Jack Weaver can point to a cannon on a Civil War battlefield from the comfort of a shaded bench in his backyard. The noise of cars and trucks at the intersection in front of his farmhouse red home is what makes him speak about his small town.
The retired dairy farmer has lived in Spring Hill since he was a child. The once quiet town in middle Tennessee has grown into a suburb. A population boom in the state as well as the introduction of new industries have poured billions of dollars into the state.
Weaver complains about cars hitting his fence and the traffic General GM has brought since it opened in 1990. I don't oppose development at all. I'm not I believe a man does what he wants with his land.
Detroit is the city that puts the world on wheels, but it is towns like Spring Hill and others in neighboring states that are attracting the most investments from automakers in recent years, as production priorities shift to a battery- powered future with electric vehicles.
The vehicles are heavier and more cumbersome to ship than traditional models, which is why companies want to build them there. Facilities for battery production should be close by to avoid supply chain and logistical problems.
In the 1950s and 1960s, Ford Motor and Nissan Motor established plants in Kentucky and Tennessee, respectively. Through the 1990s, other companies followed suit. There have been more announcements since then, including recent ones by Rivian automotive andHyundai Motor.
As more companies look to the American South, the investments are changing the landscape of towns across the region. Early advantages over their northern competitors are earned by companies that set up shop in the South.
There are a number of reasons why auto executives are investing in the South. All-in lower pay for workers, millions in tax breaks and a largely non-unionized workforce are some of the benefits that southern states offer.
Unique challenges are brought by the shift. The Motor City has to contend with preservation of historic plantation farms, unearthing of slave burial grounds, and pushback from citizens and local politicians who aren't used to the traffic or industries.
According to The Center for automotive Research, automakers have announced over forty billion dollars of investments in southern states since the beginning of the year. For the first time, the South outpaced the Midwest for announced investments.
The Midwest states of Michigan, Ohio and Indiana saw over thirty billion dollars in announced investments in the same time period.
Most of the money heading south has come from traditional automakers such as GM and Ford, as well as EV startup Rivian, according to a new report. Volkswagen and Nissan are expanding their operations in the South in order to produce new electric vehicles.
"We are basically undergoing the single biggest industrial transformation, I would say, not to understate it, in the history of America" Right now, it is happening in this area.
Scott Keogh of Volkswagen of America at the VW plant in Chattanooga, TN, June 8, 2022.The potential for new assembly and battery facilities that the company is scouting locations for is one of the top priorities for the company. Incentives, tax support, labor and workforce training are some of the key elements used by executives.
In September, Ford announced an $11.2 billion investment in new vehicle and battery plants in Tennessee and Kentucky.
"We want to work with states who are excited about doing that training and giving you access to that low energy cost."
The lowest electricity prices in the country can be found in Tennessee. As of May, the state's average industrial price of electricity was 6.31 cents. Michigan's industrial energy cost was higher than the national average.
According to the U.S. Energy Information Administration, Mississippi was under 7 cents, while South Carolina was under 9 cents.
The cost differences add up fast. The plants will have an annual capacity of 43 megawatt-hours. Tens of thousands of dollars are saved per year because of the 1000 kilowatt-hours of electricity in a megawatt-hour.
The expansion south is expected to continue for a long time. According to the global consulting firm, southern states such as Alabama, Georgia, and Kentucky will see $58 billion in electric vehicle investments over the course of the next five years. It is four times the amount of money expected in the Midwest states.
A managing director in the automotive and industrial practice at AlixPartners said that there is a lot more interest and activity happening in the southern states.
The automotive industry is a priority for Tennessee and Georgia because of the supply chain jobs that follow. Electric vehicles help level the playing field for new investments.
Pat Wilson, commissioner of Georgia's economic development unit said, "This is almost like a seed field of opportunity, as this industry changes because we're building the supply chain in the US for electrification from scratch." There is a lot of chance.
