As a result, distribution companies -- particularly those involved in e-commerce -- have flocked to Tennessee. FedEx is the state's largest private employer, and the state's airfreight capabilities, railroad lines, expressways and access to the nation's largest inland waterway system make Tennessee a leader in multimodal transportation.

"We have found that logistical cost is a huge factor to most companies today," Baxter says. "We can make the case their logistical costs won't be lower anywhere in the country than in Tennessee. That's a big underlying incentive."

Tennessee's business climate is also increasingly international. Export sales in 1999 passed the $9 billion mark. From 1989 to 1999, Tennessee ranked 10th in international investment with 106 projects, according to Conway Data's New Plant Database.

Much of the state's growth in recent years has been in manufacturing, supported by the Tennessee Valley Industrial Development Assoc. in Nashville. Tennessee now has 6,400 manufacturers who employ 20 percent of all workers in the state.

One target industry is biotechnology, which is fostered by the Tennessee Biotechnology Assoc. (TBA). "Tennessee has research capabilities, health care services and private industries that include both pharmaceuticals and biotechnology start-ups," says Joe Gregory, the TBA's first chairman. He also is vice chairman of King Pharmaceuticals in Bristol, which produces influenza vaccine.

The TBA's programs are supported by the Tennessee Technology Development Corp., a statewide initiative designed to help create new businesses from the many scientific discoveries in the state. "Biotechnology is an area that's growing rapidly nationwide, and Tennessee has a lead part to play. It's an industry that will be important to Tennessee's future," says Lee Martin, executive director of TTDC.

Tennessee also is recruiting new plastics, rubber, chemicals and automotive companies to strengthen these industry clusters. Major employers include Bridgestone/Firestone, Goodyear Tire & Rubber Co. (rubber), Nissan and Saturn (automotive) and Eastman Chemical. "The growth of these industries has given many suppliers a strong reason to expand here," says Baxter.

Service-sector employment also continues to expand, and such retailers as Service Merchandise, AutoZone, Dollar General, and Goody's have located their headquarters in Tennessee. The state's entertainment, tourism, and hospitality industries are also thriving. Says Baxter, "We have seen five record years of private capital investment, and we're on track to set a sixth record this year."