When cutting the ribbon on the expansion of its first plant in Cartersville in April, Austria’s voestalpine AG didn’t cut corners: Guests were treated to a European musical band, black tablecloths, crystal and a dramatic unveiling of the first products rolling off the new factory line.
And that wasn’t all: The first show transitioned into a groundbreaking for the second phase of its growth, helping voestalpine fulfill its promises of creating 220 jobs in northwest Georgia and potentially leading to even further expansion.
Metal forming may not seem all that fashionable, but the auto sector is becoming an increasingly integral part of Georgia’s manufacturing scene, thanks in large part to European and Asian suppliers supporting foreign manufacturing plants dotting the South.
Investment in Georgia’s auto industry more than doubled in fiscal year 2014 over the previous year, with much of that coming from foreign investors. One-third of Japanese investment in the state was in the auto sector, with that number reaching roughly 50 percent for Korean investment.
German investment in the sector increased 17 percent year-on-year. The state has no German automaker within its borders, but that has worked to its advantage on the supplier front. Being surrounded on three sides by BMW (Spartanburg, S.C.), Volkswagen (Chattanooga, Tenn.) and Mercedes-Benz (Tuscaloosa, Ala.), suppliers can come to one place to reach all three.
Also, without a big plant, Georgia is not seen as officially aligned with any one of the three, said Tom Croteau, the department’s deputy commissioner of global commerce.
Zoom out on the past 24 months and all source countries, and the impact of investment in the auto industry is magnified: Georgia has attracted 48 projects worth 6,000 jobs and $1.6 billion for the state during that period, Mr. Croteau said. All told, the sector accounts for 40,000 jobs across nearly 300 facilities.
Financial incentives play an important role in recruitment, but the real star for Georgia has been its Quick Start program, which provides free, customized workforce training for inbound investors. Dollars run out, but training pays dividends of efficiency well into the future, Mr. Croteau said.
“Three or four years later, they tell us, ‘Quick Start made us successful,’” he said in an interview with Global Atlanta, noting at the time that nine suppliers of Korean automaker Kia Motors alone were utilizing the program.
Georgia’s 11 offices overseas also help. In Japan and Korea, where the offices have existed for 40 and 20 years, respectively, they provide a helpful point of contact for prospects. About 25 percent of auto projects are initiated by those offices, which span the globe, Mr. Croteau said.
He expects continued momentum for the auto sector, especially with more Korean suppliers. Earlier this year, Kia’s West Point plant became one of the fastest ever to make its millionth car.
But the state can also be more proactive. While no specific automotive programs being undertaken at universities, “we have a stronger conversation going on with the university system than ever before about how to be involved with the economic development process,” Mr. Croteau said.
On the vocational side, Gov. Nathan Deal has launched the High Demand Career Initiative to create a space for conversation between the private sector and state agencies tasked with training future workers. The initiative came out with a report Dec. 10 that showed auto manufacturers looking for more apprenticeship and co-op programs with universities.
On the private-sector side, Mr. Croteau hopes to foster the growth of the Georgia Automotive Manufacturers Association and is looking for ways to capitalize on the state’s other target industries. Atlanta, for instance, is burnishing its credentials as a mobility hub, which should help the state’s automotive case in the new era of the connected car.
Of course, there’s no substitute for a handshake. Last October, Mr. Croteau was part of a Georgia delegation that want to Linz, Austria, to thank Voestalpine for its investment in Georgia.
The Pendleton Group is the presenting sponsor of Global Atlanta's Economic Development Channel. Subscribe here for monthly Economic Development newsletters.
