By Carmen K. Sisson

GADSDEN, Ala. — Traffic is jammed, bumper to tailgate, but no one seems to mind. Drivers cruise along at crawl speed, hanging out their windows from time to time to wave and yell friendly greetings to one another. The smell of barbecue hangs like Southern perfume in the sweltering heat, and strains of “Sweet Home Alabama” blast from roadside speakers.


In the heart of Dixie, where college football is religion and every day is a good day to celebrate, the World’s Longest Yard Sale might as well be redubbed the Biggest Tailgate Party.



On Aug. 5, the inaugural morning of the event’s 23rd year, things are actually calmer than usual, people say. Maybe the temperatures are keeping bargain hunters home. It’s only 9 a.m., and the heat index is already climbing above 100.



That doesn’t daunt David Freeman, Jim Young, and Gadsden City Councilman Ben Reed. This is the highlight of the year for these loquacious sellers, and they’re in high spirits this morning. Camped out in the shade of a blue tarp, they swig ice cold water and swap tall tales growing more wild by the minute. None of them are in it for the money — some years, they’ve sold merchandise worth as much as $4,000 new for only $50. They’re here to meet, greet, and have a good time.



”This is all the junk the junkyard wouldn’t take, and I’m just trying to sell it to these ignorant people walking by,” Young jokes.



”I refudiate everything he says,” Reed interrupts, riffing on Sarah Palin’s recent verbal gaffe.



In truth, some of the stuff they’re selling is pretty good, even if it’s not all priced to sell. There’s a Remington 1187 shotgun lying on the table that’s priced at $450. Over the years the trio has sold a little bit of everything: Snow skis to a man from Florida, even a gold-colored commode they unloaded for $5 to a man who was building a cabin in the woods and said he’d always wanted to sit on a golden “throne.”


But despite the silliness, there’s a reason why these men are here, particularly Councilman Reed. The yard sale lures shoppers from as far away as California onto Alabama’s back roads, giving them a chance to see all the state has to offer. “People come out in our restaurants, and get to see what Gadsden is,” Reed says. “All your little towns that got killed by the four-lane are coming back.”



The drive alone, he says, is worth the trip. As visitors snake north along U.S. route 127, they’re treated to some of the state’s most spectacular views. Mountains, rivers, caves, waterfalls — it’s all here, waiting to be explored. “It just makes you feel good to sit back and feel your heart beat again,” Reed says.



Many people enjoy the yard sale so much, they return every year, each time dipping into a different leg of the 675-mile journey. Cheryl Durham, of Trion, Ga., came down to Alabama in search of a particular piece of Carnival glass featuring a peacock, but she hasn’t found it yet. She remains undaunted. She’s attended the yard sale for more than a decade, and though she isn’t having any luck this weekend, her husband managed to scoop up several coveted Pez dispensers. It’s the thrill of the chase that lures them on, and they spend months saving for the trip.



Jessica Spurling, of Lebanon Junction, Ky., feels the same way.



”I shop for wants,” she says. “I work at a school, and this is the highlight of my summer.”


In Gadsden, the yard sale is big business, with professional vendors dotting every available parking lot, hawking knockoff designer purses and Coca-Cola and Crimson Tide memorabilia while well-heeled suburbanites temporarily mar their lawns with household flotsam and jetsam.



As you travel further from town, however, the road winds northward through pastureland and the wares get more rustic.



Just outside of Fort Payne, Ala., the area’s poverty is far more apparent. Two men sit by their pickup trucks on opposite sides of the road, alternately smoking and watching storm clouds gather over a soybean field. Cars pass, but few stop.



Joshua Meadows brought his granddaughter, Destiny, with him today to keep him company. This is his 10th year to load up whatever he could spare and bring it to this deserted patch of gravel. A lot of the items are clothes Destiny has outgrown and toys she no longer wants.



”You just sit and wait; maybe somebody will pass by and see something that interests them,” Meadows says, staring at the tip of his Marlboro and pausing to take a swig of Mountain Dew. “It’s been rough the way the economy has gotten. Got lots of hospital bills. I only make maybe $200 to $300, but it helps get ahead.”


He picks up odd jobs in construction, but work hasn’t been good since the economy nosedived. Today, he’s hoping to earn enough to keep his power and water from being disconnected. Even the 1962 Dodge pickup he’s sitting in is for sale — $800.



Ricky Cooper is in the same situation. He cleaned out his barn in Little River Canyon, loaded a Playmate cooler with Diet Dr. Wow (a non-brand version of Dr. Pepper), and headed here in hopes of selling something, anything.



He builds houses, and his wife works at Dairy Queen, but his real passion is building eclectic mountain furniture hewn from timber he cuts himself. When he first moved here, he had so much business he could barely keep up. He spent days building houses and nights crafting fine beds and lamps. But lately, he’s been driving as far as South Carolina for work. He hasn’t built a house in a year.



”Work went out, but you’ve still got your bills,” he says. “I wasn’t doing anything else today.” So far, he’s spent $24 and made $18. If he’s lucky, he says, maybe he’ll break even.

