LEXINGTON, Ky. — After years of seeing their traditional auto industry economic base slip away to the South, many Great Lakes towns and counties, including some in Ontario, joined forces to learn how to become more competitive.
The resulting Automotive Communities Partnership, created in 2003 through the Center for Automotive Research in Ann Arbor, Mich., has attracted members from economic development agencies and corporations in Illinois, Indiana, Michigan, Ohio and Ontario, sharing industry intelligence to recruit and retain automotive jobs.
But this summer, the partnership open-ed its membership to communities in the South. Its first — Randolph County, N.C. — is the location that came close to landing the US$1.6 billion Toyota-Mazda joint venture auto project this year.
Automotive Communities Partnership Director Bernard Swiecki, 43, spoke about expanding nationally with News Editor Lindsay Chappell here during a meeting of the Kentucky Automotive Industry Association.
Q: Why is the auto communities program expanding to include the South?
A: We were created to focus only on assisting the auto industry of the Great Lakes region, including Ontario. The industry had two stories going on at that time. The Detroit 3 were losing market share and shedding capacity. And that capacity was being replaced by new capacity in the South.
But things are different today. That great shift in production has stabilized, really since the shakeout of the Great Recession. And we have a more stable outlook today. There are still big differences, but economic developers in Alabama are now facing some of the same challenges in holding on to the auto industry as their competitors in Ohio or Michigan. We think the same program can help everybody.
In past years, and maybe still today, there was animosity among traditional industry communities toward the Southern states. There was an attitude of "They're stealing our auto industry. Shame on them."
There definitely was. The communities were also somewhat mistrustful of the auto companies. There was a feeling that the companies were playing cities and states against each other to maximize the incentives they could get.
Is that what brought Automotive Communities Partnership members together in the first place — to organize against the incentive packages being offered?
No. That wasn't it. The program was about bringing disparate stakeholders together to better understand what was happening. It was about better integrating industry and their local communities to help both sides. There will always be competition among the member communities. But we realized there was a precompetitive level where providing more information could help everyone equally. If everyone could get better information, have better interaction with industry, they could all benefit and we could increase the likelihood of a new plant coming to the United States or Canada.
What would motivate a county in North Carolina or Kentucky to cooperate with cities and states in the Great Lakes region, when those entities don't want them to recruit the industry?
They want to benefit from the same information that the others have. If I were interested in recruiting the auto industry, I'd want to know what information my rivals are getting. What advantages are they getting that I don't have?
The information can only improve your chances of winning a project. It also helps you retain and expand what you've got. But it does improve your chances for winning investment.
Economic developers in the Great Lakes have often been disdainful of the large public incentive packages that Southern states offered to recruit automakers. Is there still a desire to roll back the incentives competition?
No, incentives are here to stay. But for us, it's a question of targeting a project more effectively by knowing the details of it. For example, if you're talking to a company and you know that it's going to be a just-in-time supplier, and you know it will have a delivery window of "X," then when the company tells you that it's considering an alternative location in Mexico as an option, you can know that they're bluffing — and calculate your incentives accordingly.
That information doesn't guarantee that you'll succeed in bringing the project to your particular community. But you can at least know that you won't risk losing it to China or Mexico.
There have been proposals for rival cities and states to work together to recruit auto industry investment. Does that have a chance to succeed, or do local politics get in the way?
We've seen a slowly growing awareness of that idea in the auto industry, of not just cooperating across state lines but even within a state. But it requires changing the way local political jurisdictions see the world. Auto companies don't make business decisions based on county-to-county limits. The county line is transparent to them. They don't see state lines as a boundary. Their supply chains straddle all jurisdictions. So if you can adjust your economic development approach to be much more regional, then you're seeing the world through their eyes.