2015 Regional Report: The Southeast

Mercedes-Benz has exited the Jersey Turnpike headed toward Sandy Springs, Georgia. The automaker’s New Jersey-to-Georgia relocation, announced in January, ranks among the year-to-date’s biggest corporate relocation deals, both in value and impact. Mercedes’ decision to transfer at least 800 headquarters jobs to the Peach State hit Garden State business leaders and government officials with the force of a head-on collision, while helping further strengthen the spine of what’s become known as the Southern Auto Corridor.

Mercedes expects to open a new $100 million plant in Georgia in 2017, joining Porsche and Kia Motors in the Peach State’s expanding automotive cluster. Across the state line in Alabama, the car-makers club includes Hyundai, Honda and Mercedes. North in Tennessee, Volkswagen is expanding its Chattanooga plant, while GM and Nissan’s operations are thriving. Toyota and Nissan are ensconced in Mississippi.

Toyota, Ford and GM are major employers in Kentucky. BMW put down South Carolina roots two decades ago. “The auto industry is now located in the Southeastern states,” claims Tom Stringer, who works for BDO. “The corporate takeover is complete. The Southeast absolutely controls the U.S. auto industry.” Cars are not the Southeast’s sole success story. Attracted by lower tax rates and amicable regulatory environments, clusters of financial services, transportation and logistics, call center operations and professional and business services (like temp agencies and staffing services) are growing like kudzu in the region. Employers are lured by the region’s combination of generous incentive packages, right to work laws, newer and well-maintained infrastructure and lifestyle marketing outreach.

For companies seeking low-cost land, low-cost power and low-cost labor, the Southeast offers a trifecta. “The South has all that and a trainable work force,” says Michael Philpot, chairman
of the Southern Economic Development Council. A skilled labor force and training programs for workers help close many relocation deals. “The Southeast holds up very well in terms of site selection,” says Betty McIntosh, senior managing director of Cushman Wakefield’s Business Incentives Practice. McIntosh credits the region’s thriving business networks, including many active chambers of commerce; the collaborative, rather than competitive, attitudes of many local economic-development officials, and the resources offered by regional power authorities.

“You never have to worry about a client being ignored by the local economic development community,” she notes. The attention clients receive “proves southern hospitality is no myth.”