BusinessTN

Mention the automotive sector in Tennessee and the first thoughts are likely to be of major manufacturing operations in Smyrna, La Vergne and Spring Hill in Middle Tennessee, of suppliers scattered throughout Tennessee’s geographic center, and, most recently, of the new white-collar jobs created through the 2005 relocation of Japanese automaker Nissan’s North American headquarters to the Nashville area.

Now add Washington County in Upper East Tennessee to that vision.

The $40 million startup investment that Japanese-owned automotive industry companies Koyo Corp. of USA and Nakatetsu Machining Technologies recently announced for two new manufacturing facilities in Tennessee represents the largest outside manufacturing investment in Washington County in 15 years. The planned facilities will be located in the new Washington County Industrial Park on Highway 11E about six miles outside of Jonesborough.

Koyo Corp. of USA will initially invest about $26 million for its bearing manufacturing company, says P.C. Snapp, economic development director for Washington County. The remaining $14 million will be for Nakatetsu Machining Technologies, a joint venture between Koyo and Nakatetsu Inc. that will create early-process bearing components for Koyo.

“They will start with about 150 employees,” Snapp says, but “both companies are planning to expand.”

The jobs supplied by these two suppliers will be high tech in nature, with some workers being initially sent for training to Japan, according to Snapp.

For Koyo, the Washington County plant will be its third North American location. Koyo is owned by JTEKT Corp., a manufacturer of steering, driveline, bearings and machine tools that employs about 30,000 people worldwide and has annual global sales of approximately $10 billion. U.S. operations are headquartered in Westlake, Ohio. Koyo’s two other operating manufacturing plants are in Orangeburg and Blythewood, S.C. Establishment of this third plant, company officials say, will enable Koyo to raise its monthly production capacity for tapered roller bearings—a high-function type of bearing used in automobiles and other applications—from its current level of one million sets to 1.5 million sets. Koyo is among the world’s largest automotive component suppliers for brands including Toyota, Honda, Ford, GM, DaimlerChrysler and BMW.

More evidence of Tennessee’s increasing status as an automotive industry powerhouse is that Koyo selected Tennessee from among potential locations in five states. Washington County specifically met Koyo’s needs “with an experienced workforce and an ideal logistical location, plus the outstanding commitment and cooperation from the state, county, TVA, regional utilities and the surrounding cities,” says Koyo’s general manager, Steve McCullough. (Washington County is located along two interstates—I-81 and I-26—and approximately 60% of the U.S. population is reachable within one day’s drive.)

The jobs are needed. Over the last few years, the county has followed state and national trends as it has lost some of its manufacturing base, says County Mayor George Jaynes. The two new manufacturing plants, Jaynes hopes, will help keep the work situation stable and serve to attract more manufacturing companies to the area.

The Washington County Industrial Park currently houses Bushog, a company selling mowing equipment. Koyo Corp. will occupy a floor space of about 75,000 square feet while Nakatetsu Machining Technologies will occupy a floor space of about 67,800 square feet. Snapp says the county is working on acquiring adjacent acreage.

Washington County is also doing some smart development of its own on a nearby site where it is building a new elementary school. A novel approach to school site selection, Washington County planning officials deemed the site advantageous in an effort to stimulate greater interaction between the local labor force and nearby schoolchildren. (A new four-lane road connecting the site to the Tri-Cities Regional Airport, which will reduce that trip from 30 minutes to 15 and allow visiting Japanese executives to avoid circuitous back roads, completes the overall development plan.)

Jaynes says other companies have already reached out to Washington County leaders to explore opportunities to open additional sites, but adds he is not willing yet to talk about who those companies are. He does say, however, that Washington County has been very picky in selecting companies for its new industrial park.

“We’ve been waiting for something like this,” he says. “We felt [Koyo and Nakatetsu] would be a solid cornerstone for our park.

From a statewide perspective, the success in landing the two Japanese automotive companies certainly adds to Tennessee’s burgeoning reputation as a cornerstone of the automotive sector.