"We are also seeing movement of machining companies from the Great Lakes area to the Southeast," says Gardner's AMT colleague Pat McGibbon, vice president of research. "I wouldn't call it a migration — that is too strong a word, but they are looking to be near where manufacturing is growing, and that is the South." He says that manufacturing costs, while evening out a bit in recent years, remain lower in the South than in the Great Lakes. McGibbon ticks off a list of states — Oklahoma, Texas, Arkansas, North Carolina, South Carolina, Mississippi, Tennessee, Kentucky and Georgia — where the industry is expanding.
      Nevertheless, McGibbon sounds a note of caution to companies in search of precision machinists. The skilled labor pool remains in the Great Lakes area, he says. "Finding the right labor pool, particularly in the Southeast, could be a challenge for these companies. You might not want the people who used to work on the textile factory floor. Instead, you want the guy who knows how to operate and repair the machines — and these guys may be harder to find."
      But some companies that are expanding in the South have found welcoming communities and eager work forces, after years of downturns following the loss of other manufacturing jobs.
      North Carolina, hit hard by textile factory closures, put together a $2-million incentives package to attract Altec Industries to Burnsville, in the western part of the state. Altec will invest $7.5 million to renovate an abandoned textile factory for production of aerial lifts and truck mounted cranes. The incentives are part of North Carolina's Job Development Investment Grant initiative, established by Gov. Mike Easley in 2003 to attract projects that would not have gone to North Carolina otherwise.
      "Incentives were certainly a factor in the company's decision," according to company spokesman Mark Wegel, although not the primary factor. "What really drove the decision was that Burnsville has an outstanding geographical location for Altec, an excellent transportation system and most importantly, it is an area that has employees with a solid work ethic."
      Other companies have found Southern communities open for business. In Huntsville, Alabama, family-owned Brown Precision Inc. took advantage of the downturns to negotiate an attractive package that helped the company build a new facility, even though it, too, was experiencing some difficult times. The firm built a new 36,000-sq.-ft. (3,344-sq.-m.) facility in 2002 — not a great year for machine tool companies. Now, the company is expanding again, adding on to the new facility to create 50,000 sq. ft. (4,645 sq. m.) of manufacturing space to meet growing demand.
      Explains Greg Brown, the company's CFO, "It's like the principles you learn in 'Economics 101' — we expanded in a down economy and got over $4 million in incentives that included real estate and equipment." He credits the Huntsville Chamber of Commerce for helping negotiate the terms of the deal, which include a 10-year property tax abatement and a 20-year state tax abatement. Brown says such incentives are not typically associated with a small company like his — $5 million in revenues and 50 employees — but the company's timing meant something to a city in need of investment.