ED Futures Newsletter, November 13, 2005

Dear ED Futures Subscriber:

The future of the global automotive industry has been very much on my mind for some time. Those who know me are aware that I spent a good piece of my career working in the industry back in the late 1970s and early 1980s.

The industry is teetering, and it can no longer endure the weight of severe global overcapacity any longer.

One bit of advice to my economic development friends: Be aware that whatever growth occurs in the industry at this point in time (and through 2006) is a zero-sum game. This means that one company's growth is at the expense of another, and one place's growth is at the expense of another. So, if you have an auto-related facility about to be shuttered, remember it's because another one is being built somewhere else by another company.

Call it the competitive economic development marketplace if you like, but this is an industry that has gobbled up a huge share of our scarce financing resources over the past quarter century and it will not (cannot) make any long-term commitment to any place where it operates.

What happens in the U.S. , Japanese, German, and Korean automotive industries are not separate issues and decisions. That's because the automotive industry is a global industry. It's all one big ball of string today that is unraveling quickly.

Read the articles I've posted during the past couple weeks and think about what is going on. New plants being built in Texas come at the expense of existing production capacity in Michigan and other places. Headquarters being built in Tennessee come at the expense of those in California. These are not separate decisions. And frankly, it's all about cost-savings, and not innovation and true competitiveness.

This is not the time for more old-line, small-minded economic development thinking. This is the time for a fresh wave of global thinking that allows everyone to see the big picture and how they fit into it. As economic developers, we must change how we think!

Enough of the rant.

Here are some articles from the past week that you might enjoy reading:

Research Triangle Regional Partnership Plays Up Its Recruitment Ranking

Future of Green Building

Nissan Packs for Tennessee

Target Industry Profile: Automotive Manufacturing

Five Keys to Successful Teams

Specialty Retailer Attraction

Target Industry: Pharmaceuticals

Target Industry: Fabricated Rubber and Plastic Products

On a final note, watch future issues for the results of ED Futures' Economic Development Scan and its survey on Economic Well-Being.

Feel free to tell others about ED Futures. They can use this sign-up link.

As always, I look forward to hearing from you.

Sincerely,

Don Iannone
ED Futures Publisher
Tel: 440.449.0753
Email: dtia@don-iannone.com