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Regional Report: The South's Automotives, Alternative Energy Sectors Ready to Grow

The alternative energy, automotive, and biosciences industries are helping the southern states retain economic stability and plan for future growth.

Lisa A. Bastian (June/July 10)
(page 2 of 3)
After Hurricane Katrina, many life sciences facilities and talent left Louisiana, Kelly says. "But they have literally rebuilt or are in the process of bringing back the life sciences to a pre-Katrina level, and I think will ultimately surpass it." Louisiana State University and the U.S. Department of Veterans Affairs show signs of a comeback. The institutions are erecting a joint medical campus in downtown New Orleans, and the VA expects to treat veterans there by 2013.

Huntsville, Alabama's world-class genomics research institute, opened in 2008, is the cornerstone of a 150-acre biotech campus. Alabama has 90 biotech firms, seven research universities, and a talented work force responsible for six FDA-approved cancer drugs. Tennessee has four "life sciences engines" at work, Kelly says: Knoxville's University of Tennessee Medical Center, Oak Ridge National Laboratory, Nashville's Vanderbilt University, and St. Jude Children's Research Hospital in Memphis.

Kentucky, home to hundreds of diverse bio firms, has become "very progressive in the region in terms of attracting and cultivating life science industry hubs," Kelly says. Through Kentucky's Department of Commercialization and Innovation, the state matches both phases of the federal Small Business Innovation Research and Small Business Technology Transfer programs, the only program of its kind in the country. So far 46 companies have received a combined $17.7 million in matching funds.

Auto Zone Players
Tennessee, Alabama, Kentucky, and Mississippi are active in the southern automotive zone, the mammoth car manufacturing and supplier network that begins south of Michigan and spreads down I-75 into the South.

Unlike Detroit's Big Three, the mostly non-union foreign car makers have fared well during the recession. However, two plants in this region are presently "in limbo" due to the dismal economy, according to David Zoia, editorial director of WardsAuto.com, including Toyota's Blue Springs, Mississippi, plant. "[Officials] say it will take probably 18 months to get it going once they announce products to launch," Zoia says. In December 2008 Toyota announced a delay in finishing construction, which is now about 90 percent complete. Last June General Motors put its ultra-modern Spring Hill, Tennessee, plant on standby. "They haven't said it's marked for closure, but they're keeping it alive without saying what will be built there," Zoia says.

But the industry is revving up again. Volkswagen Group of America is investing $1 billion to build a 1,350-acre auto production facility in Chattanooga. Production will begin early next year on a new mid-size sedan designed just for the North American market. The plant will create 2,000 jobs and initially produce 150,000 vehicles. Chattanooga Seating, Faurecia, Magna, M-Tek, and ThyssenKrupp occupy the adjoining supplier park.

In May Nissan broke ground on a $1.7 billion expansion of its Smyrna, Tennessee plant. The facility will build lithium-ion batteries for the all-electric LEAF car, and will produce the anticipated green vehicle by 2012.

Alabama, well established in the industry, has more than 350 auto-related manufacturers. Hyundai's $1.4 billion, 3,000-employee automotive plant in Montgomery is one of North America's most advanced assembly plants. In May the $1.27 billion Honda plant celebrated its 10th anniversary in Talladega County, where 4,500 workers produce 300,000 vehicles and engines annually. The $1 billion Mercedes-Benz plant in Tuscaloosa County employs 3,000 people and has more than 35 auto-related suppliers in Alabama. Shareholders of Hybrid Kinetic Motors recently voted to build an assembly plant near Bay Minette, Alabama. It will invest approximately $3.43 billion on the project, produce 300,000 vehicles by 2013, and employ up to 5,000 people.

Nearly 10 percent of all cars and trucks produced in America are made in Kentucky. The Commonwealth is home to two Ford assembly plants, a GM plant, a Toyota assembly plant, and a Toyota engineering and manufacturing facility.

Mississippi has almost 200 industry suppliers including Caterpillar, Delphi Automotive Systems, Mazda, and Cooper Tire & Rubber, and 28,000 auto workers thanks largely to Nissan's $1.5 billion plant in Canton. Nissan recently completed a $118 million expansion for production of a new commercial van this fall. The industry's activity has also attracted a new PACCAR truck engine manufacturing facility and Severstal steel mill.
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