Detroit's loss is South's gain
Associated Press
Wednesday, November 19, 2008

WASHINGTON --- If it's no surprise that Michigan lawmakers are behind the pitch for a $25 billion lifeline for Detroit automakers, then it might be just as predictable that Southerners would be leading the charge against it.

Southern politicians have spent years luring foreign automakers to build cars in their states, with huge success. South Carolina has BMW. Mississippi recently landed a major plant for Toyota Motor Corp. Alabama boasts plants run by Mercedes-Benz, Hyundai Motor Co. and Honda Motor Co.

In Georgia, Gov. Sonny Perdue recently began using a Kia SUV in honor of the company's planned $1.2 billion manufacturing facility there.

It's not that Southerners are secretly wishing for the Big Three to collapse. But if those automakers were to falter, the new players are poised to ramp up production and possibly turn the South into the next Detroit.

"In the long run, having fewer competitors or weaker competitors is generally a good thing," said Efraim Levy, a senior auto industry analyst with Standard & Poor's. "It would contribute to a greater relative strength in the South."

The regional divide is not clear-cut. Most Southern states still have a stake in the well-being of the Big Three and would suffer their own losses if the companies dramatically scaled back operations or closed their doors.

Kentucky and Tennessee have large GM plants, for example, and major auto suppliers are scattered across the region. In addition, the foreign automakers could see temporary supply disruptions in a destabilized market.

But foreign makers have made clear their preference for the union-resistant South as a U.S. manufacturing base. Increasingly, the states' economic interests are realigning accordingly.

In Alabama, the number of auto industry jobs has more than doubled to nearly 50,000 since 2001, according to the Alabama Automotive Manufacturers Association. The vast majority of the positions are tied to new Honda, Hyundai and Mercedes plants.

In Tennessee, General Motors is planning to slow down production at its 3,500-worker plant in Spring Hill. Nissan Motor Co., meanwhile, has more than 6,500 employees in the state, and Volkswagen is set to break ground on a Chattanooga assembly plant that will provide about 2,000 jobs.

Southern members of Congress -- and a handful of Southern governors -- have been among the most vocal critics of a Detroit bailout. Most are Republicans, and they insist their opposition is largely about fiscal restraint and free markets. But competitive interests are also at play.

South Carolina Gov. Mark Sanford recently wondered whether BMW would have built its plant in Greer if the government had been handing out money to its rivals, and Rep. Lynn Westmoreland of Georgia voiced similar concerns about the state's Kia plant, which could bring 2,500 jobs to his rural district.

"Let's face it, who would want to come over here and put their investment into this country if they knew the government was going to be subsidizing their competitors?" he said.

From the Wednesday, November 19, 2008 edition of the Augusta Chronicle
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