Mercedes led Alabama’s surge in auto manufacturing

Mercedes-Benz employees in Vance, Ala., work on the ML350 SUV assembly line. (Photo/Mercedes-Benz)
Mercedes-Benz employees in Vance, Ala., work on the ML350 SUV assembly line. (Photo/Mercedes-Benz)
Greg Canfield, Alabama’s commerce secretary
“In just two decades, Alabama has transformed from a state with virtually no experience in auto production into the country’s fourth-largest auto producer, churning out nearly 900,000 vehicles a year.”
— Greg Canfield, Alabama’s commerce secretary

Alabama’s Automotive Plants

Mercedes-Benz
Location: Vance (Tuscaloosa County)
Announced: 1993
Capital investment: $4 billion
Employment: 3,300
2012 production: 182,000
Vehicles
In production: M-Class SUV, GL-Class luxury SUV, R-Class crossover
Coming in 2014: C-Class sedan
Coming in 2015: undisclosed fifth model

Honda
Location: Lincoln (Talladega County)
Announced: 1999
Capital investment: $2 billion
Employment: 4,000
2012 production: 336,766
Vehicles
In production: Odyssey minivan, Pilot SUV, Ridgeline pickup
Coming in 2013: Acura MDX SUV

Hyundai
Location: Montgomery (Montgomery County)
Announced: 2002
Capital investment: $1.7 billion
Employment: 3,500
2012 production: 361,348
Vehicles in production: Sonata sedan, Elantra compact

Source: Alabama Department of Commerce














Staff Report
Published Oct. 2, 2013

VANCE, Ala. — Twenty years ago, Mercedes-Benz decided to build its first plant outside of Germany on a 1,000-acre tract near this town of 1,500 in Tuscaloosa County.

The Sept. 30, 1993, announcement laid the foundation for an auto manufacturing boom that has brought global companies such as Honda, Hyundai, Toyota and ThyssenKrupp to Alabama.

“In just two decades, Alabama has transformed from a state with virtually no experience in auto production into the country’s fourth-largest auto producer, churning out nearly 900,000 vehicles a year,” said Greg Canfield, Alabama’s commerce secretary.

The Mercedes announcement also helped Alabama position itself to land billion-dollar economic development projects, including aerospace giant Airbus, which is building a plant in Mobile.

“What Mercedes did for Alabama was that it gained the state marketing you really could not buy,” said Bill Taylor, who headed the Mercedes plant from 1998 until 2009. “Mercedes coming to Alabama just put the state on the map across the globe. It made headlines all over the world.”

The German luxury automaker’s decision, added Mike Randle, author of the Randle Report, “is universally considered to be the single-most important economic development event in Alabama history. Prior to Mercedes-Benz, the state of Alabama was viewed by many in the national media as a socio-economic backwater.”

When Mercedes announced its Alabama project, the automaker outlined plans to invest $300 million in a 1,500-worker plant, making between 60,000 and 70,000 SUVs per year.

Today, the investment stands at more than $2 billion, and the facility produced more than 180,000 vehicles last year, spread across three models. There are nearly 3,000 workers at the plant, and Mercedes plans to hire another 1,000 over the next couple of years as it adds two more models — one of them the popular C-Class sedan — to its production schedule.

Mercedes’ impact can be felt across the state.

For example, Auburn, which is located nearly 140 miles from the Mercedes plant, has become a hotbed of auto suppliers, thanks to its proximity to the Hyundai plant and a Kia factory in nearby West Point, Ga.

Auburn Mayor Bill Hamm said the city’s 20 auto suppliers provide jobs for nearly 1,900 people. Suppliers from Germany, South Korea and Japan have set up shop in the area, producing parts for automakers with Alabama operations but also for BMW, Ford and General Motors. Total investment made by these firms stands at nearly $395 million.

“Being sandwiched between the Hyundai and Kia plants on the Interstate 85 corridor, having all those automotive suppliers in Lee County, represents an important business for us,” Hamm said.

Alabama’s network of auto suppliers for Mercedes, Honda and Hyundai now tops 130 companies, with new arrivals being announced regularly.

In the last couple of years, automotive companies have announced 103 projects across Alabama, representing nearly $2.4 billion in investment and 9,900 new jobs, according to the Economic Development Partnership of Alabama.

A few days ago, German manufacturer Bolta Werke GmbH said it will invest nearly $40 million in a Tuscaloosa facility and hire more than 350 workers. The company will supply specialized, molded plastic and chrome parts to the Mercedes plant and the Volkswagen factory in Chattanooga, Tenn.

Mercedes, which sells 15% of the cars it makes in the United States, also has become the state’s top exporter, responsible for most of the $5.9 billion in Alabama-made vehicles shipped to overseas destinations in 2012.

The recruitment of Mercedes established a model for Alabama’s economic developers, who have used its principles of teamwork, workforce development and relationship-building to land other major projects from global manufacturers, officials said.

“We worked hard, and we had a great team,” said Jim Folsom, who was governor when Mercedes moved to Alabama. “We got a lot of cooperation from state and local governments, economic developers and the business community. It was a team effort all the way.”

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