As U.S. manufacturing continues its renaissance across the United States, the biggest winner in the renewal of American manufacturing looks to be the South.
Each week seems to bring a passel of new reports about fresh manufacturing jobs below the Mason-Dixon line, often in substantial numbers.
One such announcement is that of Aerospace forgings supplier Wyman-Gordon. The firm just announced it will set up shop in Dillon County, South Carolina, and its new plant will create more than 400 jobs over the next five years. Metal-processing giant Samuel Son & Co. is building a $33-million plant in Tennessee that will create 42 jobs. And Villa International, provider of luxury furniture for motor homes, plans to refurbish an old factory in Belmont, Miss., creating 75 jobs. In all, companies in Southern states announced 410 commercial projects in 2013—the most in 20 years—worth at least $30 million each, with about 68% being in manufacturing.
“In all, companies in Southern states announced 410 commercial projects in 2013—the most in 20 years—worth at least $30 million each, with about 68% being in manufacturing.”
There also are more glowing reports about the business climate in the South vis-à-vis other regions, in large part due to tax structures and relatively forgiving regulatory structures that stand out compared with the Midwest and the coasts. In the latest, Texas, Florida, Georgia and North Carolina were deemed as having the best business climates in a survey of U.S. corporate executives by the International Economic Development Council. In addition, Business Facilities magazine recently ranked Alabama as the top U.S. state for automotive-manufacturing strength.
Sun Belt states long have competed effectively for service-company jobs. But this new phase is seeing states from North Carolina to Texas landing manufacturing expansion that depends on a certain level of education and job sophistication—an advantage that previously was a decided edge for the industrial Midwest but which now, thanks in large part to state-sponsored training programs, the South is turning into a draw. Georgia, Louisiana, South Carolina and Tennessee, in particular, are noted for job-training programs that are helping persuade many corporate site selectors.
Lack of unionization also remains a big overall advantage to most companies for locating manufacturing in the South. Although the rise of right-to-work in northern industrial states such as Michigan and Indiana, and the incipient United Auto Workers organizing drives at German-automaker operations in the region, have dulled this edge a bit. But there remains a rock-solid resistance to unions that is reliable enough to draw investments from major players such as Electrolux, which opened a new plant in the Memphis area about a year ago, now employing more than 1,000 people, so that it could phase out an expensive, aging union plant outside Montreal.
Other states wanting to draw new manufacturing business should draw on the lessons learned in the South.