Tennessee Growth Is a Tale of Auto Maker Boom and Meth Lab Raids

Two booming industries have taken hold in Tennessee in recent years: auto manufacturing and illegal methamphetamine production. One is driving robust population growth.

The suburban Nashville counties of Williamson and Rutherford, both benefiting from Nissan Motor Co. investment, led Tennessee in population increases over the last decade, according to U.S. Census data released last week. Rural counties in Tennessee experienced slow growth or declines and, in some cases, saw a rise in criminal industry -- illustrated by a record number of law enforcement raids on meth labs in the past year.

“Everything from Nissan has been good,” said former Smyrna mayor and current city councilman Paul Johns. “They pay good. It’s caused people to buy bigger houses, to drive better automobiles. We’re kind of lucky.”

Williamson County’s population rose during the past decade by 44.7 percent to 183,182 from 126,638, 2010 Census data show. It was trailed only slightly by nearby Rutherford County, which grew by 44.3 percent to 262,604 from 182,023.

Williamson is home to the North American headquarters of Nissan. The city of Smyrna in Rutherford hosts a $2.5 billion Nissan auto factory, which began production in 1983 and was expanded in the early 1990s. The Japanese automaker also plans to build its electric car, the Leaf, in Smyrna and a separate factory to produce batteries.

$1 Billion Plant

Further south near Chattanooga, the German automaker Volkswagen AG (VLKAY) is constructing a $1 billion plant where it will produce the Passat later this year. The factory will employ 2,000 people, with a projected 9,500 more jobs coming from companies that supply the plant, according to Scott Wilson, spokesman for Volkswagen Group of America.

The population of Hamilton County, home to the factory, grew over the last decade by 9.3 percent to 336,463 from 307,896, census data show.

Tennessee’s population grew 11.5 percent to 6,346,105 in 2010 from 2000, data show. White, non-Hispanics grew 6.5 percent to 4,800,782 in 2010 over the last decade. The percentage of Hispanics more than doubled to 290,059 in 2010 from 123,838 in 2000. The number of blacks rose 13.1 percent 1,049,391 in 2010. The Asian population grew 61 percent to 90,311 last year, according to the census.

Whites now account for 75.6 percent of Tennessee’s population. Blacks are 16.5 percent; Asians are 1.4 percent and Hispanics, 4.6 percent, according to census data.

Solar Power

Nine of the state’s fastest-growing counties are in suburban Nashville, Memphis, Knoxville and Chattanooga, the data show.

In addition to auto-company investments, Tennessee has benefited over the past three years from the growth of solar power. The state landed more than $2 billion in total investment from Hemlock Semiconductor Corp., of Hemlock, Michigan, and Wacker Chemie AG (WKCMF), a German company.

The economic outlook is not as bright in some rural parts of Tennessee where population growth was either slow or dropped since 2000, census data show. Those are also areas that state law enforcement has found illegal trade -- notably methamphetamine production -- soaring over the last four years.

Meth Capital

In 2010, Tennessee law officers seized a record 2,082 methamphetamine labs, up 45 percent from the 1,437 labs closed in 2009, according to the state’s Methamphetamine Task Force, which helps coordinate law enforcement effort to combat the illegal drug trade by creating a database of offenders and assisting in training and evidence collection.

By comparison, Missouri, which ranked first in seizures in 2009, had 1,960 labs raided in 2010, according to the task force.

That means Tennessee “likely” will rank as the meth capital of the United States, said Tommy Farmer, director of Tennessee’s meth task force.

“Is that the dubious distinction we want?” he asked. “I don’t think so.”

Police seized 155 meth labs in McMinn County in 2010, the most of any county, according to the task force. McMinn, a largely rural county in southeastern Tennessee, saw its population increase over the last decade by 6.6 percent to 52,266 from 49,015, according to the census. Campbell County, also rural, had 116 lab seizures. Its population increased by only 2.2 percent over the last decade from 39,854 to 40,716, according to the Census.

‘Big Issue’

In contrast, police captured a total of 22 meth labs in Tennessee’s fastest growing -- and much larger -- counties of Williamson and Rutherford.

“Meth is a big issue and that’s primarily a dynamic of the terrain of Tennessee,” said Deborah Woolley, president of the Tennessee Chamber of Commerce and Industry.

Much of the state’s industry is in the flatlands, with the Great Smoky Mountains and other remote, hilly regions left with higher poverty and drug use, Woolley said. “Your challenge is the mountains, the hills, the terrain, which just isn’t conducive for large manufacturing,” she said.

Meth costs taxpayers millions each year for law enforcement, cleanup of hazardous chemicals, hospital costs to treat burns victims when labs explode and foster care for the children whose parents are arrested, said Farmer. In 2010 alone, Tennessee placed 484 children in foster care following lab seizures, he said.

Higher Unemployment

While Tennessee has been successful in recruiting billions in new investment, its unemployment rate of 9.6 percent is higher than the national average of 8.9 percent. The fast-growth counties are faring better, with Williamson’s unemployment at 6.7 percent and Rutherford at 8.8 percent. The two counties with the highest number of meth seizures have unemployment higher rates than the state average: 12.8 percent in McMinn and 13.4 percent in Campbell.

Rural areas far from the interstate highways suffer because of poor transportation and less-educated workers, said Randy Gustafson, director of the state data center at the University of Tennessee in Knoxville.

Meth “is more of a symptom than a cause,” of the slower economy in rural Tennessee, he said. “For the most part, the people who are engaged in that are unemployed, unskilled and desperate because they have no opportunities.”

To contact the reporter on this story: David Beasley at dbeasley3@bloomberg.net To contact the editor responsible for this story: Anita Sharpe at asharpe6@bloomberg.net

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