Call it “The Southern Strategy.”

Several states in the Southeast have joined the Council of American States in Canada, a successful recruiting organization, to lure Canadian companies into the region.

And with several major players already on the ground, Tennessee is leading the hunt.

“People here are more and more aware of the opportunities in Tennessee, and that is being driven by the state’s location right in the center of the automotive corridor,” says Bob Bathgate, Canadian director for the Tennessee Department of Economic & Community Development.

Bathgate also credits the state’s presence via his office in Toronto as a key factor in Canadian industries’ ongoing interest.

Tennessee is home to 71 Canadian-owned companies that employ more than 9,300 and have invested $1.4 billion in the state.

Canadian-owned companies in the state run the gamut from auto parts maker Eagle Bend Manufacturing Inc., with 630 employees in Clinton, to call center operator Sitel Worldwide Corp., with 200 employees in Oak Ridge, to perfume and cosmetics maker KIK Custom Products, with 250 employees in Memphis. Printing giant Quebecor World has multiple operations in Tennessee employing hundreds.

Of the 205 foreign destinations to which Tennessee companies exported in 2007, Canada was by far the largest market. Tennessee shipped $6.7 billion worth of goods to Canada in 2007, 31 percent of its export totals.

Canadian companies are finding the state not only a good place to do business, but also to grow their U.S. presence.

Canadian-owned U.S. Fence Inc., which operates a manufacturing facility in Hawkins County in Northeast Tennessee, employs around 600 and is working on an expansion that will greatly increase that number over the next five years.

Canadian National Railway Co. is finalizing a $100 million upgrade to its Johnston Yard in Memphis. The company views its Intermodal Gateway Memphis Terminal and Frank C. Pidgeon Industrial Park operation as a central location for shipping and receiving in this country, and the expansion will connect its planned terminal in British Columbia to markets in Mexico and Latin America.

“We have taken an outdated yard operation and redesigned and reconfigured it for more fluid operations now and for future growth,” said Jim Kvedaras, a CN spokesman.

The City of Memphis and the state pitched in on utility relocation and roadway-rerouting issues, measures that helped the company expand the scope of the project.

“Memphis is a central location for our operations,” Kvedaras says. “We’ve always had great cooperation with the port operations in Memphis, and the state was very helpful with several aspects of this project.”

Being able to tout this kind of large-scale development makes Bathgate’s job easier, he says.

“I offer to introduce new clients to those who have been in Tennessee for a number of years, and the companies there are always happy to meet with them,” he says. “The state is in a great location, has a good business climate and offers several key incentives. And we keep in touch with our companies down there – we don’t just go to the ribbon cutting and forget them.”