November 2018

For real-time news on business, politics and economic development in the South, go to www.RandleReport.com. For all of the South’s announced projects, go to www.SB-D.com.

Job generation under Obama and Trump essentially the same. But that is about to change.
So far in President Trump’s first term, the average monthly job gains have been about 208,000. In President Obama’s last five years in office, job gains averaged 207,000 per month. Yet, in Obama’s first few years in office, there was a large unemployed labor pool. Not so today with an unemployment rate in October of 3.7 percent. There is no question that monthly job growth will slow in the next two years. It has to, and it has nothing to do with politics or who is president. It has to do with demographics. With millions of Baby Boomers aging out, and only about 70,000 workers turning working age (16) each year over the last three years, the pool of workers is getting much smaller. It’s just math. It is impossible to create 200,000 jobs per month when only about a third of that total of available workers are turning 16. The only way to replace those aging out or to increase the workforce is to embrace immigration, and we all know that is not going to happen.

U.S. steel and aluminum tariffs are backfiring
According to a report by Business Forward, prices in the U.S. for hot and cold-rolled steel have risen by 13.5 percent and 8.9 percent respectively since President Trump announced plans for steel and aluminum tariffs in February. As a result, U.S. manufacturers that use the metals in their manufacturing processes are paying 15.8 percent more for steel. While the tariffs have created jobs for steelmakers in the U.S., manufacturers using steel are cutting jobs. According to Business Forward, companies that buy steel in the U.S. employ more than 46 times more workers than companies that produce steel. The Tax Foundation has estimated that the tariffs and higher metal costs will cause GDP to fall by $148 billion, and lost jobs could increase by over 450,000 for manufacturers that use steel in their processes.

Trade war costing Ford $1 billion
Few U.S. companies have been blindsided by President Trump’s trade war with China and other parts of the world more than Michigan-based Ford. Ford CEO Jim Hackett said in a November story published by Bloomberg, that Trump’s tariffs on metal imports will cost the automaker $1 billion in lost profit by the end of 2019. This, despite the fact that Ford was already buying most of its steel and aluminum from U.S. producers.

New Volvo plant in South Carolina caught in crosshairs of tariff war
Volvo Cars is pivoting its production plans just months after opening a new $1.1 billion assembly plant in Berkeley County, S.C. The Swedish automaker, which is owned by China-based Geely Holding Group, canceled plans to export roughly half the S60 sedans it assembles in South Carolina to China. Volvo will also stop U.S. imports of its popular XC60 SUV from its factory in China. It will also reduce exports of its S90 sedan built in China. The moves are being made as the automaker finds itself in a pickle regarding President Trump’s tariffs on automobiles. President Trump imposed tariffs of 27.5 percent on Chinese auto imports and in a tit-for-tat move, China’s President Xi Jinping slapped a 40 percent tariff on American-built autos. In 2022, Volvo will assemble its XC90 SUV at its South Carolina plant and will focus on the American market for the S60s it is making there for now.

Mass migration from California concerning to Texans
By Michael Randle
It’s not just companies like Toyota, which cited incredibly high housing costs when it announced in April 2014 that it was relocating its U.S. headquarters from California to Plano, Texas, it is also families moving to Texas and other places in the South looking for work and a cheaper lifestyle. In fact, in 2016 alone, 70,000 Californians relocated to Texas, according to data from the U.S. Census.

The average price of a home was over $725,000 where Toyota was operating its largest North American headquarters in Southern California. In Plano, the average home costs around $325,000. Toyota relocated about 3,000 people from California and added another 1,200 workers at its new headquarters in Plano, which has been operational since move-in day in May of 2017.

Hundreds of companies have moved their operations and headquarters from California to Texas and other parts of the South. Nissan announced it was relocating its headquarters from Southern California to Franklin, Tenn., a Nashville suburb, in 2005. Thousands of people work at Nissan headquarters near Nashville, as well as the Japanese automaker’s largest North American plant in nearby Smyrna, Tenn.

