The Corner

U.S. Auto Industry Booms in Right-to-Work South

Tennessee, Alabama, and Kentucky boast the strongest auto-manufacturing industries in the country, according to newly released rankings from the corporate news magazine Business Facilities. Tennessee took the top spot on the combined strength of a General Motors plant in Spring Hill, a Volkswagen plant in Chattanooga, and a Nissan plant in Smyrna; all three factories are expanding operations in response to growing worldwide demand for cars and trucks. Alabama narrowly finished second – the Cotton State is home to Mercedes-Benz, Honda, and Hyundai plants, all of which are also ramping up production. And Kentucky finished third, thanks to growing Ford and Toyota operations. (The rankings, of “Automotive Manufacturing Strength,” were not based on just overall auto production, but took into account industry trends, growth potential, and current production statistics.)

All three top states have right-to-work laws, which prohibit employers from barring non-unionized workers, tending to weaken unions substantially. Longtime auto-industry capital and United Auto Workers stronghold Michigan passed a right-to-work measure late last year.

Ford and GM, by the way, both released their second-quarter earnings reports this week — and both of the iconic Detroit firms beat investor expectations, with Ford in particular showing an impressive profit. As the Wall Street Journal notes, “In the U.S., auto makers have outperformed the overall economy for the past several years. Auto output accounted for nearly 20% of the growth in the U.S. GDP since the second quarter of 2009, said Ford economist Ellen Hughes-Cromwick.”

While Detroit’s government languishes in bankruptcy, Ford, GM, and Chrysler have all fought their way back from the brink of destruction (albeit with taxpayer help, in the latter two cases), in large part by slashing pension costs and seeking out competitive business climates not dominated by unions and their political cronies. Those hoping to effect a similar turnaround in the Motor City itself might take note.

Via the Birmingham News.

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