Brookings Report Provides Tennessee Roadmap For Automotive Manufacturing Growth

Friday, October 4, 2013

A report released Friday by the Brookings Institution’s Metropolitan Policy Program touts Tennessee’s automotive manufacturing industry as the “southern automotive powerhouse” and issues recommendations that could increase Tennessee’s competiveness in the global auto marketplace.

According to Brookings, Tennessee’s automotive is strong and could be even brighter if the state develops strategies to grow the supplier network, develop more high skilled workers, and foster a culture of innovation. Succeeding on these dimensions will ensure that the state remains a top choice for automotive industry expansion amid increasing competition in the global automotive market.

In its report, titled “Drive! Moving Tennessee’s Automotive Sector Up the Value Chain,” Brookings writes, “Tennessee has emerged as a southern automotive powerhouse. The state’s original underlying strengths—a strategic, low-cost location equipped with excellent transportation infrastructure—have been enhanced in the last decade and now position Tennessee quite well in the face of a number of disruptive megatrends that will alter the global industry. Despite growing domestic and international competition the state’s prospects are in fact bright.”

Brookings, the highly-respected research and policy organization, affirms Tennessee’s position as a leader in the North American automotive industry, including:

·         The state is  home to the largest auto industry in the South in terms of employment, and supply chain employment;

·         An industry profile with 650 automotive businesses (direct employment) including three original equipment manufacturers (OEMs) – Volkswagen, Nissan and General Motors;

·         More than 94,000 Tennesseans work in automotive manufacturing; 12,000 work directly for VW, Nissan and GM; and 82,000 more (78 percent of the industry) in the supply chain.

·         A network expanding across 75 of the state’s 95 counties.

·         An industry that accounts for more than one-third of all state manufacturing jobs;

·         The driving force of Tennessee’s recession recovery,   responsible for 12 percent of all job creation since 2008. From 2010 – 2012 employment increased by an average 16.1 percent compared to 1.8 percent for the overall economy.

“Our industry is a primary driver of Tennessee’s economy and a major contributor to prosperity and quality of life of our citizens,” said Tom Brewer, president of the Tennessee Automotive Manufacturers Association (TAMA).  “This success happened over a 30-year period due to strong leadership, policies and business-friendly fundamentals that have positioned Tennessee for an exceptional future as the headquarters of Southern automotive manufacturing.”

Brookings identifies three strategies designed to keep Tennessee on this path and propel the state forward:

·         Prioritize growth of the supplier marketplace by implementing policies that create avenues for exporting, reward research and development and improve access to capital for technology transfer and capital expenditures. The state should also play a role in encouraging suppliers to collaborate.

·         Lead the way in developing creative solutions to resolve the workforce challenges for large automakers and small and medium-sized companies. The report recommends a state-led effort that leverages its regional economic development zones to create training programs tailored to the automotive specialties in those regions.

·         Encourage innovation through research and development tax credits and facilitate collaboration between private industry and the state’s research institutions to help overcome competition from lower-cost countries and will move Tennessee from a primarily production location to a center of excellence for innovation and research and development

In addition to comprehensively analyzing the state’s automotive assets and opportunities, the report outlines a number of challenges that could threaten the state’s top position, including:

·         Cost pressures remain intense. Wages are converging across the United States and free-trade agreements make low-cost countries like Mexico attractive for new location decisions;

·         A shortage of skilled workers threatens expansion of existing firms;

·         Changing preferences of drivers and regulatory requirements will require automakers to develop and implement new technologies more quickly. Innovation and research and development expertise is needed at all levels of the supply chain, the report states.

The Brookings study recommends increased private and public sector support of a strong industry association to “market and advocate for the industry and facilitate networking, learning, and supply chain activities.”

“As the state’s leading automotive industry organization, TAMA is excited to support our state’s leaders as they take steps to drive Tennessee’s most important advanced industry forward,” said Mr. Brewer. 


Perdue Sees Dangerous Fiscal Trend Continue

Senator David Perdue (R-GA), a member of the Senate Budget Committee, released the following statement in response to the Congressional Budget Office’s (CBO) update to The Budget and Economic Outlook: 2016 to 2026. “Reading these CBO economic outlook reports remind me of the movie  Groundhog Day . Each new report paints the same alarming picture for our fiscal future, ... (click for more)

Supreme Court Upholds Denial Of Pretrial Diversion Applications

The Tennessee Supreme Court has upheld the denial of pretrial diversion in two cases, which were consolidated for oral argument. In these appeals, the Supreme Court reiterated the process district attorneys general, trial courts, and appellate courts must follow when reviewing a prosecutor’s denial of pretrial diversion.  In one appeal, Susan Gail Stephens was indicted for ... (click for more)

Federal Judge Orders Walker County To Pay Erlanger $8,705,000, Plus Interest; Question Of Attorney Fees And Expenses To Go To Jury

Federal Judge Harold Murphy, in a 63-page ruling handed down Tuesday, ordered Walker County, Ga., to pay the Erlanger Health System $8,705,000, plus interest, on the Hutcheson Hospital debt. Judge Murphy, of Rome, Ga., said the question of attorney fees and expenses owed Erlanger by Walker County should be decided by a jury trial. Walker County and Catoosa County earlier agreed ... (click for more)

Pinkston Says Offer Was Made To Dismiss Lawsuit Against Him If Prosecution Of Detective Burns Was Dropped; Judge Greenholtz "Greatly Bothered" By Any Such Offer

District Attorney Neal Pinkston said at a hearing Tuesday that an offer was made to drop a lawsuit filed against him by Gatlinburg detective Rodney Burns if he would dismiss two perjury counts against Burns. The district attorney said he should not be disqualified from continuing to prosecute the case or else attorneys would begin suing him or the judge to get a new DA or trial ... (click for more)

Problems With The Proposed Apartments In Lookout Valley

I am deeply troubled at the way in which this proposal has been handled. The blatant disregard for the residents of Kelly's Ferry Road and the wishes of the Lookout Valley Area Plan (which was adopted by the city in 2003) by Chip Henderson and Tommy Austin amazes me. Yes, there was a meeting of the Lookout Valley Neighborhood association in August, but it wasn't on its normal ... (click for more)

Roy Exum: Ooltewah & The Bullies

During the week of Christmas I got an email from a longtime friend at the Knoxville News-Sentinel that laughingly wondered what kind of basketball do you people play (in Chattanooga?) It included sketchy details of the rape, and subsequent surgery, of an Ooltewah High School basketball player who had been assaulted by his own teammates at a Gatlinburg holiday tournament. Today ... (click for more)