Why have Toyota and Nissan relocated their headquarters to the South? It’s the same reason so many companies have migrated to the South over the last seven decades: operational costs, and even more important for the employer, the cost of living for their employees. Simply put, the two automakers’ employees could not afford to live close to their company’s headquarters in the Los Angeles region. Now employees of Toyota and Nissan can purchase a home at their new locations and a vacation home for about the same money as their California homes.

However, there are some in Texas — the leading destination for California migrants as well as migrating companies — who are worried that the state will morph into the Golden State when it comes to rising housing costs, traffic and rising taxes. In fact, many in Texas believe the state is experiencing the same growth California saw in the ’50s, ’60s and ‘70s, and that the growth will price out the state in time. Others in Texas support the growth, pointing to the quality of life in California that technically beats the Lone Star State’s quality of life in just about every measure including education.

Trade war could relocate some BMW production from South Carolina to China
In 2017, BMW exported 81,186 vehicles made in Greer, S.C., to China with an export value of over $2 billion. Now that export is threatened by President Trump’s tariffs on cars imported from China and China’s tariffs on vehicles exported from the U.S. BMW, which is expected to lose $344 million in revenue as a result of the tariffs, is considering moving some production of its South Carolina-made SUVs to its plant in China. Because of Chinese tariffs that countered Trump’s tariffs, BMW is expected to raise the price of its South Carolina-made X models by as much as seven percent.

Auto, appliance supplier adding jobs in central Tennessee
Truform Manufacturing is investing $14 million to expand its plant in Dickson County, Tenn. The deal will create 90 new jobs.

Swedish-based auto supplier picks Orangeburg, S.C., for new plant
Gnotec Group is locating a new manufacturing plant in Orangeburg County. The company specializes in chassis structures, and the new Volvo plant is located nearby. The $5.9 million plant will house 78 workers.

Korean auto supplier expands in Greenville, Ala.
Auto supplier Hwashin America is expanding its Greenville plant with a $26 million investment. The company supplies body components for Hyundai’s plant in Montgomery, Ala. The project will create 50 jobs.

Raytheon breaks ground on new radar facility in Mississippi
Defense contractor Raytheon broke ground on its new radar production plant in Forest, Miss., in November. Raytheon is investing $100 million in the expansion that will create dozens of jobs.

Booz Allen expanding in Oklahoma
Booz Allen Hamilton is adding 240 jobs at its facilities in Oklahoma. The company will add software developers, data scientists and cybersecurity engineers at its locations in Oklahoma City and elsewhere in the state.

Auto parts maker bringing 150 jobs and $60.9 million to Middle Tennessee
Fuel Total Systems (FTS) officials recently announced plans for a new manufacturing facility in Maury County that will create 150 new jobs. FTS plans to build a 110,000-square-foot manufacturing facility in the Cherry Glen Industrial Park as part of a $60.9 million investment.

Pounds of Plastic chooses Owenton, Ky.
Canada-based Pounds of Plastic, a supplier to the automotive and general manufacturing industries, plans to invest more than $4.1 million and create 54 full-time jobs in Owenton.

Continental Tire is hiring in Mississippi
Continental Tire has begun hiring and training its first employees in advance of its $1.45 billion plant in Clinton making commercial truck, bus and transport vehicle tires by late 2019. The company is hiring about 30 shop-floor operators through the end of the year, with plans to hire a total of 2,500 people by 2028.

Eissmann Group Automotive expands Alabama plant
A Germany-based firm that specializes in car interiors, trim components, shifter modules and other parts, Eissmann Group Automotive has completed a $14.5 million expansion at its assembly plant in Pell City, Ala. The project is adding 200 workers to the company’s St. Clair County workforce.

Auto supplier to create 100 jobs in Troup County, Ga.
SEWON America, a supplier to the automotive industry, will create 100 jobs and invest $160 million in expanding its North American headquarters and manufacturing plant in LaGrange. New jobs will include positions in supervision, production and warehouse operations.

