News - Summer 2017

Corporate Welfare? ROI from Alabama’s automotive industry is impressive

By Michael Randle


In September 1993, the state of Alabama was highly criticized for the $253 million incentive package it gave Mercedes-Benz to locate its first plant in the U.S. in Tuscaloosa County. Alabama offered a package that was double that of what South Carolina had given to locate BMW just a year earlier.


Then in 1999, Honda announced it, too, would build a plant in Alabama. . .this one in East Alabama. That initial package totaled $158 million. In 2002, Hyundai followed Honda with its own plant announcement in Montgomery. Alabama’s initial package to Hyundai was $234 million.


Counting second and third incentive packages for expansions, the total Alabama has given out in site prep, training, tax breaks and other incentives is less than $1 billion for the three automakers.


So, to more easily understand the return on investment, let’s eliminate anything Alabama could have received from the three automakers, including the attraction of more than 250 suppliers to the state, tax generation, multipliers, spin-off jobs and anything else that’s difficult to calculate. Let’s just add up the payroll of the three automakers just at their facilities since they began operating. Why payroll? It’s something everyone understands because most of us are on a payroll.


SB&D’s estimated payroll since Mercedes, Honda and Hyundai have been operating their plants in Alabama is right at $12 billion. That’s a 12-fold ROI and that just counts payroll at the three assembly plants. What’s more, those plants will be operating 50 years from today.





Mercedes to spend another $1 billion for EV production

Before its latest $1.3 billion expansion of its lone U.S. plant in Tuscaloosa County, Ala., is completed, the German automaker announced at deadline it will spend
$1 billion to jump-start its electric vehicle program. Mercedes plans to assemble new electric SUV models at the plant, which recently celebrated 20 years of production in Alabama. The deal will create 600 jobs.


Automakers in Alabama shipped vehicles to 86 countries last year

Alabama’s automotive industry is in its 20th year. Last year, Mercedes-Benz, Hyundai and Honda shipped $7.9 billion in Alabama-made vehicles to 86 different countries. The number is a 13 percent increase over 2015 exports. Germany was the top export market for Alabama-made vehicles with more than $2.4 billion, followed by China, Canada, Mexico and the United Kingdom.


European auto supplier to open first U.S. facility in Alabama

An automotive company based in Spain is investing $30 million in a new wheel assembly plant in Tuscaloosa County. Truck & Wheel Group’s move will create more than 70 jobs.


Gateway Tire to invest $11 million in Alabama

Gateway Tire, a wholesale distributor of brands such as Toyo and Hankook, announced plans to invest $11 million to open a 200,000-square-foot tire distribution center in Dothan.


Honda supplier expanding and hiring in Alabama

A Canada-based automotive metal-forming company is planning another facility for its plant in Sylacauga, Ala. Fleetwood Metal Industries is building a 60,000-square-foot facility close to its current plant in Sylacauga’s industrial district, and plans to hire 70 more employees.


Auto supplier adding jobs in Cullman

Topre America, a manufacturer of metal components for automakers, is investing $36 million in its plant in Cullman, Ala. The project will create 65 jobs.


German company to build plant in Auburn

Winkelmann Group, a German company that manufactures metal parts for the aerospace, automotive and defense industries, will invest $12 million in a new plant in Auburn. The project will create 50 new jobs.





SAF-Holland expands in Arkansas

SAF-Holland, a maker of trailer suspension and axle systems, is investing $4 million to expand its facilities in Dumas, Ark. The company will add 65 new positions.





Florida-Alabama megasite makes pitch to Toyota-Mazda

In the Florida Panhandle, just south of the Alabama-Florida line and Dothan, Ala., lies the 2,240-acre Florida-Alabama Mega Site. The site is relatively new to the large number of megasites in the South. Alabama and Florida officials have contacted leaders of the Toyota-Mazda joint venture to build electric sedans and SUVs. The site is located 30 miles from Dothan, 49 miles from Panama City, Fla., and 63 miles from Tallahassee. The city of Marianna, Fla., operates a municipal airport 12 miles from the site.





