“I recognize that a skilled workforce is necessary for a business to thrive and grow.”
DAYTON, Tenn. — Tennessee Gov. Bill Lee on Wednesday traveled to a pair of rural counties near Chattanooga where two German companies revealed plans to create more than 300 jobs.
"It's transformative," he said, adding there will be "ripple effects" across the state due to the infusion of new jobs and investment.
Stulz Air Technology Systems Inc. will set up manufacturing operations in Dayton, investing $2 million in an existing building and creating 250 jobs. Stulz will make precision heating, ventilation and air-conditioning equipment for computer data farms and other business uses.
Hubner Manufacturing Corp. will invest $9.6 million in putting up a new plant and hire 66 people in nearby Dunlap in Sequatchie County as it manufactures products for the transportation and energy sectors.
Lee, who made breathing new life into rural Tennessee a focus of his gubernatorial campaign, said plans by the companies to bring jobs to the areas are "exactly what I hoped would happen."
"Rural Tennessee is an important component of the economy of this state," said Lee, who was dressed in blue jeans, a white open-collar shirt, brown jacket and boots as he visited the empty Dayton factory building.
Hamburg, Germany-based Stulz will build out its operations in the former International Automotive Components factory at 311 Greenway Blvd. in Dayton. International Automotive employed about 600 people earlier this decade in the city.
Andy Tuthill, vice president for manufacturing operations for Stulz, said plans are to start work in the plant in a few weeks with hopes of production beginning this summer.
He cited Rhea County's workforce and the state's business climate for the company landing in Dayton.
Tuthill said the company will begin with 30 employees with plans to be up to 250 in five years.
Hubner, a subsidiary of the Kasssel, Germany-based Hubner Group, will build a $9.6 million plant in the Dunlap Industrial Park to produce extruded and molded rubber parts, gaskets and seals for the transportation, oil and gas, and aerospace industries.
Window systems, handicap lifts and ramps, and possibly gangway systems are under consideration for a later phase of the new plant development, company officials said.
Hubner plans to begin construction on the 36,000-square-foot building on Tram Trail in the second quarter of this year.
"Dunlap was selected over 11 other sites across six different states," Ron Paquette, CEO of Hubner North America, said in an announcement of the new venture. "The cooperation and support provided by the local, county, and state officials surpassed competing locations and the local workforce demonstrated a strong work ethic and sense of pride in quality that best fit our family-owned company."
Rhea County ended 2018 with the fifth highest jobless rate among Tennessee's 95 counties at 5.1 percent — well above the comparable non-seasonally adjusted statewide rate of 3 percent in December — and 22.9 percent of the population of the county lives in poverty.
Sequatchie County's unemployment rate in December was 3.7 percent — also above the state rate — and neighboring Bledsoe County just north of Dunlap had the state's fourth highest unemployment rate among all counties at 5.4 percent.
Bob Rolfe, the state's commissioner for economic and community development, said Rhea County has "a long, rich history as a leader in the HVAC industry." Dayton's Goodman plant made air-conditioning units until it closed about three years ago. It also employed about 600 people.
Rolfe said counties such as Rhea "have our utmost attention when it comes to attracting new jobs and industry."
Dennis Tumlin, executive director of economic development and tourism in Rhea County, said an existing company there with a supplier relationship with Stulz helped bring the German company to Dayton.
He also cited new jobs announcements by Nokian Tyres, which is building a $360 million tire production plant with plans to eventually hire 400 people, and furniture maker La-Z-Boy.
State Sen. Ken Yager, R-Kingston, termed the Stulz investment and jobs "significant."
"Thanks for your confidence in the local workforce," he said.
Lee, who said both companies are receiving state financial incentives, added that rural counties need an education system that is aligned with the state's job creators.
"I recognize that a skilled workforce is necessary for a business to thrive and grow," he said.
Business Editor Dave Flessner contributed to this story.
Contact Mike Pare at email@example.com or 423-757-6318. Follow him on Twitter @MikePareTFP.