North Carolina approves incentives for tire maker’s $200 million project
Bridgestone could get up to another $30 million from taxpayers if it keeps 2,000 jobs and invests at least $150 million in improvements within a six-year period at its eastern North Carolina factory. A state panel approved grants of up to $3 million a year for 10 years to Bridgestone Americas, which is updating its Wilson tire plant.
Joint venture expands fiber production in Spartanburg, S.C.
Huvis Indorama Advanced Materials, a joint venture between Thialand’s Indorama Ventures and South Korea-based Huvis Corporation, will invest $48 million to launch new manufacturing operations at Auriga Polymers’ campus in Spartanburg County. The new operations will manufacture low melting fiber commonly used in automotive and industrial composites.

Enforge expands manufacturing complex in Albemarle, N.C.
Enforge, a manufacturer of steel-formed suspension and steering assemblies for automotive companies, will invest $4 million to expand its production plant 41 miles east of Charlotte. The company plans to create 44 new jobs.

Poorest county” in Mississippi gets 60 new jobs
Thanks to the expansion of a manufacturing plant in Holmes County, Miss., 60 new jobs will be provided to people in what is called the poorest county in the state. Hunter Engineering is spending $8 million to expand its facility to produce wheel alignment and balancing systems, brake service equipment and other auto repair equipment. The expansion also includes a 500-square-foot workforce training area to support continuous employee development.

Auto parts supplier to add 250 Kentucky jobs
Metalsa announced plans to expand its plant in Elizabethtown, Ky. Metalsa, based in Mexico, is a supplier to automotive manufacturers, and its Elizabethtown facility is one of the largest operations throughout the company.

Mercedes breaks ground on Alabama battery plant
At a groundbreaking ceremony, Mercedes-Benz officials formally marked the start of construction on a 2 million-square-foot plant in Bibb County, Ala., that will supply battery packs for the automaker’s Alabama-made electric vehicles. The battery plant is a key component in a $1 billion Mercedes expansion announced in September 2017. The plan calls for Mercedes to begin producing electric SUVs at its assembly complex in Vance, about seven miles away, at the beginning of the next decade.

Volkswagen could add 1,000 jobs in Tennessee
VW officials say they plan to add a third shift to the automaker’s Tennessee plant, a move that could add more than 1,000 workers. The new hires will help produce the five-seat Atlas SUV next year. Hiring is expected to start this year and continue in 2019.

Wheel Pros eyes York County, S.C.
Wheel Pros, a designer and distributor of aftermarket wheels, plans to establish new manufacturing and distribution operations in the former American Eagle Wheel plant in York County. The $13.9 million investment is expected to result in 275 new jobs.

Vintech Industries to open facility in Newnan, Ga.
Michigan-based Vintech Industries, which makes metal and plastic products including molding, seals and assemblies for auto manufacturers, has purchased a building in Newnan where it plans to begin production in the first quarter of 2019. The project is expected to create 30 jobs initially and eventually more than double that figure.

South Carolina manufacturer expanding with 115 new jobs
MAHLE Behr, a supplier of air conditioning and radiator assemblies, will be expanding its manufacturing operations in Charleston County. The company’s $36 million investment is projected to create 115 new jobs.

Construction is complete on 350-job project in Botetourt, Va.
Construction is complete on the ELDOR Automotive Plant, and the manufacturer is bringing hundreds of new jobs to the Botetourt area. The Italy-based company, which make pieces for ignition systems and other parts, is opening it’s first North American plant in the Roanoke Valley.

Real Truck chooses Ocala, Fla., for HQ
Real Truck, an online truck accessory retailer, will locate its global headquarters in Ocala. The company will undertake a capital investment of $2 million and create 77 jobs.

Auto supplier expands in Lee County, Miss.
Auto Parts Manufacturing Mississippi (APMM) is increasing production in Lee County, investing $100 million and creating 50 jobs. A Tier 1 automotive supplier located in Guntown, APMM produces stamped auto parts, body weld parts and plastic parts. The expansion accommodates increased production for the 2019 Toyota Corolla.

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Michael Randle

Author: Michael Randle