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Diversity Is Spice of Tennessee's Economic Life

Volunteer State welcomes high-tech while maintaining its traditional manufacturing roots.


	[ 5/1/1999 ] By: Rachael Hedgcoth
	[ 0 Talkbacks / Add Talkback ]

For many musicians -- notably country -- the road to Nashville is paved with hopes and dreams of what could be.

But for Ucar International, the path was paved with lower operating costs, proximity to the Nashville International Airport, and company ties to the region.

Ucar, the world's largest producer of graphic and carbon electrodes for steelmaking, is moving its headquarters to Nashville from Danbury, Conn.

The company, which has 5,200 employees worldwide, expects to hire up to 50 people for its new Nashville headquarters. The facility will house functions including investor relations, human resources, legal and accounting. Ucar is leasing 20,000 square feet in a new office building in Nashville.

The move, announced in late September of '98, is part of a restructuring plan that is expected to save the company about $330 million over the next three years. The company wants to centralize corporate operations near its manufacturing operations in the United States and Latin America in order to save money.

"We were in a pretty high cost situation in Connecticut," said Gilbert Playford, Ucar's chief executive officer and president.

The company already has Tennessee manufacturing plants in Columbia, Clarksville, and Lawrenceburg.

Dell Headlines High-Tech Success
One of Tennessee's most recent high-tech successes came on April 1, this year, when Dell Computer Corp. announced it would be expanding into the Nashville area.

The company is in a high-tech race to catch up to its top two competitors, Compaq and IBM.

The new facility, to be located at a yet-unnamed site, follows a string of global Dell expansions over the last 16 months.

"As long as you pay them a decent wage, money is not the issue with our employees as much as quality of life. They want to live here."

-- David Yates, senior vice-president, Science Applications

For Toronto-based electronics manufacturer Celestica Inc., Nashville's access to shipping routes was a major lure.

Celestica has set up shop in a 150,000 square foot facility in La Vergne, located on the eastern edge of Nashville.

In May of last year, Celestica was awarded a share of Hewlett-Packard's commercial personal computer assembly business in North America.

The company's decision to locate in the Nashville area was close on the heels of Hewlett-Packard's June announcement of a new 625,000 square foot distribution facility in Memphis.

Work Force Key to Science Applications' Expansion
In Oak Ridge, located just west of Knoxville, it's the work force that is keeping Science Applications International Corp. firmly planted.

Science Applications, which has been in Oak Ridge for over 20 years, recently won a $72 million information technology services contract for Lockheed Martin Energy Systems. San Diego-based Science Applications plans to create up to 1,100 jobs over the next five years.

The company is constructing a second building adjacent to its current site. The new building will be at least 83,000 square feet and will cost between $10 and $15 million.

Worker turnover for the IT staff based in Oak Ridge is about 5 percent a year, according to David Yates, senior vice president of the company's information technology solutions group.

"It doesn't mean we can hire high-tech workers cheaper, but it does mean we can retain them," Yates said. "As long as you pay them a decent wage, money is not the issue with our employees as much as quality of life. They want to live here."

In the company's Washington, D.C., office, the turnover rate soars to nearly 25 percent a year.

Sustaining Automotive Success
In northern Tennessee's Clarksville, Hendrickson Trailer Suspension Systems opened its doors for business in February of this year.

The company, a leading manufacturer of heavy-duty suspension systems, anticipates a total work force of 100 by year's end at its Clarksville facility.

"Clarksville was chosen because it has a good, educated, and well-motivated work force, a good quality of life, and this 25-acre site was available in the industrial park," said plant manager Kirk Steer.

Did You Know?
Tennessee has the second-largest inland port in the United States, located on the Mississippi River in Memphis.

In the fall of '98, Bosch Braking Systems announced plans for a $40 million expansion at its Clarksville facility.

The company intends to construct a 120,000 square foot building and add up to 100 employees in the next 18 months.

Bosch is a worldwide supplier of automotive products and manufactures a variety of brake products for General Motors and Chrysler.

The expansion will enable the plant to manufacture a new component used in front and rear brake systems.

"By the end of 2000, we expect to increase employment to about 400," said plant manager Freidrich Neuhoff.

Bridgestone/Metalpha U.S.A., an-other automotive supplier giant, also announced expansion plans in mid-1998.

A $50 million, 130,000 square foot expansion is underway at the company's Clarksville facility.

In another auto-related arena, the foundry industry is alive and well in Tennessee.

Chattanooga's largest foundry, Wheland Foundry, one of General Motor's largest suppliers, is in the midst of a $35 million plant expansion.

Wheland supplies parts for almost half of all the cars and light trucks built in the United States.

Chattanooga and Hamilton County stepped up to the plate last year when Wheland was deciding where to expand to supply a new General Motors contract. Wheland was offered a property tax abatement, which forgives half of the taxes due on the company's proposed plant improvements for the next 10 years.

"City planners realize that as important as the service industry has become, you still need a strong manufacturing base," said Gordon P. Street, president and chief executive officer of Wheland. "Chattanooga has offered us the encouragement we wanted.

"Will we still be here in 30 years? I certainly hope so. We just made a multi-million dollar election to stay here."

1998's Top Five Relocations to Memphis
Company	New Jobs	Project Function	Sq. Feet	Investment
Pan American	43	Flight Simulator	32,000	$25,625,000
Glaxo Wellcome	73	Distribution	120,000	$25,100,000
Hewlett-Packard	514	Distribution	625,000	$25,000,000
FedEx Corp.	171	Office/Headquarters	90,437	$17,606,700
TeleCorp PCS	70	Operations Center	16,000	$16,500,000

Tennessee Facts & Contacts
DEMOGRAPHY AND ECONOMY

Population: 5.3 million
Capital: Nashville
Three Largest Cities: Memphis, 596,725; Nashville, 535,036; Knoxville, 167,535
GSP: $126 billion
Per Capita Income: $21,949
Percentage of Private Manufacturing Labor Force Organized: 10.9%
Right-to-Work State: yes
Unemployment Rate: 4.4%, (Feb. '99)
Average Hourly Manufacturing Wage: $12.10
Population Age 25 and Over With Bachelor's Degree or More: Nashville, 24.4%; Memphis, 17.5%; Knoxville, 21.7%
EM's Education Quotient for the Largest School Districts: Nashville-Davidson, Green; Memphis, Green; Knoxville, Green
Corporate Income Tax Rate: 6.0%
Percentage Employment by Sector: construction, 4.8%; manufacturing, 20.0%; mining, 0.18%; services, 26.2%; transportation/utilities, 5.5%; retail, 23.6%
Primary Industries: transportation equipment, electronic & electrical equipment, printing & publishing, industrial & commercial machinery

BUSINESS ASSISTANCE

Major Financial Incentives: Tennessee Industrial Infrastructure Program (TIIP), Community Development Block Grant Program (CDBG) and the Industrial Access Program
Worker Training Programs: Tennessee Industrial Training Services, Tennessee Job Skills Program, Tennessee Dept. of Workforce Development
Enterprise Zones: Nashville and Memphis

FOR MORE INFORMATION CONTACT

William Baxter, Commissioner, Tennessee Dept. of Econ. and Community Development, 320 Sixth Ave. North, Eighth Floor, Nashville, TN 37243, (800) 251-8594, fax (615) 741-7306

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