The race to snag a 4,000-job auto plant

8/22/2017

One of the biggest potential job-creating bonanzas in the country, a giant auto plant proposed by Toyota and Mazda, began in secret with a mysterious code name.

Now it has become a full-blown race among states to try to reel in the $1.6-billion project that will create 4,000 good paying direct jobs and thousands of indirect jobs. The two Japanese automakers recently issued a blind request for proposals to states in the South, Midwest and mid-Atlantic, according to two people familiar with the plans who were not authorized to speak publicly because the process was confidential.

Told only that an unidentified employer was weighing its options for a massive project under the code name Project Mitt, state economic development officials delivered preliminary proposals, including potential tax incentives, job training programs and infrastructure investments.

When the Japanese automakers publicly revealed their joint venture two weeks ago, they made it clear they had not yet picked a site.

No fewer than a dozen states are believed to have a shot at landing the automotive factory, which automotive industry researchers say could create several times as many jobs at nearby employers.

Job-creating projects of this magnitude are rare — it would be only the fourth U.S. assembly plant in a decade when it opens in 2021 — so Toyota and Mazda are expecting contenders to roll out the red carpet for their 50-50 joint venture.

Also making the project a plum, Toyota, in particular, takes “a very long-term view” that should keep its giant plant in place for half a century or more, said Ron Harbour, an expert on auto manufacturing sites who works for consultancy Oliver Wyman.

“You have to be able to say you’ve got the workforce, you’ve got the land, you’ve got the transportation systems and rail spurs, community college and education and a place where people want to live,” said Kristin Dziczek, director of industry, labor and economics at the Center for Automotive Research. “Once you’ve got all that, tax incentives come into play.”

Access to a dependable labor force, a vibrant community and enough contiguous land close to power and transportation infrastructure could make the difference, said Bradley Migdal, senior managing director and business incentives expert at Cushman & Wakefield.

Toyota, which hired commercial real estate firm Jones Lang LaSalle to help manage the process, declined to discuss states under consideration.

“We are just beginning the discovery process,” Toyota said in a statement. “As we solidify our plans, we will share more information about the selection process.”

Mazda spokesman Jeremy Barnes, in an email, said, “I do know that no decisions have been made at this time, and that all options remain on the table.”

Here’s a look at some of the key Southern states in the mix:

Tennessee

Why it could win: Significant, growing automotive sector; perfect location for logistical purposes; strong business climate.

Why it could lose: If the automakers decide there aren’t enough workers.

Hoping to lure the Toyota plant that eventually went to Blue Springs, Miss., Tennessee a decade ago acquired property dubbed the Memphis Regional Megasite. The site, which remains unused, is 4,100 acres situated 32 miles east of Memphis on vacant farm land along Interstate 40.

Site selection consultants said it’s one of Tennessee’s leading candidates for industrial investment. Tennessee already has spent more than $140 million on the Memphis Megasite, building roads and water and sewer lines. — Ted Evanoff, Memphis Commercial - Appeal

Alabama

Why it could win: Low-cost labor, bustling auto sector.

Why it could lose: Might not have enough workers.

Alabama’s vibrant auto manufacturing sector could help or hurt.

Three auto assembly plants made more than 1 million vehicles in 2016 in Alabama. The industry employed nearly 40,000 people in a right-to-work state desperate for good-paying jobs.

Gov. Kay Ivey said new incentives laws have made Alabama more attractive to expanding companies. The changes she signed into law in May raised the annual state incentives cap to $300 million. — Brad Harper, Montgomery Advertiser

Arkansas

Why it could win: Was a finalist for the last new Toyota plant.

Why it could lose: Too far away from suppliers.

Arkansas was a finalist for the Toyota factory that opened in Blue Springs, Miss., in 2011.

Arkansas Economic Development Commission spokesman Jeff Moore said the state “certainly has interest” again.

Arkansas has broad latitude in issuing bonds to raise funds for infrastructure, land acquisition and job training. — Kevin Hardy, Des Moines Register

Georgia

Why it could win: Worker training programs, enticing location.

Why it could lose: Lack of ties to Toyota operations.

Georgia is host to one of the newest U.S. assembly plants: the Kia factory in West Point, which opened in 2009, which has some 3,000 workers today.

Among Georgia’s most compelling arguments is that its worker training programs are among “the best in the country,” said Bradley Migdal, the Cushman & Wakefield site expert. — Nathan Bomey, USA TODAY

Kentucky

Why it could win: Toyota already has a massive factory in Georgetown, Ky.; close to numerous suppliers; likely to offer major incentives.

Why it could lose: If Toyota decides it’s already exhausted the local workforce for talent. Toyota’s 8 million square- foot, 8,200-job Georgetown, Ky., facility makes more than 500,000 Camry, Lexus and Avalon vehicles per year. Toyota is investing $1.3 billion into plant upgrades.

Gov. Matt Bevin told auto executives that a shovel-ready 1,550-acre site in central Kentucky, south of Elizabethtown near Interstate 65, is an ideal location for the investment. — Grace Schneider, Louisville Courier- Journal

Mississippi

Why it could win: Landed the last new Toyota plant.

Why it could lose: If Toyota believes the local workforce can’t sustain another factory.

The Toyota plant in Blue Springs, Miss. opened in 2011 and employs about 2,000 people. The state also has Nissan’s 5,000-person assembly plant in Canton.

Even with two major plants, the state can easily accommodate another and gin up training dollars to assure Toyota of a competent workforce, said Scott Waller, interim chief executive of the Mississippi Economic Council. — Ted Evanoff, Memphis Commercial- Appeal

North Carolina

Why it could win: No automotive assembly plants to compete with for talent.

Why it could lose: If the state is viewed as not having enough of a manufacturing workforce. North Carolina doesn’t have any automotive assembly plants, which could prove enticing to Toyota because of the chance to bolster its political clout from the swing-state’s congressional delegation.

But the Tar Heel State has 26,000 workers at companies that supply the auto industry. — Ted Evanoff, Memphis Commercial- Appeal

South Carolina

Why it could win: Growing automotive sector.

Why it could lose: If the automakers decide the job market is too crowded.

Finding the workers for such a plant could be a tall order, in part because of the state’s flourishing manufacturing sector. But state leaders said they have a proven track record for rising to the challenge by investing in training programs.

“We are a state that houses BMW, Volvo, Mercedes-Benz and Boeing,” South Carolina Department of Commerce spokeswoman Adrienne Fairwell said. “We have a workforce that is ready and available.” — Anna B. Mitchell, The Greenville News

Source: Knoxville News Sentinel, NATHAN BOMEY USA TODAY

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org

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