The big dogs are about to eat
Soon, the automotive industry will light up the Southern Auto Corridor again
By Mike Randle
"Are we there yet?” That's this issue's cover story headline. "There" means back to a reasonably productive, somewhat predictable economy. "There" also infers the South's economy had to go somewhere other than there. Somewhere was called the Great Recession.
We heard it all from 2007 to 2009, even into 2010 from the skeptics. The "new normal" was the phrase I disliked the most. That statement just reeked of hopelessness, as hopeless as believing the worst economy of our lifetime is now "normal," so "get over it." Hopeless is not a word you business owners, entrepreneurs or economic developers use very often. That’s what makes this business of economic development so much fun. We work among optimists.
The South's unemployment rate, lower than the national rate, is currently a fraction above seven percent. So we are not there yet. But we are more than halfway there. Regionally, unemployment peaked well above nine percent at one point in 2010, with some Southern states sporting nearly 12 percent unemployment. One of those states was Florida, a state we are featuring in this issue. Florida's unemployment rate is currently right at the South's average. Four years ago, skeptics thought The Sunshine State was cooked.
The South is certainly somewhere else than where it was when it comes to attracting your next project. If you recall, panic broke out among several states in the South during the recession, probably from the same folks calling the struggles "the new normal." The austerity crowds were actually raiding state incentive funds to patch up their finances. Got to do what you got to do, I guess.
But raiding incentive funds is pretty desperate considering a state's financial return on job and investment generating projects. Today, some states are seeing "substantial" surpluses in revenue. It's the result of more people working and more companies like yours making investments in Southern states. That hopeless feeling is gone. The South grew its way out of the recession instead of cutting and running.
And several industries must be commended for helping the South grow its way out of the recession. Here are a few: It's nice to see the construction industry hiring briskly, and the petrochemical industry is driving the new industrial revolution in the South. Aviation and aerospace has had a nice run the past few years in the region. Manufacturing in general is off the charts and some service sectors, like distribution, are finally showing some signs of life.
But the one industry that will get us "there" hasn't made its move, yet. That's right, the big dog hasn't eaten and there is no bigger industry in the South than automotive. Most folks don't know, but there have been no new major assembly plants announced in the Southern Auto Corridor since Volkswagen in Chattanooga in July 2008. More than five years without a new OEM? That hasn't happened in the Southern Auto Corridor but once since the 1970s.
Sure, there have been many large expansion announcements since the recession ended. Just about every assembly plant in the South is working three shifts, 24/7. But there is no such thing as a fourth shift. It’s time for the big dogs to eat.
Some in the know are predicting as many as nine new assembly plants announced in North America in the next four to five years, including those from Hyundai, VW, BMW, Mercedes, Honda, Toyota, Fiat, Renault and Tata. Most say five new OEMs. If it's five in three years, well, that’s never happened.
SB&D, SouthernAutoCorridor.com and The Randle Report are jointly publishing what amounts to the "bible" of the South’s automotive industry in an effort to give the Southern Auto Corridor (SAC) its best shot at landing all of those prospective plants, no matter how many there are. Everything you ever wanted to know about the SAC will be contained in this one special edition that will come out in September.
If you are in the auto industry and you are trying to choose between the SAC and Mexico, or just trying to choose between one county or another in the same state, it’s a must that you read this bonus edition.
If you are an economic developer in the Southern Auto Corridor actively recruiting suppliers or OEMs, it’s a must that you have some kind of presence in this issue. You need a large one, but you better hurry.
So, we will see if the auto industry breaks out like many experts expect it to do. After all, we're almost "there." There’s a “new normal” in the South.