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Knoxville Business News Tennessee Mountain Scenery Background
October 14, 2012 | Tom Ballard

Innovation key ingredient for sustaining automotive sector growth in South

Innovation as the region’s competitive advantage was the central theme that emerged during last week’s “Southern Automotive Conference” in Chattanooga.

About 500 people registered for the fifth annual event hosted by the Tennessee Automotive Manufacturers Association (TAMA), LaunchTN, Volkswagen and a number of other organizations.

Starting with the keynote speech at Thursday’s opening session, it was clear that that speaker after speaker viewed innovation and a well-qualified workforce as the critical ingredients if the South is to maintain its more than three decade growth in the automotive sector.

“One of the greatest contributions of this industry is mass production, delivered by innovation,” said keynote speaker Jay Baron, President and Chief Executive Officer (CEO) of the Center for Automotive Research (CAR).

“The caution that I would offer this region is Mexico,” he said, noting that $5 billion has been invested in automotive facilities in the South in the past two years, but $8 billion has been invested in Mexico.

“It (Mexico) is a direct competitor,” Baron said. “One way to compete with Mexico is to have a better developed supply chain which means innovation.”

He suggested that one “fertile area for innovation” is combining different materials to address the challenge for producing lighter weight vehicles. Another is die casting, while a third is to “develop a common automotive research agenda.” Baron talked with a number of people about the role that CAR could play in helping set the R & D agenda.

During a Thursday afternoon panel moderated by this writer, four regional automotive research center leaders talked about their respective capabilities and the need for more cross-state collaboration. The panelists were Claus Daniel, Deputy Director of the Sustainable Transportation Program at oak Ridge National Laboratory; Suzanne Dickerson, Director of International Business Development and Marketing for Clemson University’s International Center for Automotive Research; Clark Midkiff, Director of the Center for Advanced Vehicle Technologies at the University of Alabama; and Clay Walden, Director of the Center for Advanced Vehicular Systems at Mississippi State University.

The concept of a multi-state R & D effort connecting universities, community colleges and industry was also endorsed by Senator Lamar Alexander during his comments on a Thursday afternoon panel as well as former Toyota Senior Vice President Dennis Cuneo.

Prior to his panel remarks, Alexander was one of three leaders inducted as the inaugural class of the TAMA “Hall of Fame.” The three leaders pioneered the development of what Automotive News calls the “New American Automotive Manufacturers.” Alexander was acknowledged as the person who started the industry’s growth in the region with the recruitment of Nissan. The other inductees were the late Marvin Runyon, the first CEO of Nissan North America; and the late Richard “Skip” LeFauve, the first President of Saturn Corporation.

There are 900 companies and 110,000 jobs in Tennessee tied to the automotive sector. That employment number translates into one in three manufacturing jobs in the state supporting the industry.

Other speakers included Tennessee Governor Bill Haslam, U.S. Senator Bob Corker, and Frank Fischer, CEO and Chair of Volkswagen’s Chattanooga Operations LLC.

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