More than 17,800 jobs have been created in Georgia since 2020 as a result of EV-related projects.
According to Tennessee, automotive companies have added more than 43,800 new jobs and invested $16.5 billion in private capital in the state in the last four years.
Nissan’s Smyrna Vehicle Assembly Plant opened in 1983, marking Tennessee’s first major auto facility. The plant employs more than 7,000 people are produces a variety of vehicles, including the Leaf EV and Rogue crossover.With billions of dollars on the line and tens of thousands of new jobs, states have offered enormous incentive packages for the companies.
Tennessee approved an $884 million incentive package for Ford that included in-kind services and a grant for training. A new electric truck plant and battery facility is part of Ford's investment.
According to Bob Rolfe, the actions are necessary to compete with others. The state spent years accumulating enough land for an electric vehicle mega site before securing the commitment of Ford.
Every day, we tell our team to keep recruiting. Is it enough. Lewis was going to go to Japan for automotive recruitment. When we hit the next wind shear that's going to be developed around the next recession, the softer the landing will be.
Some people disagree that the automotive industry should expand into rural areas. Last year Rivian announced plans to build a $5 billion plant 45 miles east of Atlanta.
Local news outlets report that people in the rural area are concerned about how it will affect their community. State and local officials have offered Rivian more than a billion dollars in tax breaks.
Haynes Haven is a historic landmark in Spring Hill, Tennessee that has been maintained by GM since the automaker built an assembly plant near the site in the 1980s.Sherman and his troops wreaked havoc in our community. JoEllen Artz told NBC News in May that the company was going to destroy it again. The No2Rivian group has raised over $250,000 and hired Atlanta lawyers to fight the plant. We want it to stay the same.
A unique set of challenges can be involved in building a massive assembly plant.
When GM built its Spring Hill plant, it found a slave graveyard. GM paid for the transportation of the remains to their final resting place.
GM stated in an email to CNBC that when they invest in properties, they are also investing in communities. We try to work with community members to find solutions to fit the unique needs of each situation. In Spring Hill, the unexpected finds became entwined in our own history.
GM has been around the site before. The company built the Detroit-Hamtramck plant in the 1980s and built a Jewish graveyard on the property.
Nissan is said to have moved a graveyard in Tennessee when it built its plant in the early 1980s. Nissan did not reply.
GM maintained and updated a historic plantation in Spring Hill, Tenn. called Rippavilla as part of a deal for land to build an assembly plant in the city in the 1980s.Two historic plantations have been maintained by GM since the Spring Hill Assembly plant was built. The historic horse stables were turned into a welcome center and used for other events. The area is being used for employee parking during the construction of the new battery plant.
The company donated the site across the street from the plant to the city. The Battle of Franklin Trust is committed to preservation and education.
The last owners of the site wanted it to be a historical site. The CEO of the organization said that they did not want to see what happened to Haynes Haven.
When a 10-year deal to maintain the property ended, GM saved $100,000 a year for the next decade. The site is still supported by GM.
The auto industry doesn't have to worry about fighting unions as much as they may have to in the South.
Despite decades of attempts, the United Auto Workers has not been able to organize a non-Detroit auto plant in the South. The union is trying to organize battery plants from GM and Ford in the south.
Ray Curry is the president of the UAW. The piece is about our future. It has been about 86 years.
Nearly 11,000 jobs will be created when Ford builds electric vehicles and batteries in Kentucky and Tennessee.
The decision on whether to unionize the U.S. battery plants will be left to the workers.
The labor cost gap between Detroit and other non-unionized automotive plants has narrowed, but organized labor costs are higher for the companies.
At the end of a current four-year contract between the Detroit automakers and UAW in 2023, the Center for automotive Research estimates average hourly labor costs per worker will be $71 for GM, $68 for Ford, and $65 for Stellantis.
James Rubenstein is a professor at the University of Miami Ohio who specializes in the automotive industry. It is easier to keep the union out of the south.
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