Since Alabama said “Willkommen” to Mercedes-Benz two decades ago, the state has become a top destination for major foreign companies looking for a U.S. home for manufacturing plants and other facilities.
A major focus of Alabama’s economic development recruitment efforts has long been foreign companies, and it shows. Airbus, the world’s largest maker of passenger jets, picked Mobile last year as the site for a $600 million manufacturing line for its A320 family of aircraft. The plant will employ 1,000 workers and is expected to attract suppliers employing thousands more.
Alabama beat other states to win coveted projects from ThyssenKrupp, Hyundai, Toyota, Honda and others. Golden Dragon, a Chinese company, is building a $100 million copper tubing plant in rural Wilcox County, creating at least 300 jobs.
“Industries from all over the world are choosing to make their home in our state,” Alabama Gov. Robert Bentley said.
The state’s global connection is drawing in investment and creating jobs. Foreign companies in the U.S. invested $744 million on projects in Alabama in 2010, creating more than 3,400 jobs, according to a report by the Organization for International Investment, a business association in Washington, D.C.
Alabama ranked No. 7 among the states for foreign direct investment in 2011, and the figure rose 107 percent from 2010 levels, one of the biggest gains for any state, according to IBM Global Business Services’ “Global Location Trends” 2012 report. Foreign investment is helping to reshape the state’s manufacturing sector, economists say.
“Game-changing industrial development triumphs, such as the Airbus assembly facility being developed in Mobile and the continued emergence of Alabama’s automotive sector, are combining with catalysts such as Alabama’s Industrial Training (AIDT) program and the key infrastructure improvements, such as those made at the Port of Mobile, to reposition Alabama’s economy to better compete in the global marketplace,” Wells Fargo economists noted in a February 2013 report.
Greg Canfield, secretary of the Alabama Department of Commerce, said the state continues to aggressively pursue foreign companies with major projects. Canfield has crisscrossed the globe on recruiting missions, with his passport stamped in China, Japan, South Korea, Germany, the United Kingdom, Taiwan, France and other countries.
“We can’t think of a better place for them to be than Alabama,” Canfield said.
Besides AIDT and its vaunted worker-training program, Alabama offers significant advantages to foreign companies looking for a U.S. base, he said. In the Port of Mobile, Alabama boasts a deep-water port, and the state has extensive navigable waterways. It has a strong transportation infrastructure, with five Class 1 railroads and major interstates. The state offers competitive incentives and has a low cost of doing business.
“We have some significant logistical advantages,” Canfield said.
While Alabama has long been home to international companies, the decision by Mercedes-Benz in 1993 to base its first U.S. manufacturing plant in Tuscaloosa County has been seen as a pivotal development for the state. It was followed by projects from Honda, Hyundai and Toyota, creating a vibrant auto industry that today employs tens of thousands of people across the state.
Mike Randle, publisher of Southern Business & Development magazine in Birmingham, said investment by foreign automakers has transformed the state’s economy. He noted that Alabama is only state with plants operated by four foreign automakers.
“Let’s just say you will not find a better poster child for foreign direct investment anywhere in the U.S. than Alabama over the last 15 years,” Randle wrote in his magazine.
The projects keep on coming:
- Japanese auto parts supplier TASUS Corp. announced in September 2012 that it would build a $19 million, 104,000-square-foot plant in the Florence-Lauderdale Industrial Park, creating more than 135 jobs.
- German auto supplier Fredrich Boysen GmbH & Co. said that same month that it would build a $34 million plant in Tuscaloosa County that employs 100 people.
- Korean supplier Seung Chang Airtek Inc. last year opened its second facility in Auburn as part of a project expected to create 400 jobs.
Hilda Lockhart, director of the International Trade Division at the Alabama Department of Commerce, said the large international companies that have come to the state in the wake of Mercedes have provided an economic jolt. More than 81,000 Alabamians work for foreign companies in the U.S., most of them in manufacturing.
“The wages they pay have changed lives,” Lockhart said. “If you know someone who works at Honda or Hyundai, they have the money to send their children to college when maybe they didn’t before. Maybe they can buy a new car when they couldn’t before. The trickle down effect is so great.”