I

n the automotive industry, the ultimate confirmation of wise site selection is a
plant expansion.
     In Alabama, the "proving grounds" for international automakers, a record run of automotive manufacturing announcements confirms that the state and its growing list of new plants have passed the test.
     Consider the following deals over the past 12 months:

• DaimlerChrysler announced on Aug. 28, 2000, that it will expand its Mercedes-Benz M-Class production facility in Vance near Tuscaloosa by US$600 million, adding 2,000 new workers to the 1,900 already employed at the site.
• Lured by the successful six-year run of Mercedes in Alabama, Japanese automaker Honda announced in April 2000 that it will build a $440 million Honda Odyssey minivan and engine plant in Lincoln, employing 3,000 workers in Talladega County.
• Japanese automaker Toyota an-nounced on Feb. 6, 2001, that it will build a $220 million, 350-job plant in Huntsville where workers will machine and assemble V8 engines for Toyota's full-size Tundra pickup truck.
• A joint venture of several Japanese and American companies announced last spring that it will locate a $46 million facility for stamping and welding minivan frames for the Honda Odyssey in Leesburg. The plant is expected to employ 150 workers by September 2002.
• On March 7, 2001, CRH North America announced a $21 million expansion of its Clanton manufacturing plant, creating 345 new jobs in Chilton County. The company supplies parts to Mercedes-Benz, Volkswagen, Audi and BMW.

     These and other automotive projects reveal what DaimlerChrysler executives have known for some time: Alabama is a good place to build automobiles.
     "The worldwide demand for the M-Class has exceeded all expectations and shows that Mercedes-Benz made the right decision when it entered the sport utility market and came to the U.S. to build it," says Juergen Hubbert, a DaimlerChrysler board member for Mercedes-Benz and smart passenger vehicles. "Our success would not have been possible without the great partnership we formed with the state of Alabama and without the strong work force that we have found here. Alabama has become an important home for Mercedes-Benz."
     The DaimlerChrysler investment is especially instructive, considering that many Wall Street analysts predicted in 1993 that Mercedes-Benz would never make it in Alabama. They were wrong.
     After originally investing $300 million to build its first American assembly plant in Vance, the plant was expanded twice to increase production to 80,000 units per year. With the latest expansion, Mercedes will increase its total capital investment in Alabama to nearly $1 billion and will employ about 4,000 workers.
     The company's current 1.2 million-sq.-ft. (111,480-sq.-m.) facility sits on about 300 acres (122 hectares) of a 966-acre (391-hectare) site. With the addition of the new 1.5 million-sq.-ft. (139,350-sq.-m.) facility, Mercedes will occupy a total of 600 acres (243 hectares). Build-out is slated for late 2003.
     Upon completion of the plant that will build the successor to the M-Class, total production capacity in the Tuscaloosa area will be 160,000 vehicles annually.
     "The Tuscaloosa plant has only been in operation three years, yet in that short time it has established itself as a world-class production site for Mercedes-Benz," says Helmet Petri, head of worldwide production for Mercedes-Benz. "It has become a learning field for our entire company and an example of best practices. We look forward to the growth we'll realize in Tuscaloosa."
     The economic impact of Mercedes on Alabama is enormous. A recent study showed that the M-Class assembly is a $1.3 billion industry in the state, creating more than 10,000 jobs in a state of 4.5 million people. An estimated $1 billion is spent on automotive supplies in Alabama each year. The success of Mercedes has also opened doors for Alabama to pursue other manufacturers.
     Alabama Gov. Don Siegelman is just one of many who are glad that Mercedes took a gamble on Alabama in 1993. "The partnership between Mercedes and Alabama provides hope and dreams of a better quality of life to Alabama families," he said at a press conference announcing the latest expansion. "In 1993, Mercedes took a chance. Today, thanks to the continued dedication and commitment to excellence that DaimlerChrysler and Alabama workers share, Alabama continues to stake its claim as a formidable force in the automotive industry and in the world of business."
     Steve Sewell, marketing director for the Economic Development Partnership of Alabama, says it is no accident that DaimlerChrysler, Honda and Toyota have all given a strong vote of confidence to Alabama. "These companies need to find the work force they need to be successful, and the Alabama Industrial Development Training (AIDT) program is one of the best in the nation," he says. "Alabama is also very appealing to international firms. They are looking for infrastructure and a state with a business-friendly environment. We work very hard to meet the needs of these companies when they come here."