McMinn County auto suppliers are driving employment

McMinn County auto suppliers are driving employment

August 24th, 2014 by Mike Pare in Business Around the Region

David Sawyer, logistics manager at HP Pelzer in Athens, shows carpet the company makes for the Chrysler 200.

Photo by Tim Barber/Times Free Press.

TOP 10

Industrial Employers in McMinn County

Company and number of employees:

• Denso: 1,300

• Manufacturer's Industrial Group: 995

• Resolute Forest Products: 542

• Waupaca Foundry: 509

• Heil International Trailers: 443

• Mayfield Dairy: 330

• Thomas & Betts: 287

• Dynasty Spas: 246

• Johns Manville: 224

• E&E Manufacturing: 187

Source: McMinn County Economic Development Authority

ATHENS, Tenn - Kathy Knight says a new $28 million HP Pelzer factory that's building automotive soundproofing products here is growing faster than company officials first thought.

"That gives us hope that the economy has turned around and we're seeing the jobs we had lost" in the Great Recession, said Knight, who directs the McMinn County Economic Development Authority.

The Pelzer factory, where up to 200 employees will work by next spring, is another addition to McMinn County's cluster of auto companies. Four of the county's top five industrial employers, and five of its 10 biggest, are automotive or transportation related.

Together, the companies employ more than 3,200 workers, and that doesn't include the Pelzer plant that will move into the top 10 next year if hiring goes as projected.

In addition to Pelzer, auto parts supplier Denso is finishing up a $50 million expansion that's adding 130 jobs. After that, Denso already has announced another $55 million plant investment that will create 130 more slots, said Brandy Cooper, a company spokeswoman.

The expansions are a positive indicator of both the plant and the county, she said.

"A decision on where products are made, that comes from Japan," Cooper said. "They come out and visit and base those decisions" on those trips.

Eric Weiss, HP Pelzer's plant manager, said the company supplies Volkswagen's Chattanooga plant, and it would like to do more business with the German automaker.

"The VW plant is one of our largest customers," he said recently in an interview at the 185,000-square-foot plant on a site that can handle a potential 75,000-square-foot expansion.

In addition to VW, Pelzer customers include Chrysler, General Motors, Toyota and Mercedes. Weiss said that building the plant in McMinn County helps the company, which has North American headquarters in Troy, Mich., be closer to its customers.

The plant manager said company officials like McMinn County due to its location on Interstate 75.

"The I-75 corridor is important to the supply industry," he said. "It gets parts to Detroit and the Southern manufacturers easier."

Knight said that McMinn, located about 40 miles north of Chattanooga, is less than an hour's drive to the Scenic City and Knoxville.

"That gives us a good opportunity to tap two urban areas' resources," she said.

Also, McMinn has good availability of property for companies, Knight said.

Pelzer, for example, is the first tenant in a new industrial park that still has 200 acres open to other businesses, she said.

Within the county, there's about 600 acres available with infrastructure, Knight said.

She said McMinn tends to attract auto parts manufacturers which supply other companies which then sell directly to the car makers. VW, for example, likes to keep its so-called tier one suppliers closer to the plant, the economic development director said.

Knight said the county was hit hard by the last recession, which also pummeled the auto industry.

But, along with auto sales, business has come back strong, she said.

"Most, if not all [of McMinn's parts suppliers,] are back to pre-recessionary levels or above," Knight said.

McMinn's jobless rate in June was 8.2 percent, down from 9.9 percent a year earlier, according to the Tennessee Department of Labor and Workforce Development.

Still, the county is eying more diversification.

McMinn County Mayor John Gentry, for example, lauded a $105 million expansion at the Resolute Forest Products plant that started last week in Calhoun, Tenn. That project is adding 50 jobs, putting the plant's workforce back over 500, as the company looks at producing new grades of paper.

"This helps us maintain a diverse industrial base," Gentry said.

Knight said the county would like to recruit more businesses in food manufacturing. Other growth sectors are currently being identified, she said.

"We are an industrial town and proud of our heritage," she said. "We looking for more manufacturing jobs to come."

Another step McMinn is taking is to create a regional center for advanced manufacturing to better train workers. Knight said it could be like the Volkswagen training academy on VW's campus that's run by Chattanooga State Community College.

"It would be flexible space to train for the jobs of the future," she said. "Companies are looking for available land and a quality workforce. We want to meet those demands."

Knight said plans are to seek an Appalachian Regional Commission grant to conduct pre-engineering work on the proposed training center and then find construction funding.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.