The Second Industrialization of the American South - Will Barnes

Hyundai auto plant grand opening 2005
Hyundai auto plant Montgomery, Alabama (2005)

"The Second Industrialization of the American South," written by the late Will Barnes in 2007, is excerpted from a longer essay entitled “The New Faces of Labor and Capital in the American South” (which will be posted on libcom when editing is completed). This essay details deindustrialization and relocation of global auto capital to the U.S. South.

Submitted by IDP on August 1, 2013

Auto Capital and the Second Industrialization

Elsewhere we have discussed the specific historical development that has and continues to be consummated in de-industrialization within what is colloquially, and often, referred to as the old industrial heartland in America. There we point out that beginning in the late 1940s and proceeding apace into the early 1960s, large U.S. capitals moved their operations southward both in a search for cheaper labor and with the longer term aim of altering the balance of power in struggles at the point of production in order to undermine the strength of organized labor. This “diversification” or geographical dispersal presupposed a world productivity leadership within the world capitalist system that was based on advanced organization of labor processes together with the role of the dollar as currency reserve within that system, all of which made U.S. capital a global hegemon. At the same time, said dispersal also presupposed U.S. domination of world oil production assuring cheap oil and gasoline fuels that made cost effective otherwise unacceptably high costs of operation of plant and transportation between geographically distant operations. Finally, this diversification of production assumed, correctly we add, a trade union leadership that would no longer undertake the type fight, in the case in point, required to unionize the South.

There was one other, this concurrent assumption, namely, Cold War plant construction and refurbishing discussed in the preceding section; the construction of infrastructure, in particular, the interstate highway system to accommodate the military industrial development; and, requirements of both, federal revenue transfers, a redistribution away from tax sources in the North and Northeast to this region. It is on this basis that large U.S. capitals were able to relocate and open new factories or plants in the South (e.g., IBM relocating to Lexington, Kentucky).

But with precious few exceptions (e.g., a Ford plant in Atlanta) these relocations and new plant did not feature those core, mass production manufacturing industries in auto, steel, rubber, metalworking that, for the most part, decided to build on already massive, integrated complexes in the North (Midwest and Northeast). General Motors, a name synonymous with mass production industries in the era of high “Fordism,” did not build a plant in the South until after 1990 (Saturn at Spring Hill in middle Tennessee). Thus, it was originally State-created defensive industries together with those large capitals least integrated into the mass production industries (again, IBM, General Electric), capitals whose stock holdings were dominated more by family interests than by interlocking boards of directors whose personnel were personifications of finance as well as industrial capitals, that “escaped,” as it were, southward, and formed the basis of the first southern industrialization.

A second, autos-based industrialization of the South, this type primarily of the historically “deep” South which had been bypassed by the first industrialization, is now ongoing. If we, in the narrow, descriptive sense, phenomenologically review the new auto plants in the United States, we can note the vast majority of them, though not all, are concentrated in this, very specific section of the country. If we begin with the first plants, we can note they were precisely the ones not to found in this region. These included the Toyota (Camry) plant in Georgetown, Kentucky roughly twenty miles northeast of Lexington; the Honda (Accord) plant in Marysville, Ohio, again about twenty miles northeast, this time, of Columbus; predating them both, the Nissan complex in Smyrna, Tennessee about twenty-five miles southeast of Nashville; the BMW (SUV) Spartanburg, South Carolina plant some fifty miles west southwest of Charlotte, North Carolina; and, lastly, included here because it too is outside the “deep” South, the relatively new Toyota (Tundra truck) plant in San Antonio, Texas.

Each of these plants (excluding the San Antonio truck complex) was built before 1994. Since 2001, taking Birmingham, Alabama as a point of reference, the following plants have been constructed: A Toyota (Tupelo, Mississippi) SUV complex to the northwest; a Toyota engine (Huntsville, Alabama) engine production facility and Nissan (Smyrna, Tennessee) truck and car (Altima) complex to the north; a Honda (Lincoln, Alabama) minivans, SUV and V-6 engine complex to the east, and Kia (West Point, Georgia) auto complex to the southeast that is designated for export production to the Central and South American as well as North American market; a Mercedes (Vance, Alabama) auto plant, a Hyundai (Montgomery) auto and SUV plant and engine facility in south, and a huge Nissan (Canton, Mississippi) complex to the west producing minivans, two different full-sized SUVS, and full-sized trucks. Let’s call this autos-centered, massive industrial development in which Birmingham, Alabama is centrally situated the southern automotive corridor.1

