MONTGOMERY, Alabama – As Governor Robert Bentley begins four days of talks with Japanese corporate leaders on an economic development mission, business ties between Alabama and the Asian country are strengthening as several Japanese firms add new investment to expand their operations in the state.
In Alabama, many Japanese manufacturers have found a U.S. base where they can grow and do what they do best — make products ranging from automobiles and engines to chemicals and carbon fibers, from water heaters and work gloves to vitamins and food products.
Honda and Toyota, gold-plated Japanese corporate names, have established large operations in Alabama, and both have expanded multiple times. A large auto supplier network has sprung up in Alabama, with many parts-makers also in growth mode. One example: HTNA, which produces carpet and interior trim products for automakers, is adding 100 workers in Alabama after investing nearly $27 million in a new, larger facility in Jasper.
Japanese companies in other fields also have thrived in Alabama. Daikin Industries, for example, announced plans in 1999 to launch a chemicals operation in Decatur with a $20 million investment. It expanded in 2000, 2005, 2008 and 2012, adding another $125 million in investment. The story has been much the same for Toray, which makes carbon and Teflon fibers in Decatur, with several rounds of expansion.
Alabama’s strong business connection to Japan is the reason that Governor Bentley and Commerce Secretary Greg Canfield have traveled to the Asian country this week for talks with corporate executives, trade officials, biotech industry representatives and others.
Bentley met this morning with Hiroyuki Ishige, chairman and CEO of the Japan External Trade Organization (JETRO), a group that works to promote trade and investment. Bentley presented Ishige with a pen crafted from a dogwood tree downed by the April 27, 2011, tornado in Tuscaloosa.
The governor and Ishige discussed the Japanese automotive industry, opportunities for Alabama and rising competition for projects from Latin America.
Governor Bentley’s mission to Japan is important on two levels, according to Steve Sewell, executive vice president of the Economic Development Partnership of Alabama. First, the visit allows top Alabama officials to solidify relationships with executives at Japanese companies such as Honda and Toyota that already have operations in the state. Second, it better positions the state for future investment by Japanese companies.
Today, more than 65 Japanese companies have operations in Alabama. Since 1999, when Honda announced plans to build a $400 million plant in Lincoln to assemble Odyssey minivans, Japanese companies have invested more than $4.4 billion in Alabama. These companies have created more than 14,300 direct jobs in the state, according to figures from the Alabama Department of Commerce.
Two years after Honda announced its plans, Toyota initiated a $220 million project to produce engines in Huntsville. Toyota is now carrying out its fourth major expansion at the facility, which will push the automaker’s total investment in Alabama to $850 million.
Sewell said large-scale expansions by Honda and Toyota, in particular, represent a convincing stamp of approval for Alabama in Japanese business circles. “It’s opened doors for us and given us credibility,” he said.
Much of the growth has been in the automotive industry, as dozens of Japanese auto parts suppliers have set up operations across the state. The Alabama facilities of these companies produce everything from stamped metal parts and seats to exhaust systems and lights. In Muscle Shoals, for instance, North American Lighting is adding 275 jobs and investing $36 million in an expansion.
“When you look at how the auto industry has expanded in Alabama, you see that the Japanese companies have played a huge role in that,” said Bill Taylor, a former Toyota executive who serves as the EDPA’s president. “We have experienced a tremendous amount of growth in the Japanese auto sector.”
Japanese investment has benefited many small cities across the state. Jasper, where HTNA is expanding, also is home to another Japanese auto supplier, Nitto Denko Automotive; together, the two companies will employ nearly 300 people once HTNA is at full production.
“The two Japanese companies have had a great impact on our economy, both directly and indirectly,” said David Knight, executive director of the Walker County Development Authority. “Anytime you have companies that employ hundreds of people and invest tens of millions of dollars, it can’t help but be a positive.”
DELIVERING SKILLED WORKERS
The EDPA officials said Alabama has helped Japanese companies through relationship-building and a teamwork approach that mirrors their own way of doing business. Critically, Alabama workers have proven themselves capable of mastering Japanese manufacturing techniques, considered among the most advanced in the world.
“Alabama workers have been able to live up to the high standards of Japanese manufacturing,” Sewell said. “Alabama’s workforce has delivered.”
AIDT, the state’s top-ranked workforce development agency, has had a hand in that, helping companies with pre-employment screening and job training. AIDT has on-site training centers at the Honda and Toyota facilities in Alabama, and the agency has assisted parts-makers as well.
Governor Bentley’s visit comes as trade ties between Alabama and Japan are growing. Two-way trade topped $1.5 billion in 2012, according to the Alabama Department of Commerce’s International Trade Division. Exports of Alabama-made goods to Japan were valued at $808 million in 2012, up from $487 million in 2010.
Efforts by top Alabama officials to solidify the state’s relationship with Japanese business leaders won’t end when Governor Bentley departs for home Friday. On Nov. 17-19, Governor Bentley will be in Biloxi, Miss., for the annual Southeastern U.S.-Japan Association (SEUS-Japan) conference, which connects top business, economic development and political leaders from the region with delegates from Japan.
In fall 2015, the SEUS-Japan conference will be held in Birmingham.