The article begins,
"As Detroit's auto makers seek a government bailout, the resilience of their foreign rivals could vault the South to the forefront of the U.S. car industry.
Foreign makers have been lured to South Carolina, Alabama and other Southern states over the past decade by generous tax benefits and laws that make it easier to build a largely nonunion work force.
Foreign-owned car makers are adjusting to the sales slump with assembly lines that can make multiple models and labor rules that allow faster downsizing.
That labor flexibility has emerged as a key advantage during the industry downturn, allowing foreign-owned plants to rapidly downshift in ways their unionized U.S. competitors cannot. Looser work rules are allowing German automaker BMW AG to lay off up to 733 employees at its Greer, S.C., plant by the end of the year. And Toyota Motor Corp said Wednesday it plans to let go at least 250 people at a Georgetown, Ky., factory in the first quarter of 2009.
Such moves would be largely out of reach for the Big Three U.S. auto makers, which have been saddled with stricter labor rules as vehicle sales have plummeted. Union rules often guaranteed jobs for workers along with generous benefits and wages that surpass those of most other U.S. manufacturing sectors.
The foreign manufacturers -- which are also reaping benefits of advanced production lines and a more popular lineup of models -- are positioned to grab market share from domestic competitors when demand revives. "If the American car companies died, this is what would replace them," said Laurie Harbour-Felax, an auto industry consultant.
Michigan and Ohio are still dominant centers of U.S. vehicle making, producing more than 38% of all cars and trucks in 2007, but Southern states are making gains as foreign car makers add more plants in that part of the country. Four Southern states were responsible for 24% of U.S. production last year, according to Automotive News, a trade publication.
Volkswagen AG, Toyota and Kia Motors Corp., which collectively will benefit from more than $1 billion in government incentives, are pushing through the downturn to complete new factories in Tennessee, Mississippi, and Georgia.
Foreign makers, which currently operate eight plants in the South, have the firm support of many Southern legislators and governors, who have spent much of the past week giving high-profile denunciations of a Detroit bailout. They argue that buttressing ailing U.S. car companies would create unfair competition to foreign makers that have brought thousands of jobs and billions of dollars in investments to the region.
"We shouldn't reward bad business practices made by competitors to the company that is about to employ 2,500 workers coming to my district," said U.S. Rep. Lynn A. Westmoreland (R, Ga.) in an interview. Rep. Westmoreland represents the area around West Point, Ga., where Kia of Korea is building a $1 billion plant set to open next year. At the same time, General Motors Corp. closed a plant in September in Doraville, Ga., that employed 1,000."
I think this is the missing picture of the US auto sector that many in America overlook. And it's fair to say Wagoner, Mulally and Nardelli would like them to continue to overlook this Southern state auto manufacturing success.
Of course, this success looks different than the Detroit failure. It's non-union. And it's owned by auto makers whose headquarters are in other countries. But these plants still employ American workers. And drive economic prosperity in American towns and states.
The nearby map from the article is fascinating. To me, it shows the completion of the original US worker migration up the middle of the country from the South, Kentucky and Tennessee to Chicago and Detroit in the 1940s for war production.
Now, US manufacturing is thriving in the states that gave up population in that initial, largescale northern war and post-war industrialization.
So, when Michigan Senator Debbie Stabenow contends that to lose the Detroit Three auto makers is to lose US manufacturing, this picture shows how totally wrong she is. Simply put, she's lying.
Further paragraphs in the article discuss the economic realities of these Southern car manufacturers. It's not all sweetness and light, but you don't hear the local and state governments complaining,
"And in Vance, Ala., Daimler AG's Mercedes-Benz factory slowed one of its assembly lines, cut back shifts and offered buyouts to its 4,000 workers. The cutbacks are the most severe for Alabama since the state began attracting foreign car makers, but "flexibility has allowed them to manage their operations in a way that will make them competitive in the long term," said Steve Sewell, executive vice president of the Economic Development Partnership of Alabama.
After a 12% drop in sales in October, Toyota this week said it would suspend assembly work at all North American plants for two days in December and trim output at plants in Indiana, California and Kentucky. Though it could delay the 2010 startup of its $1.3 billion plant in Blue Springs, Miss., which will build the Prius hybrid vehicle instead of the Highlander SUV it was originally meant to produce, "we are committed to the project," said Mike Goss, a spokesman. "The concrete is poured and the roof and walls are up and the equipment has been ordered." "
These US states- Alabama, Mississippi, Georgia, South Carolina, Tennessee- are among those with the lowest incomes, educational levels, and economic opportunities. It is simple Schumpeterian dynamics that US jobs and economic manufacturing activity should flow to those areas most able to compete, and most in need of the opportunities.
Moreover, the fact that these states can provide the necessary labor at lower costs suggests just how unnecessary much of the self-proclaimed value the UAW union workers actually provide a modern auto manufacturer.
It's an eye-opening article and graphic presentation of the shifting sands of US auto production. Even a few billion dollars of uncollectable loans aren't going to change the long term economics of this picture.
Detroit is finished as a viable long term future home of significant US auto production.
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