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Foreign investment accelerates with new growth projects in Alabama

With new growth projects under way in key industries such as automotive and aviation, foreign direct investment continues to act as a powerful catalyst in Alabama’s economy, casting a wave of job creation and triggering positive ripple effects.

Since 2018, foreign companies have launched investment projects valued at more than $13 billion across Alabama, generating nearly 17,000 job commitments, according to the Alabama Department of Commerce.

While final figures aren’t tallied for 2022, foreign direct investment (FDI) projects topping $2.6 billion in value were announced during the year and will bring at least 2,600 new jobs to the state, according to a Commerce preliminary estimate.

Those figures exceed the FDI totals for 2021, when $1.1 billion of new investment generated 1,700 job commitments.

“The success of the companies operating in Alabama is a story that’s being told around the world, and that’s helped us recruit many important global companies to our state,” said Greg Canfield, Secretary of the Alabama Department of Commerce.

“Here at home, that’s meant much-needed new investment and lucrative jobs for communities across the state,” he added.

Electric vehicles
After a $300 million investment, Hyundai will build the hybrid version of its Santa Fe SUV and the first electrified Genesis GV70 SUV at its Montgomery, Alabama, plant, beginning in 2022.(Image: Governor’s Office/Hal Yeager)

Major FDI projects launched in 2022 include:

  • France-based Airbus is adding a third assembly line to increase A320 Family aircraft production at its Alabama manufacturing center, creating 1,000 jobs in Mobile. Investment in the project is $700 million.
  • Hyundai and supplier Hyundai Mobis, both based in South Korea, are investing a combined $505 million in projects allowing the automaker to produce electric vehicles at its Montgomery assembly plant. A total of 600 jobs are being created.
  • South Korea-based auto supplier Daechang Seat Co. is investing $23.4 million in an expansion at its Phenix City seat frame plant, creating 300 jobs.
  • With a $222 million investment, Toyota is adding at new four-cylinder engine manufacturing line, capable of producing hybrid electric powertrains, at its Huntsville factory.

GLOBAL GATEWAY

Foreign investment has long been a major economic driver for Alabama.

Select USA, a government initiative that facilitates foreign business investment across the nation, estimates that over 120,000 jobs in Alabama are tied to FDI projects in industries led by automotive, plastics, metals and chemicals.

Top sources for foreign investment in Alabama are Germany (23%), Japan (16%) and South Korea (13%), according to Select USA.

Christina Stimpson, director of Commerce’s Office of International Trade, said FDI accounts for a substantial share of the new and expanding industry activity in the state each year. Her office supports Alabama’s FDI attraction efforts to heighten awareness that Alabama represents a global gateway to the U.S.

“Clearly, facilitating foreign investment is a huge priority for us as a state, and we’re fortunate to have a diverse base of industries, along with a highly skilled workforce, to attract and retain these commitments from global companies year after year,” Stimpson said.

“We know that FDI adds vitality to local economies seeking strong industries and job-creation potential because we can point to many examples in Alabama where this has had a huge impact,” she said.

RURAL SPARK

Alabama auto industry
Mercedes-Benz officially opened a battery factory on the automaker’s Bibb County campus, a few months before starting production of electric vehicles in Alabama, Tuesday, March 15, 2022. (Image: Governor’s Office/Hal Yeager)

Foreign direct investment has spurred economic growth in recent years in rural parts of the state.

Between 2015 and 2021, Alabama’s 40 “targeted” counties attracted almost $1.9 billion in FDI through growth projects with over 4,200 job commitments, according to Alabama Department of Commerce data.

This investment has primarily flowed from countries such as South Korea, Canada, Japan and Germany.

Brenda Tuck, Rural Development Manager for the Alabama Department of Commerce, said rural Alabama locations such as Chambers County, Selma and Fayette are among those that have seen job creation through foreign investment.

The Scott G. Davis Industrial Park in rural Bibb County illustrates the power of FDI. Today, the 564-acre park is home to a Mercedes-Benz EV battery plant and other operations, along with a factory run by auto supplier MöllerTech. Together, the German companies have invested over $600 million in the park, creating around 1,200 jobs.

“The high level of FDI activity shows decision-makers around the world that rural Alabama is an ideal location for doing business, and the companies locating there often expand their operations because they are getting the critical support they need to be successful,” Tuck said.

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