Alabama Adds Proof to the Pudding (page 3) -- Site Selection magazine, May 2000

Alabama Adds Proof
to the Pudding
(cover)

Northern Alabama Wins the Other Mega-project

Honda Locates
to Central Alabama

Activity Pours into Southern Alabama

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Birmingham at a Glace Honda Locates to Central Alabama

Central Alabama, too, has seen a wide array of industries locating and expanding throughout the region. The area has seen growth in everything from auto-related manufacturing and information technology to distribution and aluminum extrusion. Of course, with the Honda announcement, auto-related manufacturing is the big news in central Alabama.

"The story that's got everybody abuzz is Honda," says Greg Barker, executive vice president of the Birmingham Metro Development Board. "Honda has announced that they're going to put a production facility just outside the Birmingham area [in Lincoln]. They'll assemble 120,000 vehicles and 120,000 engines a year there."

And now with both Mercedes and Honda in central Alabama, the supply chain has really taken off. Take for example, CRH North America, a second-tier supplier of seat frames. CHR announced last June that it will open its first North American manufacturing plant in Clanton, just south of Birmingham on I-65. The new facility will total 200,000 sq. ft. (18,581 sq. m.) and employ 300 workers.

In Sylacauga, southeast of Birmingham, Teksid, a subsidiary of Italian automaker Fiat, will invest $80 million in a 300,000-sq.-ft. (27,871-sq.-m.) plant, where it will produce aluminum engine castings. The plant will produce approximately 500,000 engine blocks and cylinder heads a year, employing some 450 people. And although there are no plans to supply Honda or Mercedes, says Massimo Fracchia, CEO of Teksid North America Group, it does have contracts with General Motors, Ford Motor and DaimlerChrysler.

Donaldson Co. also opted to establish a new 160,000-sq.-ft. (14,864-sq.-m.) muffler manufacturing plant in Auburn. The plant will create 170 new jobs over the next year.

Mercedes, Bessemer, Alabama Combining the rapidly expanding auto industry with central Alabama's growing distribution industry, Mercedes-Benz U.S. International opened an $8 million parts consolidation center in Bessemer, creating 300 jobs. The 350,000-sq.-ft. (32,516-sq.-m.) center will enable the company to ship M-class parts to Austria for final assembly and to the rest of the world for service maintenance.

Mercedes, however, is only one of many companies finding distribution opportunities in central Alabama. The region's interstate network, which includes I-65, I-20 and I-85, is too tempting to resist for companies looking to serve the Southeast market.

ABOVE LEFT: Mercedes continues to add to Alabama's economy with its recent
announcement to open an $8 million parts consolidation center in Bessemer.

For example, PCS Health Systems, a mail-order pharmacy, has also set up shop in the Birmingham area, where it will employ 600 people. The landing of this $11 million capital investment, Barker says, is significant for two reasons. "One is that they will employ a significant number of pharmacists, and that will take advantage of some of the health-care and medical-related education we have with our pharmacy schools," he explains. "But it also validates Birmingham from a distribution standpoint, specifically small-product distribution that uses the UPS and FedExes of the world."

Other distribution firms looking to take advantage of central Alabama's assets include OfficeMax, Wal-Mart and Saks. OfficeMax is investing $45 million to establish its 600,000-sq.-ft. (55,742-sq.-m.) Southeast PowerMax regional distribution center in McCalla, while Wal-Mart is investing $34 million in an 880,000-sq.-ft. (81,755-sq.-m.) facility in Opelika. Saks will build a $30 million, 180,000-sq.-ft. (16,723-sq.-m.) center in Steele.

In the telecommunications arena, Birmingham won a major announcement last year by TeleTech Holdings. The Denver-based firm will create 650 new jobs initially, increasing to more than 800 jobs within the next two years. TeleTech provides customer and product support services for UPS, AT&T, GTE and other Fortune 500 firms.

Nearby Montgomery is becoming a magnet for IT companies, according to Al Cook, senior vice president with the Montgomery Area Chamber of Commerce. Montgomery has had more than 100 IT-related companies locate facilities there in the past 15 years, including such names as ADS, Lockheed Martin, Unysis and Oracle. "We were named one of the top 20 sites for electronics by the Electronics Industry Yearbook," Cook adds. "Our IT cluster is a little different from Huntsville's in that ours is more software development-oriented."

IT firms are attracted to Montgomery for its well-trained work force, says Cook, which, in part, has been bolstered by the Maxwell Air Force Base. Maxwell AFB is home to the Standards System Group, the software development group for the U.S. Dept. of Defense. In addition, Montgomery is also currently establishing the Brubaker Technology Magnet High School, a state-of-the-art high school that will be involved in work-force development for the IT industries.

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