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AUTOS DRIVING ECONOMY

Battered by globalization, the once-mighty textile economy of the South is a shell of its former self. But a new Hyundai plant in Montgomery, Ala., shows how market forces also work in favor of this region’s manufacturing sector.

The Seoul, South Korea-based car maker’s $1.1 billion, 2 million-square-foot plant, which opened in May, employs about 2,000 people to produce the Sonata sedan and the 2007 Santa Fe sport utility vehicle.

“Surprisingly, when the Hyundai plant gets up to production it will make Alabama the No. 2 state in the nation for car manufacturing, behind only Michigan,” said John F. Bemis, senior vice president of the shopping center division of Aronov Realty, a Montgomery-based full-service real estate firm with a heavy presence in the Southeast. Aronov is developing four Publix-anchored centers in Montgomery.

One-third of U.S. car manufacturing is now done in the South, says Melissa Anderson, a spokeswoman for the Washington, D.C.-based International Auto Dealers Association. DaimlerChrysler, Honda, Mercedes and Nissan have all opened production plants or other facilities in Alabama. In Spartanburg, S.C., BMW’s $2 billion plant, which produces the Z4 Roadster and X5 Sports Activity Vehicle, employs 4,500 people. General Motors, Nissan and Toyota operate facilities in Tennessee. Experts cite the Southeast’s lower labor costs as among the reasons for the trend.

— JG