The recent headlines surrounding the global auto sector describe restructuring, layoffs, turmoil and declining profits: Ford is dismantling jobs and plants in Europe, GM is making sweeping cost cuts by ceasing production at five North American plants and discontinuing several car models.
But in Tennessee, there has been a wave of good news. General Motors this month revealed its newest addition to its Spring Hill plant: the seven-seat Cadillac XT6. The Detroit-based automaker is investing nearly $300 million in Tennessee to produce the SUV and adding 200 new positions. In Chattanooga, Volkswagen plans to invest $800 million and hire another 1,000 workers to produce the company’s first electric vehicle.
Matt DeLorenzo, senior managing editor with Kelley Blue Book, said Tennessee’s history as a right-to-work state is part of what has lured automakers.
“If you go back in Spring Hill’s history as a Saturn plant, they were a lot more accommodating than the other traditional UAW units in terms of structuring their work deals,” DeLorenzo said. “That has made the state an attractive place for manufacturers to build.”
Bob Rolfe, commissioner of the Tennessee Department of Economic and Community Development, said the state’s right-to-work status, coupled with the lack of state income tax and business-friendly reputation, have nurtured an automotive industry that employs more than 135,000 people in the state.
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“The fact that Tennessee is home to approximately 900 automotive companies bodes well because it has really become a part of the DNA, and when we look at our ecosystem in the automotive sector, we just have a fantastic presence,” Rolfe said.
But GM officials say the decision to expand in Spring Hill was driven largely because of the type of vehicles the plant makes. Consumers are buying more SUVs and crossovers, which GM produces in Tennessee, said Ken Knight, executive director of the Spring Hill GM plant.