EconSouth (First Quarter 2001)

Recent events and trends from the six states of the Sixth Federal Reserve District
Alabama Alabama
Lockheed Martin will expand its Troy plant and add about 150 jobs as the result of a new defense contract for high-altitude missiles. Also, Mobile Aerospace Engineering, an aircraft maintenance company that converts passenger jets into freight carriers, is adding 200 jobs as part of an expansion in 2001.
Toyota plans to build a $275 million engine plant in Huntsville. The plant will initially employ 300 workers and build truck engines.
U.S. Steel’s Fairfield complex has idled its blast furnace in recent months. But the plant’s 600-employee mill that makes pipe for underwater oil and gas exploration and production remains unaffected.
Weakness in paper and lumber markets continues to adversely affect firms in the state.

Reports from the tourism and hospitality sector in south Florida are mostly positive, but reports from central Florida have been less than robust.
Analysts forecast that office vacancy rates in the Miami-Dade market will reach record lows in 2001. Growth is attributed to the expansion of existing tenants and the increased demand for high-tech space.
Governor Jeb Bush has proposed a 3 percent increase in the state budget compared with last year’s increase of close to 6 percent. Despite a $1 billion budget shortfall, the governor has made room for more money for education, social services, transportation, the environment, salaries and tax breaks. He also plans to add money to the state’s rainy day fund and invest $30 million in upgrading the state’s ballot system.
Georgia Georgia
General Motors recently idled its Doraville plant to adjust production because of slack demand for the minivans produced there. Ford Motor Co. idled its Hapeville plant because of slower demand for the Ford Taurus and Mercury Sable vehicles produced there.
A variety of companies with operations in the Atlanta metropolitan area recently announced job cuts. These companies include AT&T Broadband, CNN,, Sony and Cypress Communications, an Atlanta-based telecommunications company.
Lockheed Martin Corp. will outsource some parts production work at its Marietta plant, a move that will cut 675 jobs. The plant assembles F-22 fighters and C-130J cargo planes.
There will be 26 Atlanta citywide conventions in 2001, about equaling 1999’s figure, which was the largest in two decades.
Harrah’s New Orleans casino, which employs 3,000 people, filed for bankruptcy protection recently.
While investment in new drilling rigs, production platforms and wellhead equipment is increasing, some oilfield service companies in Louisiana report a labor shortage. In the chemical industry, however, there is growing evidence of a slowdown that can be traced to the slowing world economy and increased production overseas. Several of the state’s chemical producers are adjusting production until inventories are drawn down.
Northrop Grumman Corp. will buy Litton Industries — the parent of Avondale Industries in New Orleans and Ingalls Shipbuilding in Pascagoula, Miss.
Procter & Gamble has decided to move ahead with a $100 million expansion of its Folgers Coffee plant in New Orleans.
Mississippi Mississippi
Governor Musgrove stated his commitment to Mississippi’s education and business development despite a dramatic slowdown in revenue.
Nissan Motor Co. recently selected Mississippi for a manufacturing plant that is scheduled to produce 250,000 vehicles a year beginning in 2003. The new plant, to be built near Canton, will make sport utility vehicles, trucks and minivans.
Textile and apparel producers and suppliers continue to scale back or close operations. Wellman Inc., which makes synthetic fibers, plans to idle a portion of a plant in Mississippi because of low demand.
Slow demand and increasing natural gas prices have forced International Paper’s Moss Point paper mill to temporarily halt production. International Paper also closed a mill in Tupelo and announced plans to sell its Natchez plant.
Vacancy rates in Nashville’s commercial real estate market experienced a slight increase during the fourth quarter of 2000, rising to 10.9 percent. Vacancy rates should continue to rise since there is a large amount of space under construction in suburban markets.
Bridgestone/Firestone Inc.’s tire plant in LaVergne has instituted shutdowns in recent months. The tire maker plans to lay off nearly one-fourth of the factory’s workforce as it cuts inventories following last summer’s recall.
Governor Sundquist has asked state department heads to hold down costs in an effort to avoid across-the-board spending cuts for schools, colleges and agencies.
In Nashville, labor availability will continue to be a challenge in the near term. Bonuses, flexible schedules and housing programs are just a few incentives hospitals are using to attract and retain nurses.
Compiled by the regional section of the Atlanta Fed’s research department

Return to Index  |  Next