US Auto and Aerospace Industries Move South

The US Auto industry was associated with the Midwest, and much of the aerospace industry was historically on the West Coast. In recent years, much of the US auto industry and aerospace industries have been shifting to the Southern states, for a variety of reasons.

Part of the reason is the Southern states are right to work states. The right to work states have laws preventing employers from only hiring union employees. GM, Volkswagon, and Nissan have plants in Tennessee, while Mercedes, Honda, and Hyundai have plants in Alabama. Kentucky has Ford and Toyota operations. The auto companies wanted to take advantage of lower labor,real estate costs, and lower taxes in the South and not have to worry about employees going on strike. So they set up shop in various Southern states. The first to do this was Toyota. In the 1980s, with foreign imports of cars becoming an extremely controversial issues, Toyota decided to set up operations in the US. This was to avoid tariffs and by making cars here, Toyota could say it was contributing to the US economy. As a contributor to the US economy, Toyota could avoid anti foreigner sentiment. Other foreign automakers such as Mercedes, Volkswagon, Hyundai, and Honda came to the conclusions Toyota did, and similarly decided to open up plants in the South. Nissan opened up a second plant in Mississippi , and now Georgia and South Carolina have auto plants as well. GM and Toyota have plants in Texas . The South’s share of auto manufacturing jobs in the NAFTA region has grown from 16.7 to 18.2 percent from the year 2000 to 2012.

As for the aerospace industry in the South, it too has rapidly grown. The reasons are similar to those in the auto industry. The Southern states are right to work states with cheap labor costs, cheaper real estate costs, and lower taxes. Airbus Industry has made a number of airplane sales to US airlines and transportation companies. Airbus announced that it will open up its aircraft plant in Mobile, Alabama. After workers in Washington, State rejected an 8 year contract that would have insured that the Boeing 777x and its wings would have been built in Washington, Boeing is now looking to build the aircraft assembly plant for this model elsewhere. Boeing is looking at a number of states , many of them in the South. Georga, Texas, and South Carolina are the Southern States in play to get the Boeing aircraft assembly plant.

Manufacturing is coming back to the United States. While the auto and aerospace industry get much of the media attention, manufacturing in a number of other industries from ship building, home appliances, and computers/electronics have set up plants in the South as well.

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