Sweet Home, Alabama
Why is it that certain regions seem to attract new investments from automakers? Well, the new Mazda-Toyota venture is getting at least US $379 million in incentives from the state of Alabama.
What do you think of when you think of Alabama? Nick Saban and five College Football National Championships in the last nine seasons? The Roy Moore senatorial race scandal? “Sweet Home Alabama” or some other Lynyrd Skynyrd Southern-rock anthem?
But Alabama as a powerhouse in automotive manufacturing? Yes. In 2017, Germany-based automaker Mercedes-Benz produced its threemillionth vehicle in Alabama, a silver GLE 350 wagon built in Tuscaloosa.
And Mercedes-Benz is about to spend US $1 billion in Alabama to set up electric-vehicle production, build a battery plant, expand its global logistics centre and create a North American parts hub.
Honda Manufacturing of Alabama builds Odyssey minivans, Ridgeline pickups and the Pilot utility vehicle, last year making 357,316 vehicles in Talladega County. Since Honda began production in Alabama in 2001, it has built nearly 4.5 million vehicles there.
Hyundai Motor Manufacturing Alabama produced more than 600,000 engines last year, along with 328,400 cars and utility vehicles.
Toyota Motor Manufacturing built
700,000 engines in 2017 and supplies the engines for about one-third of the
Toyotas sold in the United States. All manufacturing numbers are from madeinalabama.com.
In the last three years, Alabama has risen from No. 5 among states building vehicles (based on volume), to No.
9, according to the Center for Automotive Research. And that volume is about to get a lot bigger because of a new deal between Toyota and Mazda to build a US $1.6-billion joint-venture facility that will employ 4,000 people and have the capacity to build 300,000 vehicles a year. The plant is expected to open in 2021, with average worker wages of about US $50,000 a year.
According to Reuters.com these jobs will be on top of the existing 57,000 automotive-manufacturing positions.
At the new joint-venture plant, Toyota will build the popular Corolla compact sedan, while Mazda will build utility vehicles. Reuters. com reported that Toyota and Mazda looked at more than 100 potential manufacturing sites in 22 states. Why Alabama? “Southern states have been home to the majority of new auto production by German and Asian automakers,” wrote Reuters.com.
“These states generally have good transportation infrastructure, business-friendly regulators and anti-union politicians.”
Government incentives helped sweeten the deal considerably.
“To lure the plant, the state offered an incentive package of $379 million in tax abatements, investment rebates and the construction of a worker training facility,” reported the Associated Press.
“Alabama Commerce Secretary Greg Canfield said that figure does not include a local incentive package that is still being finalized.”
Whatever the reason or reasons for getting the deal, it was a big win for the state.
“Alabama won a first-place trophy today in being selected for that plant,” Dave Sullivan, product analysis manager at automotive research company AutoPacific Inc., told the AP.
“The partnership between Toyota and Mazda will expand innovative automotive manufacturing in Alabama,” Governor Kay Ivey said in making the announcement of the new plant.
“Their (Mazda’s and Toyota’s) decision to locate this new facility in Huntsville is a testament to the talented workforce in our state.”
Huntsville Mayor Tommy Battle was more blunt.
“With this announcement, our world changes overnight.
“Mazda and Toyota, two of the world’s most innovative automakers, have created a legacy project that will provide jobs for decades to come for Huntsville and Alabama. It vaults Alabama to the top as an industry leader in producing the next generation of cars that will power our nation.”