From Rust Belt to Sun Belt: How automotive America is heading South
- Andres Vite
- Sep 21, 2023
- 5 min read
Updated: Oct 17, 2023
Cities like Detroit and Cleveland were once the epicenters of the American automotive industry. But in recent years, the industry has shifted to the South, with states like Alabama, Kentucky, and South Carolina emerging as new automotive hubs.
There are a number of reasons for this shift. One reason is that the cost of doing business is lower in the South than in the Midwest. Another reason is that the Southern states have a more favorable regulatory environment for businesses. Additionally, the Southern states have a growing workforce that is eager to work in the automotive industry.
The rise of the Southern automotive hubs has been a boon for the economies of these states. The automotive industry has created thousands of new jobs and generated billions of dollars in new economic activity. The Southern automotive hubs have also helped to diversify the economies of these states, making them less dependent on traditional industries like manufacturing and agriculture.
Here is a more detailed look at the automotive industry in each of these three Southern states:
Automotive growth in Alabama
Alabama's automotive industry is a major driver of the state's economy, supporting over 47,000 direct jobs and generating billions of dollars in economic activity each year. In recent years, the state's automotive industry has experienced significant growth, with new companies investing in Alabama and existing companies expanding their operations.
In 2022 alone, Alabama's automotive industry announced over $3 billion in new investments, which are expected to create over 6,000 new jobs. Some of the companies that have invested in Alabama in recent years include:
Hyundai: Hyundai is the largest automotive manufacturer in Alabama, with a plant in Montgomery that employs over 3,000 people. In 2022, Hyundai announced a $1.1 billion investment to expand its Montgomery plant and add 2,000 new jobs.
Mercedes-Benz: Mercedes-Benz is another major automotive manufacturer in Alabama, with a plant in Tuscaloosa that employs over 3,500 people. In 2022, Mercedes-Benz announced a $1.4 billion investment to expand its Tuscaloosa plant and add 400 new jobs.
Toyota: Toyota has two plants in Alabama, one in Huntsville and one in Troy. The two plants employ over 11,000 people. In 2022, Toyota announced a $350 million investment to expand its Huntsville plant and add 400 new jobs.
In addition to the major automotive manufacturers, Alabama is also home to a number of automotive suppliers, which also play an important role in the state's economy. Some of the major automotive suppliers in Alabama include:
ZF Group: ZF Group is a German automotive supplier that has a plant in Tuscaloosa that employs over 1,000 people.
Bosch: Bosch is a German automotive supplier that has a plant in Huntsville that employs over 1,000 people.
Denso: Denso is a Japanese automotive supplier that has a plant in Florence that employs over 1,000 people.
The automotive industry is one of the most important sectors of the Alabama economy. The industry is a major source of jobs, economic activity, and tax revenue. The state's automotive industry is also a major contributor to the state's quality of life.
Kentucky, the underrated little one
Kentucky's automotive industry is a major driver of the state's economy, supporting over 90,000 direct jobs and generating over $20 billion in economic activity each year. In recent years, Kentucky's automotive industry has experienced significant growth, with new companies investing in the state and existing companies expanding their operations.
In 2022 alone, Kentucky's automotive industry announced over $1 billion in new investments, which are expected to create over 6,000 new jobs. Some of the companies that have invested in Kentucky in recent years include:
Ford: Ford is the largest automotive manufacturer in Kentucky, with four plants in the state that employ over 10,000 people. In 2022, Ford announced a $5.8 billion investment to expand its Louisville plant and add 2,700 new jobs.
Toyota: Toyota has two plants in Kentucky, one in Georgetown and one in Erlanger. The two plants employ over 11,000 people. In 2022, Toyota announced a $350 million investment to expand its Georgetown plant and add 400 new jobs.
General Motors: General Motors has two plants in Kentucky, one in Bowling Green and one in Louisville. The two plants employ over 7,000 people. In 2021, General Motors announced a $2 billion investment to expand its Bowling Green plant and add 1,000 new jobs.
In addition to the major automotive manufacturers, Kentucky is also home to a number of automotive suppliers, which also play an important role in the state's economy. Some of the major automotive suppliers in Kentucky include:
ZF Group: ZF Group is a German automotive supplier that has a plant in Bowling Green that employs over 1,000 people.
Bosch: Bosch is a German automotive supplier that has a plant in Lexington that employs over 1,000 people.
Denso: Denso is a Japanese automotive supplier that has a plant in Berea that employs over 1,000 people.
Many automotive companies have landed in Kentucky in recent years, but these are just a few examples of the many ways that Kentucky's automotive industry is creating jobs and contributing to the state's economy.
South Carolina, a rising automotive hubspot
South Carolina's automotive industry is a major driver of the state's economy, supporting over 55,000 direct jobs and generating over $25 billion in economic activity each year. In recent years, South Carolina's automotive industry has experienced significant growth, with new companies investing in the state and existing companies expanding their operations.
In 2022 alone, South Carolina's automotive industry announced over $1.5 billion in new investments, which are expected to create over 2,000 new jobs. Some of the companies that have invested in South Carolina in recent years include:
BMW: BMW is the largest automotive manufacturer in South Carolina, with a plant in Spartanburg that employs over 11,000 people. In 2022, BMW announced a $1 billion investment to expand its Spartanburg plant and add 300 new jobs.
Volvo: Volvo has a plant in Ridgeville that employs over 4,000 people. In 2022, Volvo announced a $500 million investment to expand its Ridgeville plant and add 600 new jobs.
Mercedes-Benz: Mercedes-Benz has a plant in Vance that employs over 3,900 people. In 2022, Mercedes-Benz announced a $1 billion investment to expand its Vance plant and add 600 new jobs.
In addition to the major automotive manufacturers, South Carolina is also home to a number of automotive suppliers, which also play an important role in the state's economy. Some of the major automotive suppliers in South Carolina include:
Bosch: Bosch is a German automotive supplier that has a plant in Charleston that employs over 1,000 people.
Michelin: Michelin is a French tire manufacturer that has a plant in Lexington that employs over 2,000 people.
ZF Group: ZF Group is a German automotive supplier that has a plant in Gray Court that employs over 1,000 people.
As you can see, South Carolina in experiencing an automotive boom as all these capitals move from the northern region. These are just a few examples of the many ways that South Carolina's automotive industry is creating jobs and contributing to the state's economy.
Conclusion
As you can see, it's not all bad news for the automotive industry in America. While Detroit's former automotive hub is undergoing a process of job elimination and disinvestment. Many of these jobs and capital are simply migrating to the Sun Belt in search of a more strategic and closer location with Mexico, given the interaction of both economies in the automotive industry.
The rise of the Southern automotive hubs is a positive development for the American economy. The Southern automotive hubs are creating jobs, generating economic activity, and diversifying the economies of the Southern states. The Southern automotive hubs are also helping to make the American automotive industry more competitive on the global stage.
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