Tennessee’s auto industry well positioned for the future

  • Former US Senator Lamar Alexander was governor of Tennessee when Nissan (in 1980) and General Motors (1985) announced they would build Tennessee’s first auto and truck assembly plants.

Will Tennesséens have as many automotive jobs over the next 40 years as we have had over the past 40 years?

Ford Motor Company’s Sept. 27 announcement that it will spend $ 5.6 billion to build electric truck and electric vehicle battery assembly plants employing 5,700 people near Memphis is another reason the answer could be “yes”.

The first reasons were Nissan’s announcement in 1980 that it would build trucks in Smyrna, General Motors’ decision in 1985 to set up its Saturn plant in Spring Hill, Nissan’s move from its North American headquarters to the California to Williamson County in 2005 and Volkswagen’s choice of Chattanooga. for its manufacturing facility in the United States in 2008.

Forty years ago, Tennessee had only one major auto supplier, the Ford Glass plant in Nashville, and was the third poorest state in family income. Nissan, GM, and Volkswagen – along with automakers who have moved to neighboring states – have attracted more than 900 suppliers to 88 of Tennessee’s 95 counties.

Today, the state’s auto sector provides one-third of all manufacturing jobs in Tennessee, or about 140,000. They are the main reason why Tennessee family incomes have grown rapidly.

Following:Ford’s Investment in Memphis Regional Megasite Turns Tennessee into Global Automotive Power | Editorial

Why there is uncertainty about the future

Ken Loveless of NKC Millwrights uses a blowtorch to complete a joint in a metal grid on June 6, 1991 that will run along the new assembly line, as part of Nissan's $ 500 million expansion of the Smyrna, Tenn plant.

The concern about the future is that with autonomous vehicles, the shift from gasoline-powered vehicles to electric vehicles, and the number of Americans driving, no one can know who will drive what in the next 40 years.

Electric cars have fewer parts than gasoline vehicles. Does this mean that many Tennessee auto jobs are going to disappear?

The best assurance that there will be new auto jobs to replace the dying jobs is that the four Tennessee automakers and their suppliers will have the resources to figure out what Americans will drive and buy, and then produce those vehicles. .

Ford says its 3,600-acre West Tennessee mega-campus will be “the largest and most efficient plant in Ford history.”

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Nissan’s Smyrna plant is the largest automotive assembly plant in North America. The Spring Hill GM plant is the largest in North America. Volkswagen is the largest automobile manufacturer in Europe. And Toyota-related supplier DENSO, with 6,100 employees in Maryville, Athens and Jackson, is at the forefront of determining how autonomous vehicles and electric vehicles will work.

These companies will want to buy their batteries and other parts close to their homes rather than risk supply chain issues with China and other countries.

How Tennessee and Kentucky Came Central for Automobile Manufacturing

Tennessee Gov. Bill Lee, center, chats with Ford Executive Chairman Bill Ford, left, and Jim Farley, Ford CEO, right, after a presentation on the plant scheduled to build F-Series electric trucks and batteries to power future electric Ford and Lincoln vehicles on Tuesday, September 28, 2021 in Memphis, Tennessee.  The Tennessee plant is to be built near Stanton, Tennessee.

American industries tend to cluster: brokerage firms on Wall Street, winemakers in Napa Valley, internet companies in Silicon Valley, healthcare companies, and songwriters in Nashville.

For most of the last century, the American automotive cluster has been in the Midwest where the automobile was invented. But that group moved to Tennessee and other southeastern states.

This movement began in 1980 with the announcement of Nissan. The American population had gradually moved south and west, placing its center in Kentucky and Tennessee.

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The central location is important because it reduces shipping costs for heavy vehicles. In addition, at that time, no state north of Tennessee had a right to work law.

This made Tennessee more attractive than Kentucky because Nissan didn’t want to get tangled up in labor issues that had driven up prices and lowered the quality of cars made in the Midwest. (See David Halberstam’s 1977 book, “The Reckoning.”)

Following:Ford workers at 4 new factories won’t automatically be UAW members: here’s why

Three advantages in Tennessee for successful growth in the automotive sector

IN ADDITION TO A RELIABLE WORKFORCE, Tennessee offered three other advantages.

First, during the 1980s, the state enacted four major highway programs – paid for by doubling the gasoline tax and incurring no highway debt.

Senator Lamar Alexander

In 1991, trucking publications claimed that Tennessee had the best four-lane highway system in America, which manufacturers wanted for just-in-time delivery of parts.

Second, a steady stream of heads of state – both Democrats and Republicans – worked together to provide a stable, supportive business environment and a well-run state with low taxes.

A third advantage was VAT. As other states experience progressive blackouts and high priced electricity, TVA offers large amounts of reliable 60% carbon-free electricity with tariffs in the lower 10% of the price for major industries. .

TVA and Governor Bill Lee deserve credit for winning the competition for the Ford plant. No one knows who will be driving what 40 years from now. (The last idea is a flying aerocar, on “The Jetsons” television). But the Tennessee group of auto manufacturers and suppliers is well positioned to envision the future and continue to increase family incomes.

Former US Senator Lamar Alexander was governor of Tennessee when Nissan (in 1980) and General Motors (1985) announced they would build Tennessee’s first auto and truck assembly plants.

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