BIRMINGHAM, Alabama – Alabama’s pursuit of Mercedes-Benz’s first U.S. auto plant featured code names, clandestine meetings and plenty of behind-the-scenes drama, but it was teamwork, training and trust that landed the groundbreaking project, according to leaders who were involved in the recruitment.
Next week, Mercedes and Alabama will celebrate 20 years since the company announced it would locate its first U.S. plant in Alabama, and today’s leaders continue to leverage the same strategy as they strive to add more and more new development to the state’s thriving auto industry.
“On the state level, we work as a team with our cities and counties to recruit more new jobs,” Governor Robert Bentley said. “We show companies how Alabama has the best workforce of any place in the world. And we have the best workforce training program with AIDT. We build relationships and trust with the companies we recruit. We let them know that we’ll do everything we can to help them succeed.”
Accounts of how Alabama prevailed over 30 states in the 1993 competition for the coveted Mercedes production facility have focused on the deal’s financial terms or on tiny details that might have tipped the balance for the state. But Jim Folsom, who was Alabama’s governor during the recruitment of Mercedes, says the reasons the company chose Alabama are actually straightforward.
For one thing, Alabama’s worker training programs could deliver the skilled workforce that the German automaker needed for its ambitious project to build an all-new SUV in the U.S. market, Folsom says. Plus, he adds, the Alabama recruiters and the Mercedes site-selection group developed a strong relationship and an “element of trust” during negotiations.
“As with any business deal, the relationship part of the deal was very important. When you get down to the bottom line, they felt comfortable with us,” Folsom says. “They felt like we could deliver on what we promised. I felt that was a key part of the process.”
Finally, Alabama’s Mercedes recruiters received full cooperation from officials at state agencies and local governments in Tuscaloosa and Jefferson counties, as well as from the business community and the University of Alabama, Folsom says. That spirit of teamwork sent a strong signal to the automaker, he adds.
THE BIG DAY: SEPT. 30, 1993
Mercedes announced its plans for the Tuscaloosa County plant at a splashy event at the University of Alabama on Sept. 30, 1993, nearly 20 years ago to the day. The project gave birth to Alabama’s auto industry, and today the state is a top producer thanks to three assembly facilities and a constellation of suppliers.
“Back in 1993, when the announcement was made, it definitely put us on the map globally,” Folsom says. “Before that, we had not always been considered for projects, but this gave us a springboard.”
Capitalizing on the explosive growth of Alabama’s automotive manufacturing sector, which now includes Honda, Hyundai and Toyota, remains a top priority for state officials. Governor Robert Bentley’s Accelerate Alabama strategic economic development plan pinpoints automotive as a key growth target, and the state continues to aggressively pursue projects in the sector.
Bentley credits Mercedes with clearing the path for Alabama’s success in attracting more international investment.
“Had Mercedes not come to Alabama in 1993, we probably would not have had all these great international companies. When you talk to Mercedes, they will tell you that their best manufacturing plant in the world is at Tuscaloosa,” Bentley told Business Facilities magazine in an interview.
Since producing its first Alabama-made vehicle in 1997, Mercedes has carried out several expansions at its Tuscaloosa County site, almost tripling its initial production capacity of 60,000 to 70,000 vehicles annually. The plant is in the midst of expansions related to the planned launches of two new vehicles, and Mercedes is constructing a $70 million logistics hub that will employ 600 people.
“It’s been a success story,” Folsom says.
PHONE CALL FROM STUTTGART
In 1993, though, Alabama was considered an underdog in the Mercedes derby. Working in secret, Mercedes’ site team narrowed the field to six finalists – North Carolina, South Carolina, Georgia, Tennessee, Nebraska and Alabama. The list was then whittled to three — the Carolinas and Alabama. At the time, a site in Mebane, N.C., was generally considered to be the favorite, at least by auto journalists.
The Alabama team had a few tricks up its sleeve during the recruitment. Folsom made rush visits to Germany to tout Alabama’s advantages to Mercedes officials. At one point, Gene Stallings, then the University of Alabama’s football coach, was recruited to make a cameo appearance.
The outcome of the competition remained unclear almost to the end. On Sept. 21 of that year, Folsom was attending the Southern Governors’ Association conference at the Jefferson Hotel in Richmond, Va., when a telephone call came from Mercedes’ headquarters in Stuttgart. On the line was Andreas Renschler, the 35-year-old executive heading the plant project.
“He said, ‘Governor, I have good news and I have bad news,’” Folsom recalled. “’The good news is Alabama has been selected. The bad news is you can’t say anything about it.’ My wife will tell you, I didn’t even tell her.”
Not long after Folsom got the word from Renschler, national news outlets began reporting a bombshell – Mercedes had picked the North Carolina site for the $300 million project. Folsom, sworn to silence, couldn’t counter the reports.
“I had to listen to a lot of critics on how we lost it, and I received a lot of condolences,” he says.
Today, the Mercedes recruitment is considered to have established a model for Alabama’s economic developers, who have used its principles of teamwork, workforce development and relationship-building to land major projects from global manufacturers such as Honda, Hyundai, Toyota, ThyssenKrupp and Airbus. (Read a story on why Airbus picked Alabama for its jet factory.)
“We worked hard, and we had a great team,” Folsom says. “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.”
RELATED STORY: Billy Joe Camp was Alabama’s top industry hunter in 1993 and played a major role in the Mercedes recruitment. Read what he says about it and the growth of Alabama’s auto industry.