HUNTSVILLE, Ala. – You should probably leave the rocket scientist jokes at home when visiting Huntsville, Ala. The chances are good (1 in 12, in fact) you’ll meet one here. In a state beset with educational challenges, this mid-size city (pop. 396,000) is an anomaly, a figurative brain soup where intellectual capital is a commodity and innovation is the driving force behind economic recovery and future success.

When retired US Army Lt. Col. Levern Eady began looking for a place to relocate his young family, Huntsville immediately topped his list, not surprisingly. Built on the spine of its two major employers, Redstone Arsenal and NASA’s Marshall Space Flight Center, the once-sleepy cotton town is landing on a lot of lists these days: Forbes’s best place to weather the downturn, Fortune’s No. 1 location to start a small business, Business Week’s best place to raise children, Kiplinger’s best overall city.

Mr. Eady, who spent 20 years as a military logistician, didn’t have a job when he moved to the area. But, like 40 percent of the people here, he quickly found employment in what economists call the “creative sector,” working at LogiCore, a female-owned start-up that specializes in corporate and military problem-solving.

“The intellectual atmosphere here is very high,” says Eady, sitting in his well-appointed home, which is laden with the scent of potpourri and, at the moment, echoes of the Alabama-Tennessee football game.

That may well continue to be the key to Huntsville’s success as the state – and nation – move out of recession and shift more from a capital-intensive economy to a “creativity” economy fueled by innovation. As economic powers like India and China continue to rise, the US will have to develop its intellectual acumen if it wants to compete for the technologies of tomorrow. “There’s no such thing as stability as we used to know it,” says Barry Mason, dean of the business school at the University of Alabama. “There’s just constant destruction and creation. It leaves a lot of people behind, but creates enormous opportunity as well.”

Even with Huntsville’s heavy reliance on aerospace and defense, he says enough diversity exists – particularly in biotech and other industries – to propel the city into the next decade. Places like Cummings Research Park – with 225 companies – may well serve as Huntsville’s new economic launching pad.

More immediately, though, defense will continue to play a major role as the city prepares for an influx of up to 12,000 people in the next few years as a result of base consolidation by the Pentagon. In this case, Virginia’s loss will be Huntsville’s gain.

Martin Soler, an analyst at Moody’s Economy.com, says the effect of the base realignment will be felt throughout the area as demand increases for new schools, better roads, and more private-sector jobs. As long as living costs remain low, he envisions Huntsville growing “far above the national average” over the next decade.

Still, the federal government makes up 20 percent of the labor pool, leaving the area vulnerable to budget cuts. In addition, manufacturing continues to be a drag as consumers postpone big-ticket purchases like cars.

Location may also play a factor. Whereas Mobile, Ala., is a port city, allowing it to attract businesses like steel giant ThyssenKrupp, Huntsville is “a fairly remote area,” Mr. Soler says. Instead, the “Rocket City” will have to capitalize on its brainpower.

The city is putting $100 million into expanding the airport, $279 million into road projects, and is planning a “green initiative.” “If you look at our growth over the past five to 10 years, that’s exactly what I see on the horizon for the next 10 to 20 years,” says Brian Hilson, head of the local Chamber of Commerce.

By Tim Padgett and Carmen K. Sisson

It’s a convenient American stereotype: Detroit makes cars, Dixie races them. But as the entire tortured debate in Washington over whether to bail out the ailing U.S. auto industry has shown, that distinction is as tired and broken as the Big Three’s business models. In fact, the political game of chicken that ended Friday with President Bush announcing a temporary $17 billion aid package for GM and Chrysler to stave off the immediate threat of bankruptcy has shown the rest of the country what the South has known for years: led by foreign carmakers like Toyota and Mercedes-Benz, Dixie is now Detroit’s rival in auto production.

And the foreign automakers based in the South, who account for almost a third of all cars built in the U.S., have now become the benchmark against which the Big Three are measured. As the various aid packages were being negotiated, first on Capitol Hill and then this week on the other side of Pennsylvania Avenue, one constant condition Republicans insisted upon was Detroit getting its wages and benefits down to the levels of the so-called transplant workers in states like Alabama, Tennessee, Georgia and Mississippi.

It was the clearest sign yet that the auto production boom has given the South not just a much-needed industrial boost but new political leverage as well.

When Southern politicians like Alabama Senator Richard Shelby blocked a $15 billion congressional bailout for Chrysler and GM, they gave their constituents something just as valuable as pork: some regional self-esteem, if not outright revenge. The Big Three automakers, Shelby insisted last week, “have basically failed” because of their bloated, rigid and outdated manufacturing methods, while the South’s lower costs and more flexible management schemes are the new exemplar.

“Shelby is defending the industry model of his state,” says Merle Black of Emory University in Atlanta, a southern politics expert. “A lot of southerners feel they’ve been talked down to for a long time by northern industry, so he doesn’t lose any votes by doing this.” Jason Ray, who has worked for both Mercedes and Chrysler in Hunstville, Ala., says the Big Three “have engineered a doomsday scenario where if they aren’t allowed to continue being irresponsible with money, including the billions from taxpayers, the U.S. economy will crash. American automakers need to learn to grow with the times or become obsolete.”

