published Tuesday, January 1st, 2013

Recession rebound: Chattanooga leads state in job growth during 2012

Builders work on an apartment building on Cherokee Boulevard.
Builders work on an apartment building on Cherokee Boulevard.
Photo by Allison Love /Chattanooga Times Free Press.

Job Additions

New and expanding businesses announced during 2012 are projected to add more than 4,000 jobs in the Chattanooga area. The biggest job additions were:

• Amazon distribution centers in Hamilton, Bradley, Rutherford and Wilson counties added 3,500 jobs, including 2,000 more seasonal jobs in Chattanooga and Charleston, Tenn.

• Volkswagen expanded production at its Chattanooga assembly plant, adding 1,000 jobs.

• Access America Transport announced plans to add 450 more workers over the next five years.

• Team 3 Logistics, a VW logistics provider, added 150 jobs

• Whirlpool's $120 million expansion completed in Cleveland last year will add 130 more jobs.

• HomeServe USA expanded its telemarketing office in Chattanooga, adding 120 jobs.

• Honigsberg & Duvell opened an information technology office in Chattanooga with plans to hire 116 workers.

• GE Roper expanded production at its LaFayette, Ga., plant, adding 100 workers.

New investments

New and expanding businesses announced plans for more than $150 million of new investments in Chattanooga, including:

• Embassy Suites Hotel near Hamilton Place Mall, $40 million.

• Alexian Village expansion on Signal Mountain, $23 million.

• American Tire Distributors warehouse at Enterprise South Industrial Park, $20 million.

• CarMax opened its $15 million superstore near Hamilton Place Mall.

Hampton Inn & Suites downtown, $14 million.

• HealthSouth Rehabilitation Hospital upgrade, $10 million.

• TownePlace Suites by Marriott near Hamilton Place Mall, $8 million.

• Motel Sleepers hotel and diner on Amnicola Highway, $5 million.

Source: Chattanooga Area Chamber of Commerce

Chattanooga was the fastest-growing major metropolitan area in Tennessee for job additions during 2012.

With major additions in the automotive, appliance and transport industries, the six-county Chattanooga region added 3,900 jobs in the most recent 12-month period tracked by the Bureau of Labor Statistics.

Chattanooga's 1.7 percent annual employment growth was nearly double the statewide growth of 0.9 percent during 2012.

Despite job cuts in health care, financial services and wholesale trade last year, employment gains in construction and manufacturing pushed the jobless rate down at the end of last year to the lowest rate since before the recession hit in 2008.

"We've certainly come a long ways from where we were 30 years ago when our growth was trailing most other Southern cities," Chattanooga Mayor Ron Littlefield said Monday. "We've finally come into our own and I think we've built a base that should help us continue to be a leader."

The region has benefited in the past four years by new business recruits and successful homegrown businesses.

Volkswagen, which picked Chattanooga in 2008 to build its U.S. assembly plant, added another 1,000 jobs and its suppliers added several hundred more during 2012. VW and its suppliers now employ more than 5,000 local workers.

The world's biggest Internet retailer, Amazon, picked Chattanooga and Charleston, Tenn., for distribution centers in 2011 and expanded its staff at those facilities by several thousand employees last year.

During the year-end holiday peak, the two local distributions centers had more than 3,500 employees.

Whirlpool and General Electric, which previously acquired homegrown cooking appliance makers in Cleveland, Tenn., and LaFayette, Ga., respectively, also added employees during 2012 with the rebound in housing and appliance sales.

As the year ended, Lodge Manufacturing Co., of South Pittsburg, also announced plans for an expansion of its cookware operation while Access America, a local logistics company, said it plans to add 450 more workers over the next five years.

"There are still a lot of challenges in the market, but we did see better growth in 2012," said Tim Spires, president of the Chattanooga Regional Manufacturers Association. "We hope that growth continues in the new year, although there are some real worries about what is coming out of Washington."

With payroll taxes and perhaps some upper-income marginal tax rates scheduled to increase today, consumer demand could face some new headwinds. But the economy is showing signs of growth, albeit at a more sluggish pace than some previous recoveries and not yet enough to offset all of the job losses in the recession.

"I don't see a picture that is truly rosy, but it's a whole lot better than it has been," said Keith Sanford, market president for First Tennessee Bank, the biggest bank in the Chattanooga area. "We're seen both consumer and commercial loan growth in eight of the past 12 months. Prior to that, we hadn't seen any such growth in probably four years."

Despite the net addition of nearly 4,000 jobs and more than $150 million of new factories, hotels and stores in the area during 2012, local business closings still cut thousands of other jobs in the area last year.

The closing of Food Lion, Sears, Gap and Kmart stores and the shutdown of the former Olan Mills production center, Taft Youth Center and Georgia Pacific box-making plant collectively eliminated more than 2,000 local jobs during 2012.

From the trough of the recession in the summer of 2009, metropolitan Chattanooga had added 15,400 jobs by November 2012. But the metro area still is more than 10,000 jobs shy of its employment peak reached in 2006.

"We are excited about the employment picture in Chattanooga and believe that the substantial investment by the city, county and Chamber investors prior to and during the recession played a significant role in these results," said Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce. "However, we recognize that there is a lot more work to do."

Business closings

Closings of area factories, retail stores and restaurants cut more than 3,000 area jobs during 2012.

• Food Lion closed 14 supermarkets in Southeast Tennessee and Northwest Georgia, cutting nearly 550 area jobs.

• TVA cut 800 contractor jobs at its Watts Bar Nuclear Plant and 430 contractor jobs at its Bellefonte Nuclear Plant because of a slowdown in construction of the unfinished reactors.

• Taft Youth Development Center in Bledsoe County closed this summer, cutting 400 jobs.

• LifeTouch, which bought Olan Mills Inc. in late 2011, closed its two Chattanooga production facilities in February, cutting 383 jobs.

• Farley's and Sathers closed its Lookout Valley facility and trucking operation, cutting nearly 200 jobs.

• Bunge Oils announced plans in May to close its Alton Park plant, idling 100 workers.

• Georgia Pacific closed its cardboard box-making plant at the end of the year, idling 60 workers.

• The closing of Sears in Cleveland, Kmart on Highway 58, Niko's Southside restaurant, the Piccadilly at Northgate cafeteria and other retailers and restaurants collectively cut more than 500 jobs.

Source: Company reports, Tennessee Department of Labor and Workforce Development

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

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