NASHVILLE — The auto industry continues to expand in Tennessee. Volkswagen is investing $840 million to introduce electric vehicle production at its plant in Chattanooga. General Motors committed $300 million to introduce a new Cadillac into production this year at its plant in Spring Hill, where it has spent about $2 billion since 2010. At Nissan's operations outside Nashville in Smyrna — one of the largest auto plants in North America — warehouse and logistics space is going up to bring more of the supply chain closer to the plant.
Tennessee courts a changing industry
Automotive is only one sector for the state's Department of Economic & Community Development. Bob Rolfe, Economic & Community Development commissioner, says the state's diverse economy is also fostering investments in the distribution, electronics, energy, entertainment and tourism sectors. Automotive continues to be a major generator of capital spending and job growth, Rolfe said, but the state must be focused about which projects it goes after. He spoke with News Editor Lindsay Chappell. Here are edited excerpts.
Q: How important is automotive investment in Tennessee today?
A: A whole ecosystem has grown up around the OEMs that have located here — Nissan, GM and Volkswagen. About 140,000 Tennesseans now work in the auto industry, including the 900 suppliers here. They keep coming.
But I'd also say that they keep coming to the entire Southeast, and Tennessee benefits from that. The Mazda-Toyota project went to Huntsville, Ala., but we've already seen three new suppliers come to Tennessee to supply that project.
What's something about Tennessee that continues to attract automotive?
Tennessee doesn't have a state personal income tax. It's one of the few states left that don't. Mitsubishi is moving its North American headquarters here. They're moving 200 jobs here from California, where their people were paying a state income tax.
We also strive to be a business-friendly state and help companies with what they need, in site selection, permitting, roads and work force development.
How is that effort changing?
Automotive work forces are changing. The new projects we're seeing are all about automation, automation, automation. That's a game-changer over time. We believe work forces in the years ahead will be more educated, with an accent on robots and mechanical maintenance, and prepared for the requirements of advanced manufacturing. It looks different from what it was eight to 10 years ago.
Is there a different auto industry coming your way?
Electrification is taking place in automotive, and we're seeing it here. Volkswagen is investing more than $800 million at its plant in Chattanooga to introduce an electric vehicle. Nissan is building EVs in Smyrna. We expect to be part of that discussion.
There's growing interest in developing research areas for autonomous driving. Will Tennessee be a competitor for those?
There's an initiative to build a test track in Middle Tennessee, but our issue is, who's going to fund it? I believe that belongs in the private sector, not taxpayer dollars.
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