Missouri was once a dominant force in the auto industry. A task force has made a number of recommendations to keep the state from becoming a bit player.
Missouri was once second only to Michigan in auto production. As recently as 2004, nearly 40,000 Missourians held automotive sector jobs. That stands at 26,000 today. High profile blows to the Missouri economy include Ford’s decision to close its Hazelwood factory in 2002. Last year, Chrysler decided to idle its St. Louis South Assembly Plant that built minivans. The company then announced it would shut down the North Assembly Plant that made pick-ups.
Still, the auto industry contributes $4 billion annually to the state economy. The task force report points out “Missouri workers have exceptional skills and experience in all aspects of motor vehicle production.” Workers have expertise in light truck and utility vehicle manufacturing, storage batteries, truck trailer manufacturing, vehicle lighting, seating and brake systems.
The report the task force delivered to Governor Nixon makes five broad recommendations, and then breaks those down into more specific recommendations. One of the top recommendations is that Missouri embrace the move to more environmentally-friendly vehicles.
“Across the board, we’re going through a major change in terms of overall technology and how it impacts the vehicle, the driver to the driving experience,” says Tony Reinhart, Regional Director of Government Affairs for the Ford Motor Company and one of 21 members on the task force.
Among the recommendations are creation of a corporate income tax credit for targeted industry research and development, commission a study of what it would take to build a “Green Auto” infrastructure and establishment of a “Missouri Center for Automotive Excellence”.
Another broad recommendation is to upgrade the training of Missouri’s auto workers so they can better adapt to changes in the industry.
The task force recommends the state assist automotive companies to upgrade technologies and diversify. It also wants the state to commission a third party study of the economic development incentives the state uses to lure business to Missouri or help firms in the state expand.
“Sometimes you find yourself at a disadvantage, because some state has certain types of programs that we may not have,” Reinhart says. “So, we want to make sure we have some kind of outside third party take a look and give an honest assessment of where Missouri was at in terms of its toolbox.”
The report says Missouri needs to consider creating a new “mega-investment” incentive program designed to retain high-paying jobs, such as programs established in Michigan and Ohio, two other auto states. Incentives could also be created to help establish so-called “supplier parks”, industrial complexes that locate supplies next to final assembly plants.
Reinhart says that despite the blows Missouri has had to absorb, it remains in a prime position to continue as a viable auto state.