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Big News for West TN
Big news from Governor Bill Lee and Ford Motor Company as they made a huge announcement regarding Ford investing $5.6 billion in the mega site in Haywood County to build a 6 square mile battery and F-Series production plant called Blue Oval City. This plant will produce next generation all-electric F-Series trucks. According to the press release from the governor, this will create 5,800 jobs for the plant itself but over 27,000 new jobs if you include the direct and indirect ancillary industries and suppliers throughout the area. This is going to be one of the largest battery and vehicle manufacturing plants in the country, and it is one of Ford’s largest investments in its history. To say that this is a game changer does not do it justice. It is a paradigm shifter and may be the largest investment we see in our generation in the state of TN. One need look no further than Chattanooga to see the positive economic impact that can come from an automotive manufacturing plant. Volkswagen invested millions of dollars in that area and right now that plant employs 3,800 people. As a reminder, Blue Oval City intends to employ over 2,000 more people than the Volkswagen plant. Tennessee is building quite a resume as a business-friendly home for automotive companies with the state also being home to the GM plant in Spring Hill and the Nissan plant in Smyrna. This new facility will be built in Stanton, TN between Memphis and Jackson just off I-40 in southern Haywood County. There has been a hope we would see an announcement like this for years, and thankfully a major player has found this as a desirable place to invest millions of dollars. For those of us who live in West TN and continue to live and do business here, what might we expect to see as a result in coming years?
Increased demand for housing
There is already a shortage of supply for the existing demand we have, and when you bring in this many people to West TN to work and to live there is going to be additional demand. Expect farmland prices in certain parts of the state to increase as developers look to build housing throughout West TN. Adjacent counties within a reasonable commute are the most likely to see immediate impact.
Businesses eventually following housing
Once you begin to see enough rooftops, you will then see retail and small businesses beginning to follow suit. Expect larger big box retailers first that will serve as anchors of new commercial developments followed by small business to fill out the area. Don’t be surprised if we begin to see businesses come to West TN because of this news.
Arguments about what is good growth
There is always a price for growth. One of those may be an increase in cost of living and a reshaping of the composition of communities as new people move in. Certain cities and counties are well-positioned for and will welcome the growth while others will fight against the tide of change. This will potentially create new conflicts and challenges that these rural communities have not had to face in the past. Ask 10 different people who have grown up in Nashville, TN what they think about the explosive growth of the city, and you are likely to get 10 different answers. West TN will not experience that kind of growth, but this announcement has the potential to be the single largest shaping influence to this area in a generation. Those areas of West TN that can present the most unified front will be able to benefit most – regardless of which direction they choose either welcoming growth or shying away from it.
Investment into infrastructure
We all know driving down I-40 that it is already covered up, regardless of the time of day. Expect the state to invest more money into the roads and infrastructure surrounding the site to support the immense traffic flow.
Tighter labor market
If you think the labor market is tight now, it’s only going to get tighter. People from all over this part of the state will be applying for jobs at the new plant over the next four years. This will raise competition for labor, which may also raise wages. An increase in wages generally leads to an increase in prices for services as business compensate for their increased costs. This leads to our next implication.
Rise in the cost of living
One of the strongest arguments for living in West TN has been the cost of living. Compared to the rest of the country, this will continue to be a strength. But there will likely be a gradual increase that we are going to have to contend with in the years ahead as demand for living in this part of the state increases.
Expect a gradual change
This is a multi-year process, so the effects on West TN will take time to happen. The reality is that many people in the area and around the globe are going to ask themselves, “How can I benefit financially on this big announcement in West TN.” It will take some time for everyone to figure this out, so don’t expect property values to double overnight. But at the same time, don’t get sit on your hands if you plan on making an investment in light of this news. People will be making decisions in response to this, so there is a sense of mild urgency if you want to make any strategic shifts for your family or small business.
Unpredictable & uneven growth
Though the tide will likely lift all boats, it will not do so in the same proportion. The difficulty is it will be hard to precisely identify the parts of West TN that will benefit most, so be careful and strategic and even diversified in any moves that you make in light of this news.
Here at MBC/Foundation Bank we are proud to call West TN our home since 1934. We are excited for the potential this has to create more opportunity for the area and look forward to continuing to grow alongside West TN in our quest to invest in things that will outlive us in the communities that we serve. If you are looking to expand your business, interested in a home loan that stays local, or just need a customer friendly place to park your checking account – we can help you with your financial needs. Start your financial conversation with us today! We hope this episode has been helpful for you and if it has, we hope you will subscribe and share this week’s episode on social media. Until our next podcast… God Bless.
– President Chad P. Wilson, CFP
Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of McKenzie Banking Company / Foundation Bank on September 28, 2021. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. MBC/Foundation Bank is an Equal Housing Lender, Member FDIC.