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. 


FSG Bank Presents On Point A Check For $1,000

FSG Bank presented On Point with a check for $1,000 recently from funds raised during the organization’s “Change for Change” coin drive. Supporters made donations in coin canisters at FSG locations in Chattanooga during the spring. The funds will help support On Point’s mission and programs of local youth development. (click for more)

Attorney General Announces Settlement Allowing Dollar Tree To Acquire Family Dollar

Tennessee Attorney General Herbert H. Slatery III announced Thursday the merger of two large national chains of deep discount stores, Dollar Tree, headquartered in Chesapeake, Va. and Family Dollar, headquartered in Matthews, NC. As part of the agreement, Dollar Tree will be required to divest hundreds of Family Dollar stores nationwide, including stores in Memphis and Nashville. ... (click for more)

Muslim Advocacy Group Questions House Arrest For Signal Mountain Man Charged In Threats Against Muslim Village In New York

The Council on American-Islamic Relations (CAIR), the nation's largest Muslim civil rights and advocacy organization, on Saturday questioned the release of a Signal Mountain man who admitted to planning what it called "a Charleston-style terror attack" on a Muslim community in New York. CAIR also called for stepped up protection for the community targeted in the plot. Judge ... (click for more)

Plumbers Bring Complaints To WWTA; Told New Contracts Are Ready

Several plumbers on Thursday brought complaints to a committee of the Hamilton County Water and Wastewater Treatment Authority (WWTA) and got little response other than being told that new contracts are ready. Kay Keefe of Keefe Plumbing said the small number of plumbing companies still participating in the program to repair leaky lines to homes, have long been operating without ... (click for more)

Could The Marriage Decision Spark A New Independence Day?

I confess that this year I am having a hard time with the idea of celebrating the 4th of July Independence Day. It is not because I am not thankful to God for what was done on that day, what it represents, and the blessings I’ve experienced that flow from it. On the other hand, I want to think that maybe this year’s celebration will mark a period in our history in which a new movement ... (click for more)

Roy Exum: Dr. Tydings Is A Winner

One week from tomorrow the most important educator in the future of our community will start work as the new president of Chattanooga State. While I am normally cynical of beard-strokers and foundation-hungry dreamers who have little or no concept of the real world, I am convinced Flora Tydings will become the best thing to happen in our community in years. A grandmother with ... (click for more)