Now none of these vehicle manufacturing complexes are mere assembly plants, a single line that relies on existing local suppliers for parts (e.g., belts, hoses, perhaps even radiators, batteries and alternators under the hood), but import the most important vehicular components especially drivetrains (engine, transmission and transaxle) from manufacturing facilities in the foreign auto capital’s “homeland.” Unlike the earliest foreign factories in the United States (Toyota in a joint venture with GM in Fremont, California and Mitsubishi with Chrysler in Normal, Illinois), they all include stamping facilities, paint shop, often engine manufacturing factory and in some case a test track. The domestic content laws promoted by chauvinist union leaderships and U.S. auto capitals are meaningless. Here, along the southern auto corridor Japanese capital is in the vanguard: Honda, produces its own crankshafts, connecting rods, and casts and machines it own (V-6) engine blocks and cylinder heads; Nissan machines components at a third plant in Decherd, Tennessee; and, then there is Toyota. Toyota produces aluminum cylinder heads, engine blocks and other casings, producing 4, 6 and 8 cylinder engines, transmissions, steering columns, stamped parts, catalytic converters, coated substrates, truck bodies and after-market truck bed components, all of which is complimented by engineering and design facilities and all of which is achieved at various plants and facilities in the United States.

The infusion of auto capital into the American South, above all the construction and expansion of autos-based complexes in the “deep” South and the development that has been generated, constitutes a second industrialization of the South.

The plants and facilities enumerated above entail huge capital outlays: After 2000 alone, Honda has laid out $1.27 billion for its Lincoln plant; Nissan, $1.4 billion for its Canton facility alone; Toyota, $1.28 billion for the San Antonio truck plant and $1.3 billion for the Tupelo facility; Hyundai, $1 billion for its West Point complex and Kia the same amount for its Montgomery plant; and Mercedes, $600 million for its Tuscaloosa facility, and a BMW expansion in 2003, an additional $400 million over its initial 1991 investment in Spartanburg. Well over $12 billion when all the plant and facilities enumerated above are totaled. Over 23,200 waged jobs at rates comparable to UAW autoworkers; and some 174,000 waged and salaried work in related industries, suppliers, retail and service industries. This is the so-called “multiplier effect”: In objectivistic terms, industrial investment of this sort “attracts” related companies. Component manufacturing and parts distribution sprung up alongside primary industrial concerns. Development spreads throughout whole regional economy. Real estate development and the construction industry boom as manufacturing, warehousing and office space are built both to support these new industries and their new employees' needs. Retail establishments (such as mall based clothing retailers, restaurants, home improvements firms, etc.) and services (including, e.g., a whole complex of health care providers, medical professionals and financial services and financial institutions) developed with and followed in the wake of the new complex of new auto plants. These activities, in turn, add additional stimulus to construction, real estate development, to others forms of consumption (entertainment centers such as movie theater complexes, nightclubs, etc.). Atop this entire development, unrelated industrial concerns find this new, economically dynamic development attractive: In Columbus, Mississippi, fifty-five miles south southeast of Tupelo and linked by rail to Tupelo, a huge new mini-mill, designed to produce automotive grade steel, is being constructed by the newly organized steel firm, SeverCorr, to cash in, as it were, on the regional auto industry boom, while Eurocopter, a division of Airbus, is expanding an existing factory in Columbus…

The Weight of the Past. The Old and New Faces of Labor in the American South

The first industrialization of the American South was based on Cold War armaments production. Federal funds transfers from the Northeast and Midwest to the South, Southwest and Far West, the construction of military plant and production of armaments and weaponry, the economic development in residential construction and venues of consumption that followed in its wake, and construction of infrastructure (roads, interstate highways and the further development of the Tennessee Valley Authority) and its premise laid the foundations for not only the “New South” but the Sunbelt as a whole as a capitalist phenomenon.

The economic dynamism that developed on these foundations was not, however, industrial in the traditional, manufacturing sense, but it was urban-based. Economic dynamism and its urban basis were inseparable and, accordingly, we shall consider them together.