Auto supplier expanding in West Georgia

Hyundai Dymos is adding 150 jobs to its workforce of 350 in West Point, Ga. The $9.5 million expansion will add car seat capacity at the facility. The company makes seats for both the Kia plant in West Point and Hyundai’s plant in nearby Montgomery, Ala.


BMW facility to draw thousands to College Park, Ga.

BMW plans to open a training center in College Park next to the Georgia International Convention Center, moving the training out of its Southern regional headquarters in Sandy Springs. Officials in College Park expect the training center will draw as many as 10,000 BMW workers annually for corporate training. At 53,000 square feet, the new $16.6 million center will be four times as big as the old one. It will mainly be used for interactive training of dealership employees.


Auto parts supplier to locate in Georgia

Carcoustics, a German auto parts supplier, will invest $6 million in a new facility in Buford, Ga. The company, which produces solution-oriented acoustic components, will create 200 jobs.





Ford investing $900 million in Kentucky Truck Plant


In the summer quarter, Ford announced it is investing $900 million in its Kentucky Truck Plant in Louisville.


In 2015, Ford Motor invested $1.3 billion and added 2,000 jobs at its Kentucky Truck Plant in Louisville to build the Ford Super Duty truck. Now, the company is investing another $900 million in the same plant to increase capacity in assembling Ford Expeditions and Lincoln Navigators, many of which will be exported. The project will retain 1,000 hourly jobs. Ford operates another assembly plant in Louisville that builds small SUVs, mainly the Ford Escape.


Another megasite in the South tries to land Toyota-Mazda

The Purchase Area Regional Industrial Authority that covers several counties in Western Kentucky is offering up more than 2,000 acres of free land in an effort to capture the latest automotive assembly plant site search in the Southern Auto Corridor. The site is in Graves County near Mayfield, Ky. According to sources, about 15 states in the South and the Midwest are competing for the proposed $1.6 billion plant that will build electric Toyota Corolla models and a Mazda SUV.





Toyota-Mazda site search could include Louisiana

If it’s true that the Toyota-Mazda project could go to a state void of an automaker, then don’t count out Louisiana. There is a very suitable site located in Alexandria, La., of more than 1,500 contiguous acres called the England Airpark Megasite. It is also located directly adjacent to the Alexandria International Airport. The site is certified with all necessary exhibits and due diligence reports available.





Auto parts maker to expand in Mississippi

Ohio-based S&A Industries announced it will invest $4 million to expand its plant in New Albany, Miss. The company, which will hire 40, makes noise vibration damping products for automakers.


Calsonic Kansei undertakes major expansion at Mississippi plant

The Japan-based automotive supplier Calsonic Kansei will invest $16.33 million to expand its manufacturing plant in Madison, Miss. The company plans to create 98 new jobs, bringing its total employment in the area to about 600. Calsonic Kansei is a supplier to Nissan’s automotive assembly plant in Canton, Miss.





In respomse to Toyota-Mazda search, Chatham County, N.C., approves options on megasites


SB&D’s Shelly Jacobs and Michael Randle with Tim Booras, one of the owners of the Chatham-Siler City site.


Chatham County has approved five-year option agreements for both the Chatham-Siler City Advanced Manufacturing Site and the Moncure Megasite. Both sites are located in Chatham County and both meet the requirements for an automotive assembly facility.


Freightliner to open $27 million logistics center in North Carolina

Rowan County’s huge Freightliner plant, owned by Portland, Oregon-based Daimler Trucks North America, will get a new $27 million logistics center and add more than a dozen new jobs to the 1,400 employees already working there. The idea is to consolidate existing warehouses and pave the way for adding more robot vehicles to the production line.





Volvo doubling South Carolina investment

Volvo Cars is adding an SUV line at its plant that is under construction in Berkeley, S.C. The total investment will be $1 billion as the Chinese-owned automaker celebrates a fourth straight year of record sales. The expansion will add 1,900 workers to the 2,000 that are currently being recruited by the Swedish automaker. The model that is being added is the XC90 SUV. The S60 sedan will also be assembled at the plant, which is expected to open in 2018.


BMW commits to new jobs in U.S.


In the summer quarter, BMW celebrated its 4 millionth vehicle assembled at its plant in Greer, S.C.


