Detroit recovers as South surges

Detroit recovers as South surges

January 12th, 2011 by Mike Pare in Volkswagen

DETROIT -- While Detroit and Michigan are recovering from the recession and auto industry meltdown, the South is surging with two new assembly plants slated to open this year.

Volkswagen's Chattanooga assembly plant and Toyota's manufacturing facility near Tupelo, Miss., along with their suppliers will employ thousands of new workers as the auto industry continues a shift South.

"Tennessee is poised for great things," said U.S. Sen. Bob Corker, R-Tenn., at the North American International Auto Show this week.

Corker said he's still hopeful Detroit comes back strong.

"Alan Mulally is one of my heroes," he said about the Ford Motor Co. chief executive. At the auto show, Ford announced plans to hire as many as 7,000 workers over the next two years.

But, Corker said Tennessee is a "pro-business state" appealing to not just auto manufacturers but other industries and technologies as well.

Earlier this week, Nissan announced it will move production of its Rogue crossover sport utility vehicle from its factory in Kyushu, Japan, to its facility in Smyrna, Tenn.

The shift, which will take place by 2013, will bring more than 100,000 units of production to the Smyrna plant, according to Nissan.

Meanwhile, Michigan's seasonally adjusted jobless rate for November was 12.4 percent, tied for second-highest in the nation with California and behind only Nevada.

While economic developers in the South still have a lot of work to do, Tennessee's unemployment rate was 9.4 percent in November. Georgia's jobless rate was 10.1 percent.

The national unemployment rate was 9.4 percent in December.

Detroit and Michigan are seeing improvement as the auto industry comes back and the state undergoes growth in other segments of the economy.

Mulally said at the auto show that Ford is boosting expectations for industrywide sales in 2011 in the United States.

"Clearly we're on a good growth mode," he said.

Luis Cisneros, who works for auto industry supplier Continental and was at a Ford F-150 production plant in Dearborn, Mich., last week, said he is seeing the industry turnaround.

"We're producing more parts," he said, adding that the business also supplies General Motors and Chrysler along with some European car companies.

Olivier Francois, the Chrysler brand's CEO, said at the auto show that Detroit has a passion for the auto business.

He said that energy "burns through the coldest January morning."

Room to grow

Still, the South and Chattanooga have opportunities to grow the auto sector.

Chattanooga's VW plant has hired more than 1,200 of the 2,000 employees it has announced plans to employ. VW's supplier park, meanwhile, has room to grow as well.

On Monday, VW Group of America CEO Jonathan Browning said VW has the ability to expand the Chattanooga plant from producing 150,000 vehicles annually to 250,000 by adding some lines in its paint shop.

Also, by building a mirror image of the plant on land at Enterprise South industrial park already committed to VW, production could hit 500,000 units, he said.

Tennessee Gov. Phil Bredesen also cited Chattanooga and Hamilton County for having the foresight to create Enterprise South and save the expanse of land for a big automotive project.

"The availability of that site, that was a key," he said.