Outside scattered military basis (Gulf Port in Mississippi, Pensacola in the Florida panhandle), Cold War armaments production that, because of its scale and complexity, was undertaken in southern urban centers and usually often in coastal areas. Thus, Norfolk (Virginia), Charleston (South Carolina) and Mobile (Alabama). It was Charleston (not Norfolk) that was exemplary. Military construction, and armament production, service and maintenance in Charleston transformed it into a small universe symbolizing military-industrial civilization 2 There was, moreover, some further militarily industrial development, for example, in Dallas/Fort Worth and Huntsville (Alabama) where military-based aircraft and aerospace facilities were constructed. And, of course, there is Houston, oil capital of the western hemisphere, steel in Birmingham and the extent from New Orleans to Baton Rouge along the Mississippi River – a forty mile stretch that forms a massive petro-chemical complex. But, if we briefly examine the other “great” cities of the South, Atlanta, Nashville, New Orleans, we find that it is rentier activities that really developed on the basis of this first industrialization. Here, Nashville is paradigmatic: From the get-go, its economy has been dominated first by banking (First National), insurance (Metropolitan Life) and food service and developing on that basis, tourism (Opryland, Country and Western Hall of Fame) and entertainment (BMI), real estate and travel (American Airlines). The newest entrees into the southern wing of the Sunbelt economy, which remain as urban-based as ever and includes cities such as Orlando, Tampa Bay, and Charlotte, are one and all almost exclusively based on banking, tourism, entertainment, real estate speculation and commercial and resident construction. This characterization summaries development based on second-tiered southern cities, Raleigh-Durham, Virginia Beach, Augusta, etc, and the smallest cities also, for instance, the South Carolinian Atlantic coastal tourism corridor (Myrtle Beach to Murrells Inlet). To be sure, municipal services as a form of economic activity plays a determinate role as well.

Capitalists and workers (as labor with the exception of its black component), the classes at the heart of the first industrialization of the South, were objective social outcomes of State-created production processes (and not of, e.g., a constituted, abstract dialectic of productive forces and relations). Basing itself on its self-affirming Civil Rights activity, in all this the black proletariat in contrast has been largely self-made: In and through this activity, it has integrated itself into the total class configuration particularly in the South, and elsewhere in America also.

The second industrialization of the South is based, however, on a different dynamic with a different class configuration. Examine the class geography of this autos-based industrialization, and examine it historically with a view to the past the weighs so heavily upon it, specifically with a view to the social class milieux of the American Civil War.

Take, first, the ancient class geography of those plants that, currently, are located outside the “deep” South: The Toyota Georgetown complex is in the heart of southern sympathetic Kentucky planter land, the Accord Maryville plant is in the very center of one of the great Butternut belts in the old North (from whence sprung Clement Vallandigham, leading spokesman for the objectively treacherous, Copperhead Democracy in the Civil War era); BMW Spartanburg factory is in the foothills to the Smokies (Blue Ridge Mountains), home to the upcountry yeomanry of mid-nineteenth century America; and Toyota San Antonio truck plant sites aside the old capital of the western most reaches of southern slavery in eastern Texas.

Second, consider the “deep” South. Nissan complex in Smyrna, Tennessee, an old South gateway to the “deep” South is in the mid-South located at the edges of cotton plantation and upcountry yeoman lands (Cumberland Plateau). In the “deep” South itself, Toyota Huntsville (Alabama) is situated in historical upcountry, Honda Lincoln (Alabama) is located in the lowlands between southernmost reaches of Appalachian and Blue Ridge Mountains, and Hyundai Montgomery is in a small Civil War city at the center of “deep” South plantation country. Toyota Tupelo and Nissan (Canton) (both Mississippi), Mercedes Vance (Alabama) and Kia West Point (Georgia) are all in historically in the cotton plantation black belt.

What is the significance of these locales?

