The economy of Chattanooga and Hamilton County was, in large part, built upon the pillar of manufacturing. Through both economic expansions and downturns, manufacturing has remained a continuing source of jobs, revenue, and civic pride in this area. As with other cities throughout the U.S., Chattanooga has experienced its share of challenges within the manufacturing sector. In fact, over the last 30 years manufacturing in Chattanooga has to a great extent reinvented itself, responding to advancing technology, economic influences, and the demands of global competition.
Today, manufacturing accounts for roughly 35,000 jobs in the local economy and remains one of the top sources for employment. While the sight of dozens of smokestacks belching emissions into leaden gray skies has disappeared from the landscape, the production of finished goods remains vibrant; on any given day thousands of people are hard at work in manufacturing.
“Our area continues to have a diverse economy, and manufacturing jobs are needed for that purpose,” says Hamilton County mayor Claude Ramsey. “Manufacturing jobs pay well and have good benefits. One important factor is that those jobs in the service sector depend on manufacturing as well. You have to make something in order for someone to service it. We are going to continue to prepare a workforce that can be trained and can be built on, while we also have excellent sites available for more manufacturers. We will continue to pursue manufacturing and other kinds of jobs, and major companies, including Alstom, McKee Foods, Chattem and Volkswagen, are continuing to grow and expand here. I think manufacturing will always be a focus and that service-related jobs will follow manufacturing jobs.”
Trevor Hamilton, vice president of economic development for the Chattanooga Area Chamber of Commerce, agrees. “Manufacturing jobs pay very well,” he says, “and they also create new wealth in our community because the products are sold all over the world and return a large portion of the revenues to our area.”
The changing face of manufacturing in the Chattanooga area during the last three decades has been driven by the necessity of maintaining a competitive edge. According to Ray Childers, president and chief executive officer of the Chattanooga Manufacturers Association for the past 17 years, industries such as textiles, foundries, hosiery, garment, leather and chemical producers have waned in Chattanooga, either relocating to other countries due to lower wage structures or disappearing through attrition and the natural life cycle of business. On the other hand, new segments of the manufacturing market have emerged locally, while some long-time industries have adapted to change.
“Machinery and equipment, metal fabrication, plastics, food products, automotive and energy-related industries have located and/or expanded operations here,” says Childers. “The same factors that made Chattanooga the ‘Dynamo of Dixie’ remain in play in most decisions concerning industrial and other business segment locations. These include geography, transportation with a major navigable river, three interstate systems, two major railroads, and power and utilities. Other critical assets are an available, trainable workforce and education and training institutions accustomed to working with manufacturers to provide applicants with specialized skills on aggressive timelines. A strong manufacturing heritage, an incredible natural beauty and a quality of life second to none, top off this impressive list of reasons why Chattanooga is attractive to many types of industrial prospects.”
While the manufacturing sector in Chattanooga and Hamilton County has not been immune to adverse economic conditions, the signs of growth and future prosperity abound. The announcement that Volkswagen will invest more than $1 billion in its North American production facility – and the commitment by company leaders to stay the course with its development – promises future manufacturing growth. Additional indicators of the growing appeal for this area include the announcement by Alstom to construct a $200 million facility to manufacture and retrofit steam turbines – and with it, create 350 new jobs – and the investment of $1 billion by Wacker Chemie AG in a Bradley County plant that will add 500 jobs.
“Job creation is an important element of attracting new manufacturers and assisting those already located when they expand,” notes Tom Edd Wilson, president and chief executive officer of the Chattanooga Area Chamber of Commerce. “Large operations bring other jobs with them, particularly in suppliers. With the environmental consciousness of clean manufacturing and a pair of $1 billion plants in our backyard, think of the activity that all of this will generate over the next five years. I’m not sure we realize what the total impact will be yet.”
Positioning the Chattanooga area to take full advantage of its resources has paid dividends and will continue to do so. Third District Congressman Zach Wamp (R-TN) remembers the strategic planning that made a resurgence in manufacturing possible. With an environmental focus, the research into industries that could prosper throughout the Tennessee Valley will remain viable for decades to come, and the process will always be a model for cooperation between city, county, state, and federal governments.
“Manufacturing is the linchpin of our economy,” Wamp comments. “If you don’t build it or make it, you can’t service or sell it. Technology continues to change the manufacturing segment of the economy, and when we developed the Technology Corridor 15 years ago, we determined what industries would be best for job creation. Transportation and energy were the two primary segments identified, and Volkswagen is in transportation, and Wacker is in energy. Manufacturing has changed with the greening of the country and LEED (Leadership in Energy and Environmental Design) certification. Technologically and environmentally advanced manufacturing have improved things since when I was a kid and the pollution was so bad and the air so thick that you could cut it with a knife. This is all about production because in a service-based economy, without manufacturing and production, there is nothing to service.”
Childers calls “advanced” manufacturing the keystone of local industry. “It is the centerpiece,” he says, “to any successful model of economic development. While many manufactured products and processes are gone, others that are very different have appeared to take their place. The synergies created by these manufacturing processes, with their concentric circles of suppliers of materials and services and a variety of employment opportunities, are unsurpassed by other kinds of business activity. High-tech manufacturing jobs, performed by highly skilled manufacturing technicians, will provide the levels of compensation and benefits necessary as our economy recovers and moves forward.”
In his economic development role, Hamilton rides the crest of the manufacturing recruitment effort locally. He sees hard work and stiff competition ahead, while innovation serves as a catalyst for economic development.
“I believe Volkswagen will help drive growth in our emerging automotive sector,” he reasons. “I think Alstom’s expansion, the nuclear renaissance, and TVA position our region for strong growth in manufacturing related to power generation and green industry. To take full advantage of these opportunities, we must continue to proactively market ourselves, while nurturing homegrown entrepreneurship in these areas.”
As good stewards of our resources, positive advocates for industrial development, and champions of technologically advanced and environmentally conscious production, leaders across the Chattanooga region are building this area’s reputation as a prime location for manufacturers. In turn, the transition from what manufacturing once was to a new and advanced manufacturing sector will lead the entire community to greater prosperity.