Detroit South- Part 3 (Hitting a Road Bump)
Thursday, February 08, 2007JEFF YASTINE: In the last decade, foreign auto makers have opened over two dozen assembly plants in the southern United States, bringing with them thousands of jobs. That astounding growth has other states revving up their efforts to recruit the likes of Mercedes, Toyota and Hyundai. As I wrap up my series, it's clear that not everyone believes Detroit south's boom-time will last.
In this southeastern corner of Arkansas, the land is flat and the soil is rich perfect for growing the south's key agricultural commodity. But some people think the fields could grow something else, a foreign automaker's assembly plant and thousands of jobs. Larry Walther is Arkansas's former economic development director.
LARRY WALTHER, FORMER DIR., AR DEPT OF ECON. DEVELOPMENT: Most sites you find, you have to do a considerable amount of work to start off with. This one is ready to roll. You can go a mile in that direction, a mile and a half to the west and you have a super site that's ready for occupancy.
YASTINE: Here in Arkansas, with the state's eastern border along the Mississippi River - that's Memphis, Tennessee right over there -- it would seem to be an ideal spot for a foreign auto maker. Yet Arkansas is one of the few states in the south that still does not have its own automotive assembly plant or the thousands of jobs it would bring to the economy. But state officials have set their sights on attracting a foreign auto maker as soon as possible and also presenting a deal that's as attractive as possible.
WALTHER: I have pretty much 100 percent confidence that we will have one within a short period of time. We have the location. We have the infrastructure and we have the workforce.
YASTINE: But the competition to attract investment dollars from foreign auto makers is heating up like never before. When Honda announced plans last year to build its sixth U.S. auto plant, it chose Indiana, not one of the southern states. Some industry analysts think they know why. The auto plants that have been built in the south in the past decade and a half, have absorbed most of the region's available supply of labor. Steven Szakaly is an economist at the Center for Automotive Research in Michigan.
STEVEN SZAKALY, ECONOMIST, CENTER FOR AUTOMOTIVE RESEARCH: Certainly the south is in somewhat of trouble, in somewhat of a bad situation, because they just don't have the qualified workers to fill these plants and these facilities anymore. And that's definitely an issue for continued development. It's an impediment.
YASTINE: And analysts like Szakaly think that could be the undoing of the south, as a new Detroit.
SZAKALY: It certainly makes it more possible for these manufacturers to open plants in the north. And it certainly makes them more likely to look at the north in terms of opening facilities and once you see the advantages to bringing your plants back up into the upper Midwest and say these plants don't become unionized, the advantage may shift back and I think that's where the concern is.
YASTINE: But executives like Dave Boyer, who runs Nissan's plant in Mississippi, say the south's workforce is up to the job.
DAVE BOYER, VP MANUFACTURING, NISSAN-CANTON PLANT: It would be nice obviously if you had people that were already trained in the types of things that we do. But it's also an advantage if you basically start with a clean slate, because you can train them the way you'd like them to be trained.
YASTINE: Mississippi even built its own research facility, the Center for Advanced Vehicular Systems or CAVS, to create its own home-grown pool of industrial engineering talent. Randall German is director of the CAVS facility.
RANDALL GERMAN, DIRECTOR, CAVS - MISSISSIPPI STATE UNIV.: The students get hands on experience. Now they have faculty that can start teaching courses. So mechanical engineering is putting in an automotive engineering option which had not existed. So that cultural change in the state has been going on and this is just a key ingredient in that change.
YASTINE: Experts say it's a change that will be necessary across much of the south in order for the region to keep its momentum, attracting jobs and capital from foreign auto makers.
