Tennessee: Positioned to compete
Thursday June 25, 2009
After landing three billion-dollar investments since last July...
After landing three billion-dollar investments since last July -- including two in Southeast Tennessee -- Economic and Community Development Commissioner Matt Kisber is working to harvest upstream and downstream business ties to those investments for the Volunteer State.
"To have an eight-month period where we had Volkswagen, Hemlock Semiconductor and Wacker Chemical each announce projects in excess of $1 billion apiece is a trifecta that I don't think anyone imagined that the state of Tennessee would win," Mr. Kisber said. Tennessee lured more than $5.4 billion in new capital investment in 2008 and is on pace for another multibillion-dollar recruitment year in 2009, Mr. Kisber said. Investments from industry recruited or expanded since 2003 come to more than $27.5 billion, adding 167,419 jobs.
To recruit Volkswagen, state and local governments offered the equivalent of $557 million in tax breaks, training assistance and infrastructure investments -- the largest incentive package ever offered for a U.S. auto plant.
After a National Governors Association meeting last year, Gov. Bredesen asked his recruiters to look at the emerging clean-energy industry. Mr. Kisber said the state had a start in the solar field. Sharp Electronics Corp. opened a solar panel plant in Memphis in 2003, and AMA Glass Co. in Kingsport supplies parts for solar devices.
A new study found that Tennessee was one of only three states that had both above-average growth and above-average per capita employment in green energy jobs from 1998 to 2007 -- the most recent year for which data is available. Only Colorado and Oregon also enjoyed such growth, according to a study released last week on green energy jobs for the Pew Charitable Trusts.
Last year, Tennessee agreed to absorb any carbon emission costs for new green industries. This year the Bredesen administration is looking to extend job credits to companies that might buy the polysilicon parts Hemlock and Wacker Chemical will make for solar panels.
Tennessee created an integrated supplier credit to help Volkswagen by extending job credits to include incentives for tier one suppliers locating near the plant. The Hemlock and Wacker plants won't require such supplier links.
The value chain in the automotive industry comes primarily from suppliers to the assembly plant, but with Hemlock and Wacker the value will primarily be added by all of their customers. The proposed new integrated customer credit is completely novel and the only tax credit like this in the country.
Tennessee also is positioning itself for a revival in nuclear power. Alstom Power is undergoing a $280 million expansion of its Chattanooga complex that will add 350 jobs. Nearby projects by Westinghouse Electric, Chicago Bridge & Iron and Babcock and Wilcox will generate hundreds of other construction, fabrication and engineering jobs in Southeast Tennessee.
While Tennessee continually has sweetened its incentive package for new industry, the state still enjoyed the highest per capita growth in business taxes in the Southeast from 2003 to 2007.
Source: Associated Press
