Japanese JV Wytheville Technologies has found Virginia hospitable to an expansion that will double employment at this steering component plant in Wythe County.

South In the Catbird Seat

Despite the northern upgrades, the U.S. South continues to be the OEM draw for automotive companies from every nation. The seven assembly plants to strike U.S. ground since 1995 have all been in the South, and as of fall 2003, a full 15 automotive OEMs operated in the U.S. Southeast. And the landing of two recent plants in Arkansas (DENSO, investing $35 million in Osceola; and Sakae Riken Kogyo Co., investing in Wynne), along with the Toyota San Antonio pick, show that the industry's footprint in the South now is cutting a wider swath.
        Nissan's Emil Hassan, senior vice president for North American manufacturing, purchasing, quality and logistics, predicts that by the end of the decade, the number of North American vehicles emanating from a Southern base of production will go from one in four to one in three. So the critical mass of operations has reached the point where technical centers in the region are no longer a side issue, but front and center.

        That's part of the dynamics driving projects on both the government and corporate sides, from Tennessee's revamp of training programs to Toyota's $15.6-million investment in its quality and production engineering lab at its Erlanger, Ky., headquarters. Ed Castile, director of Alabama Industrial Development Training, told the 2003 SEDC audience that it's close to crisis time.
        "The underemployed, thank goodness, are saving our bacon," he said. "We're looking for about 5,000 people each at Mercedes, Honda and Hyundai. And with the other projects, we're looking at 33,000 new jobs by 2005. We can do it. The issue is what happens in 2007-2008, when all those people who left their current jobs [have taken new jobs] and we reach the bottom of that bucket. It's not been a hot issue yet, but it's coming."
        Gary Demasi, a site selection consultant with the Atlanta office of Deloitte & Touche, reiterated the issue's importance within the framework of understanding a company's operational and skill set needs: "A lot of communities are essentially almost agricultural regions, and it's not good enough to expect them to transfer to technical jobs," he said. "Training can't be emphasized enough. It's also very important to look at the [K-12] school system."
        In Tennessee, similar automotive good news – a $250-million, 1,500-job expansion at two Nissan plants; the major new 200-job engine block plant for Toyota subsidiary Bodine Aluminum in Jackson – has been tempered by the recognized need to bring training up to par in order to attract higher-level jobs. Nissan's Emil Hassan says there is already a good start, but more can be done.
        "We don't get enough credit for how many high-level jobs we have in these plants," he told the SEDC audience. "We have about 400 engineering and technical people there. We have all of the purchasing for all of North America in Smyrna. So what do you call that? What is lacking is some infrastructure, creating the technical know-how among the population for future engineers. You can build a building, but you have to fill it. We have 800 R&D employees in Detroit – not because I wanted it there. Could we have hired 400 in Tennessee then? No."
        Hassan and others see universities and community colleges as the logical partners in this effort.
        "The universities still don't have this in place," he said about the South in general, but was quick to single out Mississippi for its R&D ambitions. "Already, across the street from our plant in Mississippi, there is a huge research center being built by Mississippi State University. In some other states, what have you done to create that kind of infrastructure? I dare say not much." He also acknowledged that Mississippians were "tougher than I thought" when it came to negotiations.
        As if in response to Hassan's point, the Birmingham, Ala.-based Southern Research Institute established in September 2003 a new automotive research division, designed to reach into more than one industry's R&D base.
        "This new capacity at Southern Research not only serves as a critical resource in support of automotive manufacturing, but given the organization's track record in composite materials and aerospace engineering, I also see them helping to develop new advanced technologies," said Bernard J. Schroer, Ph.D., executive director of the Alabama Automotive Manufacturers Association, and associate vice president for research at the University of Alabama in Huntsville.
        Other practical matters are getting attention too. A total of $5 million in grants from the U.S. Dept. of Commerce Economic Development Administration went to various Alabama municipalities in October 2003 to help with sewage and treatment plants serving Hyundai and its supplier base.
        In his SEDC speech, Hassan noted yet another practical matter where the North holds an apparent advantage: tools and the people who work on them.
        "We can't find people who can tear down a robot and rebuild it for us," he told his squirming Southern audience. "We started our own apprentice program. But how many people can afford that? Every time they have to rework a tool for us, they have to ship it up to Michigan, Ohio or Indiana. If that tool is dropped or cracked, you've just lost it.
        "I always worry," he added. "Those people know where this [tool] is going back to, and believe me, they don't give us top preference."
        Memphis-based site selection consultant Mike Mullis believes that those other parts of the South that are lagging will take the cue and get things moving.
        "I don't find that development organizations collaborate, but here they do," he says. "Glenn Cornell in Georgia, Bob Faith in South Carolina, will meet with [Tennessee Commissioner of Economic and Community Development] Matt Kisber. Matt will meet with the head of the Alabama Development Office. There is a lot of sharing of this knowledge, because the stronger all of these states are, the more activity will be generated."