BMW AG is the latest auto maker to commit to new jobs at a U.S. factory following criticism from President Donald Trump, saying it will create 1,000 American jobs through 2021 as it works to boost its production of sport-utility vehicles in South Carolina. The jobs are part of a $600 million investment planned for the German automaker’s Spartanburg County factory.


German auto supplier launching new operations in South Carolina

Isringhausen, which is a seating systems manufacturer, is launching new operations in Charleston County in Ladson, S.C. The company, which has 50 plants in 20 countries, will make seats and assemblies for the Mercedes-Benz Vans Sprinter model.


Parts supplier to establish new operation in South Carolina

The Germany-based Frimo Group, a tier one and tier two supplier to the automotive industry, is establishing a new facility in Greenville County, S.C. The $4.1 million project will create 100 new jobs.


Electro-Spec launching new operations in Lexington County, S.C.

Electro-Spec, which is a specialty plating manufacturer for the aerospace and auto industries among others, is locating new production operations in Lexington County. The development is projected to bring $3.1 million in capital investment and create 53 new jobs.


Automotive supplier to build in Charleston County

Knapheide Manufacturing Co. announced recently it is opening a new manufacturing facility in Charleston County, expected to bring an investment of $1.3 million and create 63 jobs. The new plant will install van interiors and bodies for Mercedes-Benz


Netherlands-based manufacturer bringing 71 jobs to Spartanburg County

AWL-Techniek, a producer of high-tech welding machines primarily for the automotive market, will invest $2.53 million to establish its first plant in the U.S. The project also means 71 new hires.





Auto supplier adding 98 jobs in Tennessee

Automotive supplier Cooper Standard will create approximately 98 new jobs at its facility in Surgoinsville. Alongside the new jobs, the company, which is headquartered in Michigan, is investing $1 million in new plant equipment.


Auto parts supplier expands in Tennessee

U.S. Tsubaki Automotive is investing $35.8 million to expand its facilities in Portland, Tenn. The parts supplier will also add 70 new jobs.


Ohio manufacturer sets up shop in Tennessee

Ohio-based Pennant Moldings, a manufacturer serving the automotive and appliance industries, will invest $8.6 million to build a facility in Lebanon, Tenn. The project will create 60 jobs.


Chinese auto supplier to open Tennessee plant

Minth Group, a Chinese manufacturer of body, trim and decorative parts for the automotive industry, will renovate an existing building in Lewisburg, Tenn., for a new parts plant. The $13 million project will generate 200 jobs.





GM unveils new North Texas supplier park



General Motors will establish a new parts supplier park and create 850 jobs — 600 that will be reshored from Mexico — to support its full SUV assembly plant in Arlington, Texas. The park will feature 1.2 million square feet of space. The automaker has almost completed a $1.3 billion expansion of its assembly plant in North Texas that houses about 5,000 workers. The plant is the exclusive producer of the Tahoe, Yukon and Escalade GM models.


Toyota Motor North America expands Plano, Texas operations hub

Toyota Motor North America will form a group focused on new technologies for its Toyota and Lexus vehicles. Called Connected Technologies, the group will employ approximately 100 positions and will include members from Toyota’s existing teams who work on connected vehicles snd information systems along with those working in research and


Continental to expand Seguin, Texas plant

Automotive tech supplier Continental AG is investing $113 million in its Seguin, Texas plant, which produces engine control units, sensors and blind spot detection safety systems. The expansion will create 100 new jobs.





Another megasite planned for the American South

The South is certainly not in short supply of large industrial sites of 1,000 acres or more. Add another one to the mix, this one in Chesterfield County, Va. Right before the recession, a master-planned community in Chesterfield was announced that would have contained 2,449 single-family homes, 1,331 condos, 908 apartments and 470,000 square feet of commercial space. Called Branner Station, the plan was nixed by the Great Recession. Now Chesterfield wants to purchase and develop the wooded property as a 1,700-acre megasite for a large user such an automotive or aerospace plant. The site is near Interstate 95 and the Port of Richmond.


Vehicle glass manufacturer expands in Virginia

Oran Safety Glass, a maker of specialty glass used in the manufacture of buses, military vehicles and trains, is expanding its operation in Greensville, Va. The $4.4 million project will create 55 jobs and retain 75.

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