First, they are small town, not urban (Kia’s Montgomery location exempted). Second, the locational pattern is, historically, either northern Butternut belt or southern yeoman upcountry locales. (We shall turn to the southern black belt momentary.) While the likes of Toyota, Honda, BMW, etc., do extensive site selection surveys, the results of which, it is claimed, tell them these locales are possessed of a developed “educational infrastructure” and populated by groups who hold “non-union attitudes,” and while these firms may not explicitly and thematically grasp the historical significance of these locales, their surveys and host American consultants objectively hone in on the key determinant: These locales are historically white, southern sympathetic in the North and anti-planter, anti-black in the South; and, these Civil War features of the consciousness of northern butternuts and southern yeomen were carried over in a new (i.e., post-Civil War, post-Reconstruction, Jim Crow) historical era right down into the dawn of the “new” South (into era of its first industrialization) because these areas (North and South) had largely been by-passed by industrialization (though not by “industry”), precisely because the productive foundations of these locales, though changed (e.g., sharecropping tenancy has largely disappeared, but not waged labor in agriculture on the basis of contemporarily primitive productive means), had not undergone a thorough transformation, i.e., industrialization. These locales remained backwaters both productively and attitudinally until today’s ongoing, second industrialization. What is central throughout this entire epoch down to the present (what the consultants advise on and what the surveys suggest) is the continuity of opposition to the large-scale organization of labor in defense of itself in relation to capital. From beginning to end, this is the fundamental determinant in the site selections of foreign auto capitals.

This depiction is equally valid for the historically black belt of the “deep” South inasmuch as its black character has undergone essential change beginning with the out-migrations of depression thirties and world war forties, movements of masses of blacks north and west (and even with a small net in-migration in recent years). These regions are no longer overwhelmingly black (the premise being that black proletarians because not fully integrated into the cultural universe of capitalist America are more open to revolutionary perspectives). It can no longer be assumed that this region is union sympathetic, if not prevalently so, then vastly more likely to be so. (And, this is what the auto capital surveys indicate.) Atop of this, foreign capitalist firms, in particular the East Asian paternalistic and anti-union capitals, are hardly above, if not utilizing then, turning a blind eye to the activities of Klan nativists and fascists as the example of Nissan in Maury County (Smyrna), Tennessee has demonstrated.3 Reason enough for capital not to be too concerned over possible labor militancy in this specific region.

With does this come down to?

For us, it is ominous: Unlike the central (perhaps the only real) industry in the rural South during the era of its first industrialization, textiles, for which the black proletariat was and remains (in a greatly downsized industry) decisive, and unlike the varied economic activities characterizing the new South during that industrialization (armaments production, petro-chemicals, municipal services, oil, and retail and services including banking, insurance and real estate) in which black proletarians play roles ranging from major to secondary, in the autos-based, second industrialization black workers are secondary, often marginal and, in some cases, locked out.

For capital, the nature of rural and small town, largely white southern labor would, indeed, seem promising. And unless auto capitals in the South come under increasing competitive pressures (from amongst themselves or from anywhere else in the world), beyond the occasional “difficult employee” or act of sabotage, there is little to fear in the way of organized resistance at the point of production.

Yet, what the foreign auto capitals fail to recognize is that the historical regions of the southern upcountry, black belt southern cotton lands, and northern butternut belts all populated by labor not fully habituated to capitalist production in its (post-)Fordist sense (if not line work with individualized stations, then line work in teams, foremen and supervisors mediating performance pressures, scientized and quantified temporal constrains on tasks, etc.).

But should those competitive pressures appear (and why not? There is still far too much automotive capacity in the world system), the response of these workers to those pressures mediated to them by the auto capitals’ immediate representatives might come as a jolt: On balance, the profuse affectivity characteristic of southern labor as described here (crackers included) would not accept the Faustian bargain that it rationally assented to in entering the ranks of work for the new lords of auto capital: It would refuse to abide with the mortgage on its soul that it has taken out for participation in capital’s material community. While individualistic, it is highly volatile: Organized resistance likely in the form of wildcats is one predictable response. Nor is it not given that resistance would exhaust itself in this form. Where this would go would be contingent upon the total situation of labor in the country at large.

  • 1The term is regionally appropriate, but it is not ours. It also names a website produced by boosters who, in our humble opinion, are financed by Japanese and Korean automakers.
  • 2Recall the “rotten boroughs” system of southern elections allowed Congressmen from the region to achieve longevity in the House and Senate, to assume chairs of the appropriations and defense committees and to direct funding to their region. Under L. Mendel Rivers, a one time chair of the House Armed Service Committee, Charleston saw the construction of an air force base, naval base, a Polaris Missile maintenance center, a naval shipyard, ballistic submarine training station, a naval hospital, Coast Guard station, mine warfare center and the Sixth Naval District Headquarters, while McDonnell-Douglas, Avco, General Electric and Lockheed all set up shop in the city.
  • 3Two major attempts at organizing the Smyrna complex have gotten as far as votes in which union forces were defeated. Klan intimidation played a large role in both votes.