Driving Progress in Louisiana’s Automotive Industry
Located in the heart of the U.S. Southern Automotive Corridor, Louisiana offers unique strategic advantages to both automakers and suppliers. The state’s internationally competitive incentives coupled with the nation’s best state workforce recruitment and training program make Louisiana a smart choice.
A right-to-work state for three decades, Louisiana has the lowest taxes in the nation for new manufacturing operations and is pro-business at every level. Add the state’s highly effective manufacturing workforce, and it’s clear the state provides manufacturing operations a competitive edge.
“Tax credits certainly encourage business in Louisiana, but I could have done business anywhere. I love Louisiana. It’s a great place to live and raise a family. The people have a good work ethic, and there is lots of space to grow.”
A Talent Engine: Louisiana’s Automotive Workforce
Manufacturers can benefit from Louisiana’s sizeable available workforce. A right-to-work state for more than three decades, more than 430,000 people are employed in Louisiana’s manufacturing industry according Economic Modeling Specialists Inc.
New investors in the state can also be sure of Louisiana’s continued workforce growth, because the state is making strategic investments in higher education to meet the future needs of industry. The majority of the state’s research universities have institutes, programs of study and/or centers specializing in manufacturing focus areas. In all, Louisiana graduates more than 22,000 people per year with credentials relevant to the manufacturing industry, according to the National Center for Education Statistics.
In conjunction with private sector investments, Louisiana is willing to make additional investments to support a company’s goals. For example, the state is currently building a specialized workforce training center at Bossier Parish Community College for Benteler Steel/Tube. This facility will house the latest technology and be staffed with LED FastStart® team members to accommodate all phases of Benteler Steel/Tube’s recruitment, assessment and training activities. Once company-specific recruitment and training services ramp down, facilities such as this one will be available to other students as part of the Louisiana Community and Technical College System. This results in a net benefit for the company and the community.
LED FastStart Delivers Customized Workforce Solutions
LED FastStart, the nation’s No. 1 state workforce development program, creates customized workforce recruitment, screening and training solutions for new or expanding companies — at no cost to eligible companies.
With only one goal, client satisfaction, LED FastStart pairs its world-class team with a company’s subject matter experts to learn the company’s unique processes and culture. After determining the competencies that match the cultural and technical abilities that will help define the most successful employee, the LED FastStart team employs traditional and innovative methods to recruit qualified talent that matches the company’s specific requirements.
Based on a company’s immediate and long-term workforce needs, the LED FastStart team will craft unique programs that ensure high-quality, flexible workers are prepared on day one and beyond. Technical, team-based and soft-skills training programs are sequenced and delivered to engage new employees. LED FastStart helps improve learning curves, and increases a company’s productivity, resulting in a faster start and a better bottom line. Post-employment classes are strategically developed and sequenced to orient new team members into a company’s organization. LED FastStart’s world-class training adds value to every level of a company.
LED FastStart team members have developed and managed hundreds of customized workforce training programs for a wide variety of companies across multiple industry sectors, including Fortune 500 companies. In particular, members of the FastStart team have managed projects for leading companies such as Ford Motor Company, General Motors, Honda, KIA, Goodyear Tire and SW Manufacturing.
Revved Up Business Incentives
Automotive manufacturers will find a suite of highly competitive incentives designed to help their operations thrive in Louisiana.
Louisiana offers the Industrial Tax Exemption Program, which provides property tax abatement for up to ten years on a manufacturer’s new investment and annual capitalized addition.
In addition, the Digital Interactive Media and Software Development Incentive — the nation’s strongest, most comprehensive incentive for software development — provides a unique advantage to the aerospace industry. The incentive is applicable to customer-facing software, including aerospace-specific applications like navigation, communications, radar, defense and other embedded systems. Eligible projects receive a 25 percent refundable tax credit for payroll expenditures and an 18 percent refundable tax credit for qualified production expenditures. If the amount of tax credits exceeds the business’ state income and franchise tax liabilities, the business receives the balance as a refund.
Louisiana values business investment, and when a company moves or expands its automotive operations here, it can count on innovative solutions to meet the project’s specific needs. For competitive projects that involve substantial new-job creation, major investment and the majority of sales to out-of-state customers, Louisiana is agile and flexible — customizing incentives and workforce solutions, aligning state and local resources, connecting a company with valuable assets, and coordinating permitting and startup activities to ensure that operations proceed smoothly and on schedule.
A Strategically Located Production Powerhouse
Louisiana’s location is one of its most valuable advantages. Located in the heart of the Southern Automotive Corridor, the state’s ideal location places it in close proximity to the South’s extensive supplier base and Mexico as automotive manufacturers shift more production to North America.
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Louisiana is well situated for both inbound and outbound logistics. The state is home to:
Six interstate highways
Six Class 1 railroads
Six deepwater ports
Seven primary airport
Louisiana is one of only two states in the country where all six of North America’s class one railroads converge. Two of those railroads connect Mexico to other auto plants in the U.S. through Louisiana.
Louisiana Offers an Extensive Selection of Strategic Sites
Louisiana has identified two mega-sites specifically appropriate for a major automotive industry project:
The England Airpark Megasite near Alexandria is located near an existing I-49 interchange. Within 10 miles of the Port of Alexandria and adjacent to England Airport, all utilities are planned for the site as well as a planned Union Pacific Railroad rail spur.
The Franklin Farm Megasite is 1,440 acres of state-owned property located near I-20 on the KCS/Norfolk Southern Railroad. In close proximity to the Monroe Regional Airport and the Greater Ouachita Port, the site has both water and sewer engineering underway.
Bilten Park, located in Lacombe, has approximately 1,700 acres highlighted as a prime location for an OEM facility and 6,600 acres available in total. Multiple infrastructure improvements are currently proposed, including a rail spur and an I-12 interchange.
Louisiana’s other development-ready industrial sites can be found in the state’s Buildings & Sites Database. The LED Certified Sites program further qualifies industrial sites based on zoning restrictions, title work, environmental studies, and soil analysis and surveys.
To assist companies needing to make complex site identification decisions, LED has secured or has access GIS maps for every region of the state — enabling project managers to locate suitable sites quickly.
Competitive Climate for Automotive Manufacturers
At the core of Louisiana’s competitive advantages is the strength of its business climate. In recent years, the state has enacted reforms to create an atmosphere that Forbes magazine calls, “America’s new frontier for business opportunity.” Louisiana now ranks in the Top 10 states for business climate in the U.S., according to Area Development, Development Counsellors International and Site Selection.
Louisiana’s low-tax environment offers manufacturers significant cost savings. According to a 50-state analysis by the Tax Foundation and KPMG, The State Tax Costs of Doing Business, Louisiana ranks as the lowest tax burden for new facilities, relocations, and facility expansions for both capital-intensive and labor-intensive manufacturing operations in the U.S. The total effective tax rate (based on all state and local taxes including income tax, franchise tax, sales tax and property tax) is less than one percent.
A location in Louisiana can reduce company costs because of the state’s low industrial electricity rates — 2018 rates averaged approximately 19 percent below the national average.
Louisiana’s industrial natural gas rates are also highly competitive, with the state’s 2018 rates averaging the third-lowest in the South and approximately 18 percent below the national average.