Week of February 16, 2004
from Site Selection's exclusive New Plant database
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Aisin's 400-Employee Automotive Plant Headed for EastBy JACK LYNE, Site Selection
Executive Editor of Interactive Publishing
CLINTON, Tenn. Tennessee's broad-based play for Aisin Automotive Casting (www.aisinauto.com) narrowed in the end to produce a small city's biggest-ever recruiting success. Aisin has picked Clinton, Tenn. (pop. 9,409), for a US$67-million, 280,000-sq.-ft. (25,200-sq.-m.) engine-parts plant that will employ 400 workers by 2007.
"Jim Cooper really hit a home run with the Aisin project," Anderson County Mayor Rex Lynch said in announcing the project, which will be located some 19 miles (30 kilometers) northwest of Knoxville. "It's big news for Anderson County and Clinton, and it's the biggest industry we've landed here."
Cooper, president of Anderson County's Melton Hill Regional Industrial Development Association (www.clintontn.net/MHRIDA/Anderson_county.htm), called the Aisin plant "the kind of project you see every 20 or so years. It will have a very substantial impact on this community's economy." In fact, Aisin suppliers and potential spin-off operations have already contacted the county about nearby sites, he said.
Aisin "performed extensive feasibility studies" on six sites in three states before picking the Tennessee location, explained Aisin Automotive Casting President Ken Tsujimura (who didn't name the other sites that were considered).
Regional Approach Pays OffAnderson County, however, wasn't initially one of the sites that the company was considering. Instead, Aisin's Volunteer State focus was on a neighboring county, Knox.
That interest spurred one of the project's many cases of cross-agency cooperation. Knox County officials determined that their locale didn't have a suitable plant site for the subsidiary of Japanese auto parts manufacturer Aisin Seiki Co. (www.aisin.co.jp). They then brought other economic development agencies in the region into the Aisin hunt.
That move was consistent with the area's Jobs Now strategy. The Jobs Now program promotes the entire East Tennessee region. The initiative's ambitious goals include creating 3,500 new jobs in five years.
"Obviously, we'd like to get jobs in Knox County," Knox County Mayor Mike Ragsdale said after the Clinton project was announced. "But if we can't get them in Knox, we want them in adjoining counties. That's why we've taken a regional approach with Jobs Now. While the jobs may be in Anderson County, many of those people will likely live and shop in Knox County. So we all benefit."
Incentives Come from State,Cooperation was also evident in the project's incentive package. Valued at some $4.8 million, those subsidies include support from state, local and federal agencies, as well as the Tennessee Valley Authority.
Local, Federal and Utility Sources
"One of the main factors in Aisin's decision was the support and dedication from the state of Tennessee, TVA, and the cities of Clinton and Oak Ridge," Tsujimura said.
The largest chunk of Aisin's incentives is coming from the Tennessee Department of Economic and Community Development (TDECD at www.tnecd.gov). The TDECD is contributing some $3 million, including $800,000 in job-tax credits, $750,000 for infrastructure improvements and employee-training funds, and $500,000 in tax credits for industrial machinery purchases.
Clinton officials provided another major incentive for Aisin: the company's 48-acre (19-hectare) plant site in the Clinton/Interstate 75 Industrial Park. The city gave Aisin the tract, which was valued at about $22,000 an acre.
Another $300,000 in project backing is coming from the TVA. "We're committed to providing the Tennessee Valley not only with affordable reliable electricity, but also with jobs," TVA Director Bill Baxter said in announcing the group's support. (The utility late last year also provided lower power rates for 1,500 major manufacturing operations in its service area, covering parts of seven states. As noted in the IAMC Insider in the March 2004 Site Selection, TVA in October of 2003 gave medium-to-large industrial customers a 2-percent rate reduction.)
Further aid for Aisin's project is coming from Clinton and Anderson County, which are each contributing $225,000 for site and infrastructure improvements; that aid is coming from the city's and county's Appalachian Regional Commission funding. The city of Oak Ridge is putting up another $90,000.
In addition, both the city and county are expected to offer Aisin 10-year, 25-percent property tax abatements.
Company Has Expansion OptionIn some respects, the Clinton plant will be almost a mirror image of Aisin Automotive's other U.S. facility in London, Ky. The Tennessee facility's initial footprint and the size of its work force will be the same as at the Kentucky operation.
The company, however, has put a piece in place for further expansion in Clinton, Tsujimura explained. Aisin has taken an option on 37 acres (15 hectares) in the Clinton/Interstate 75 Industrial Park that are adjacent to its plant site.
And the company is already discussing acquiring that acreage to enlarge its operation, said Tsujimura. That expansion would increase the Clinton plant's total employment to more than 600 workers, he added.
Aisin Seiki Co., Aisin Automotive Casting's parent firm, is part of the Toyota family of companies. But Aisin Seiki's worldwide operations supply auto parts not only to Toyota, but to Honda and Nissan as well.
The Clinton plant, though, will focus on Toyota. The operation will make engine components including oil pumps, pistons and water pumps, for Toyota's Camry, Tacoma and Tundra models. The West Tennessee facility will house some $45 million in equipment, including a full-process die-casting operation, company officials said.
Project Construction on Fast TrackAisin hasn't yet named which Toyota operations will be supplied by the new Tennessee plant, which will sit about one mile (1.6 kilometers) from the interstate. Toyota subsidiary Bodine Aluminum has an engine-block plant in Jackson, Tenn., 301 miles ( kilometers) to the west. Toyota also has a V8 engine plant in Huntsville, Ala., some 218 miles (349 kilometers) southeast.
Aisin is fast-tracking construction with what Cooper called "a pretty aggressive timetable." The company will break ground in Clinton as soon as possible, aiming to open the plant as early as October.
Aisin is the fifth automotive supplier to announce a new Tennessee location over the last 12 months, said TDECD Commissioner Matthew Kisber. Tennessee is home to almost 950 automotive-related companies, with an annual payroll of some $6.3 billion, he explained. Collectively, those companies employ some 154,000 workers. That makes up a third of the state's manufacturing work force and 5.7 percent of Tennessee's total employment.
"Tennessee's automotive sector remains a powerful industry for attracting highly skilled quality jobs to Tennessee," Kisber said. "We have become a destination state for this industry due to our experienced and skilled work force, our centralized presence, and the positive business climate we offer."
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