Assembly - December 2008 - (Page 22) ASSEMBLY Capital Spending A Modest Increase Despite the credit crunch, U.S. assembly plants will nudge up their spending on capital equipment next year. S By John Sprovieri Editor ome historians have cast the Civil War as being about more than the abolition of slavery. It was a conflict between two contrasting cultures: a predominantly industrial North and a largely agrarian South. Be that as it may, the South can hardly be characterized as an agrarian society today. Indeed, if ASSEMBLY magazine’s 13th annual capital equipment spending survey is any indication, the South may soon eclipse the Midwest as the nation’s manufacturing center. While it’s true that 41 percent of all spending will occur in the Midwest—the 13th straight year that the nation’s heartland has outspent all other regions—the South is quickly closing the gap. In fact, for first time in our survey’s history, Southern manufacturers will spend more than $1 billion on capital equipment next year. Specifically, Southern plants will lay out $1.09 billion on capital goods in 2009, or 38 percent more than in 2008. All totaled, Texas, Alabama and the 14 other states that make up this region will account for 38 percent of all spending on assembly technology in 2009. That compares with 28 percent in 2008 and 20 percent in 2007, and it’s a record high for the region. The 2009 median budget for the region is $150,000. That’s twice the 2008 median, and it’s the highest figure of any region. Of course, you scarcely need our survey to know that manufacturing is booming in the South. Just look at the headlines from the past few months: U.S. assembly plants will spend $2.88 billion on new equipment in 2009. Volkswagen will build a new assembly plant in Chattanooga, TN. VW will spend $1 billion on the new facility, which is scheduled to begin production in 2011. With an initial production capacity of 150,000 vehicles per year, the plant will employ 2,000 people. Additional jobs will be created by supplier and logistics operations. The first shipment of manufacturing machinery for Kia Motor’s new assembly plant in West Point, GA, 22 ASSEMBLY / December 2008 www.assemblymag.com http://www.assemblymag.com
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