While the South has succeeded in wooing auto assembly plants, the region needs to get better at attracting well-paying industry research jobs, experts said in Chattanooga on Thursday.
"I'd like for the Southeast to have the high-paying jobs that stay in other countries or go to Detroit," said Clark Midkiff of the University of Alabama's Center for Advanced Vehicle Technologies.
The effort to bolster research and development activities in the region came up often at the Southern Automotive Conference, which includes auto manufacturers from Tennessee, Alabama and Mississippi.
Midkiff said his university hasn't been able to take advantage of the close proximity of the Mercedes-Benz plant to boost research capabilities.
Dennis Cuneo, a well-known industry site selection consultant, said the region ought to coordinate trying to attract more R&D.
He suggested "a virtual organization" where the strengths of differing entities could offer those services as a package.
"The South has to step up its game in innovation," the former Toyota executive said.
Jay Baron, chief executive of the Center for Automotive Research in Ann Arbor, Mich., said his group is talking with some groups in the South about "an automotive research agenda."
"The auto industry is clearly an innovation machine," he said.
Baron said that innovation and an enhanced supply chain are "the key for continued growth in the South."
Tennessee Gov. Bill Haslam said at the conference that Volkswagen wants to eventually add more production at its Chattanooga assembly plant.
"At some point in time, they'd like it to be in Chattanooga," he said.
Haslam, who addressed about 500 people at the two-day auto conference, said VW "loves the product being produced at the plant," citing the Passat midsize sedan.
Kim Korth, president of the automotive consulting firm IRN Inc., said she sees more assembly plants landing in the South and in Mexico over the next five to seven years. She also predicted that more suppliers will look at putting facilities in the Southeast and Southwest.
Concerning auto sales, Korth said that pent-up demand in the marketplace is real.
But, she said, some auto suppliers have indicated there may be softness in the fourth quarter of the year.
"It's not huge. Just a few concerns," Korth said.