published Thursday, October 11th, 2012

Auto recovery speeds ahead as Southern Automotive Conference opens in Chattanooga

New Volkswagen Passats are seen behind the Chattanooga assembly plant's building.
New Volkswagen Passats are seen behind the Chattanooga assembly plant's building.
Photo by Dan Henry.

BY THE NUMBERS

* 3 — Auto assembly plants in Tennessee

* 900 — Auto manufacturers and suppliers in the state

* 105,700 — Tennesseans employed in auto manufacturing jobs

Source: Tennessee Department of Economic and Community Development

Three years ago, the American auto industry was in a heap.

Bankruptcies by General Motors and Chrysler, plant shutdowns from suppliers and the layoffs of longtime workers littered the landscape.

But as the Southern Automotive Conference opens today in Chattanooga, the industry's recovery is accelerating nationally and in Tennessee.

"I wouldn't be surprised to see the number of auto suppliers double [in Tennessee] in the next 10 to 15 years," said U.S. Sen. Lamar Alexander, R-Tenn.

The auto industry has a $6 billion-a-year payroll in the state, said Thomas Brewer, president of the Tennessee Automotive Manufacturers Association.

"About 25 percent of the whole economy is auto related," he said.

Earlier this summer, Business Facilities magazine ranked Tennessee No. 1 in auto manufacturing strength for a third consecutive year.

The conference, which will include auto manufacturers from Tennessee, Alabama and Mississippi, is making its first-ever stop in Chattanooga. Brewer said he expects about 500 people to take part over the two days of meetings, which will include a talk by Jay Williams, President Barack Obama's "car czar" on Friday.

Alexander this week said Tennessee and the Southeast saved auto manufacturing in America after much of the production of cars and trucks has moved to the region.

"We provided the competitive environment in which to make U.S. cars and trucks," he said.

Alexander said that, 30 years ago, there were almost no auto jobs in the region. Today, the senator said, one-third of all Tennessee manufacturing posts are automotive jobs.

"Tennessee led the way in the Southeast for movement of auto jobs to our region," he said.

Brewer said hiring currently is up at all three of the companies making vehicles in Tennessee -- General Motors, Nissan and Volkswagen.

GM's Spring Hill, Tenn., plant is assembling vehicles again, making the Chevrolet Equinox sport utility vehicle with promises to bring one or two more products to the factory, he said.

Nissan is on "a pretty good roll," Brewer said, with production of its Leaf all-electric vehicle slated to start in Smyrna, Tenn. The making of the car's batteries began about a week ago, and motor production should begin in early 2013 in nearby Decherd, Tenn., according to Nissan.

For VW, Brewer said he sees production volume increasing for the midsize Passat at the factory, which is expected to have about 3,500 employees by year's end.

"Volkswagen is the most profitable auto company in the world, and it has a small position in the U.S. It has more room to grow," Alexander said.

The senator and former governor, who played a key role in the recruitment of GM, Nissan and VW to Tennessee, said he foresees two potential roadblocks to ongoing industry growth. The state needs to improve its cadre of skilled workers, he said, noting that the jobs at auto plants aren't like the ones 30 or 40 years ago.

"You've got to be a skilled worker to qualify for one of those jobs," he said. "We need to work harder to provide to auto manufacturers a larger number of skilled workers from which to choose."

Alexander also said the state should have more research and development resources for industry suppliers.

"A lot of the R&D is in Michigan and the Midwest," he said.

Community colleges, universities and companies could partner to create a bigger research base for the industry in the state, he said.

Jesse Toprak, a vice president for industry website TrueCar.com, said he's forecasting a lot of stability for the American auto industry for the rest of the year. Stability is good because auto manufacturers can more accurately adjust production plans and there are no issues of excess inventory, he said.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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