More than a few northerners feel the South — supposedly the last bastion of red, patriotic values — is being hypocritical by bending over backward for Germans and Japanese at the expense of U.S. companies. To make the point, a retired GM engineer this month set up a website called boycottalabamanow.com. But southerners ask who the hypocrites really are. “When the textile industry went down in the South and we were accused of being behind the times, we didn’t ask for a bailout — we just had to reinvent ourselves,” says John Jeter, a South Carolina author whose family owns a small chain of auto parts stores and whose new novel, The Plunder Room, examines the modern southern character. “So southerners feel it takes some audacity for northern businessmen who make millions to come holding out beggar’s bowls for billions.”

Not that southern sages like Black approve of an industrial civil war. “We’re all in this recession together,” says Black, who like many others is quick to note that Detroit’s collapse isn’t exactly good for the South, especially given the large number of auto parts production jobs that rely in part on the Big Three.

Still, most southerners champion their region’s low-tax, non-union style of economic development, which they credit for luring overseas car companies like BMW and Kia to build major plants from Kentucky to South Carolina to Texas. More important, after spending the 20th century as America’s industrial backwater — and after watching the conservative Reagan revolution they once led fade away in last month’s presidential election — they hail the idea that the South is rising again in the 21st century. “The sense of confidence is palpable,” says Jim Cashman, a management professor at the University of Alabama and a Chicago native who has worked in the auto industry. “Companies like Mercedes have legitimized the efforts of the New South.”

Alabama has been particularly aggressive. Since the early 1990s, the state has offered German-based Mercedes, Japan’s Honda and South Korea’s Hyundai a staggering $1 billion in tax incentives, abatements and infrastructure improvements to build plants there. The return on investment has been $7 billion, creating almost 50,000 direct jobs and another 70,000 in sectors like parts suppliers. The population of the town of Vance, where the 4,000-employee Mercedes factory is located, has leapt from 500 to 2,000. Unlike the local sawmill, fertilizer plant or rock quarry, residents feel Mercedes “is going to survive, no matter what,” says one woman who has five family members working there. “That’s what made Vance what it is.”

But before Dixie gets too smug, it should acknowledge a debt it owes Detroit, or rather Detroit’s labor union, the United Autoworkers (UAW). The UAW has made the Big Three’s labor force one of the world’s best paid and protected — clout that is now a focus of what’s wrong with Detroit. Still, the foreign automakers are in America in large part because, as their more fuel-efficient cars became popular in the U.S. in the 1980s and ’90s, the UAW lobbied to get them to build production plants here.

True, those Asian and European firms flocked to the South to avoid Detroit’s high-cost culture. But while southern auto employees extol the union-free, right-to-work rules of their states, the truth is that they might still be earning the basement-level wages of a Mississippi textile worker today if the UAW hadn’t leaned on the likes of Mercedes in Washington. “Mercedes wanted a much lower pay scale when it arrived here,” says Cashman, who notes that veteran southern autoworkers now earn “only fractionally less” than the average $27 an hour for Detroit workers (and often end up with more, thanks to the foreign car companies’ bonus systems). “If not for the UAW pressure, the starting pay would have been more in line with the going wage rate of this region instead of this industry.”

At the same time, southern workers have taught the UAW an important lesson about helping to keep that industry viable. The foreign companies enjoy not only the South’s lower legacy costs but a more flexible production culture. Unlike the Big Three, the southern car plants are far more agile when it comes to accommodating shifting market demand; and that’s due largely to employees’ willingness to exact fewer of the production rules UAW contracts are notorious for.

Part of that efficiency is what Edward Miller, a Honda spokesman in Alabama, calls a modern “harmonious flow” — having nearby vendors supply parts, and workers assemble them, as they’re needed rather than stockpiling too much inventory or flooding the market with, say, gas-guzzlers no one wants to buy anymore. “Southern communities understand you can’t tie organizations down with restrictions,” says manufacturing management expert David Miller of the Alabama Productivity Center. “Successful auto companies in the South provide all the positives you’d find in a union shop.”

Perhaps. But labor advocates still fear for U.S. workers if the South’s automotive industry supplants Detroit as the template. And it’s not as if all is as shiny as a new Lexus in Dixie right now. The Mercedes plant in Vance recently had to cut back to a four-day workweek; and with even Japanese powerhouse Toyota facing U.S. sales slumps, the company this week said it’s delaying the startup of a new plant in Mississippi that will make its Prius hybrid car. Even workers like Ray now feel that a union “would definitely benefit” Dixie autoworkers; and either way, says Cashman, the New South’s economies “still have many, many miles of training and education to go.”

Still, you don’t hear any of the Big Three these days even thinking of opening a $1.2 billion, 2,000-employee facility in Georgia, as South Korea’s Kia is set to do next year. It’s enough to make a NASCAR driver take a victory lap.