Lee Atwater never said that. A liberal professor claimed he said that in 1981, but he made that claim in the early 2000s. If he really said that, then why didn't this professor use it against him then when it could have destroyed his political career? Even the (very nasty) New York Times obituary written after Lee Atwater's death never mentioned this quote. And if he did say it, then he was talking about how racial politics in general had become frowned upon. Pat Buchanan, arguably the architect of the "Southern strategy", said that it was an attempt to convince moderate, pro-civil rights Southerners to vote Republican as a protest against the segregationist policies f many Democrats. Read it for yourself:
http://www.wnd.com/2002/12/16477/
This begs the question, where did all these moderate pro civil rights southerners come from, and what had they been doing for the previous a hundred years.