Monday, November 17, 2008

Auto manufacturing in the South remains strong

From what you hear in the press, you'd think automobile manufacturing was dying in the U.S. However, only the traditional Detroit automakers are in trouble. The foreign-owned auto manufacturing plants in the South are still going strong.
Activity in the Southern Automotive Corridor was surprisingly strong in September and October as several new suppliers announced new and expanded projects. Almost all of the deals announced in the South over the last 45-60 days were made by foreign-owned companies and only a handful were related to the three new assembly plants currently being built in Mississippi, Georgia and Tennessee.

While auto sales may be soft in the South as they are everywhere, you wouldn't know it by what is taking place in the region. New suppliers are breaking ground on new facilities and it should be noted that there hasn't been a time in Southern Automotive Corridor history when three automotive assembly plants were under construction at the same time, which is the case today. Kia and Toyota continue to complete their plants in Georgia and Mississippi and Volkswagen's construction of its plant near Chattanooga has begun.

There are other clues that automotive related companies are readying for an industry recovery in 2009 and 2010. Of the top 10 deals announced in the South during the summer 2008 quarter — one of the worst quarters ever experienced by the auto industry — three were automotive industry projects (Integrity Automotive/Zap – 4,000 new jobs in Kentucky; Volkswagen – 2,000 new jobs in Tennessee; and Glovis – 600 new jobs in Georgia). In fact, those three projects alone will account for over 6,500 new jobs in the region. And with this October 31 report, we have found almost 20 new or expanded automotive-related deals in the region over the last month or so. That, by the way, is only about 10 percent below the norm for a 45-day period in the Southern Automotive Corridor.

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