They?re living large in Alabama economic development
circles, reveling in landing one of the year?s most coveted deals: Honda?s
US$450 million, 1,500-employee plant, a 1.7-million-sq.-ft. (153,000-sq.-m.)
behemoth that will rise on a 1,350-acre (540-ha.) tract in Lincoln, a small
Talladega County town of some 3,600 residents 35 miles (56 km.) east of
Birmingham.
Undoubtedly some of the heartiest partying over Honda?s star falling on
Alabama is unfolding in Montgomery at 1108 South Perry St., inside the
governor?s mansion that?s home to Don Siegelman, who spearheaded the
successful Honda wooing.
Siegelman, however, acknowledges that he was only Alabama?s most high-
profile performer. The Economic Development Partnership of Alabama and the
Alabama Development Office also played major roles in the state?s well-
coordinated efforts, as did a number of local area groups, the governor says. (To
access the state?s economic development groups, click on Alabama Links at
www.edpa.org).
Modesty aside, though, this deal maybe doesn?t happen without Siegelman
residing at1108 South Perry.
Birmingham Begins Honda Hunt
Alabama got into the Honda hunt in September of 1998, when
the Japanese automaker?s site selection consultant contacted the Metropolitan
Development Board in Birmingham.
Given Honda?s close-to-the-vest style, it?s unlikely the full site search list will
ever surface. American Honda Executive Vice President Tom Elliott says the
automaker “briefly considered” U.S. Midwest locations, with Tolono, Ill.,
reportedly getting the longest look. But when Tolono was declared a no-go,
Honda?s search narrowed to Southern sites, with Richmond, Va., and
Commerce, Ga., getting major consideration.
Ironclad Confidentiality
Even with eight state sites under consideration, Alabama
officials kept Honda negotiations under a fog of secrecy thick enough to shut
down Birmingham?s airport. They made sure Honda?s name wasn?t uttered until
Honda wanted it to be.
Siegelman set the tone for the iron-clad confidentiality. Even with the media
rumor mill running white-hot, state officials refused comment, wisely avoiding the
prematurely crowing that has inadvertently blown some potential major deals in
the past. The release announcing the Honda press conference didn?t even use
the company?s name, only mentioning “a major announcement.”
Likewise, representatives from the five-county area (Calhoun, Etowah,
Jefferson, St. Clair and Talladega counties) where the Honda plant is likely to
have its greatest economic impact signed confidentiality agreements.
No Incentives Spats
Siegelman also sagely avoided an incentives brouhaha,
despite Alabama?s forking over a hefty $158.7 million package to land Honda.
That was a huge contrast to 1993, when the state doled out $253 million in
incentives to land the first U.S. Mercedes-Benz plant in Vance, Ala. Soon after,
state school officials refused to hand over education funds to bankroll the
incentives, touching off a firestorm of controversy that torpedoed then-Gov. Jim
Folsom?s reelection bid.
Siegelman, however, paved the path so smoothly that the Alabama
Legislature unanimously approved the incentives. In addition, a week after
Honda?s announcement, Siegelman pushed through a sweeping plan to reform
Alabama?s much-maligned tort laws.
And Alabama?s long-term payoff could be even bigger. Given auto
manufacturing?s just-in-time nature, a supplier-job bonanza is likely. And with the
Alabama plant manufacturing minivans and/or sport utility vehicles, Honda?s
hottest U.S. lines, total employment at the Lincoln location (which will also
manufacture V-6 engines) could hit 3,000, some analysts say.
Take a Cultural Bow
Other major factors in the decision, Honda officials say, were
Alabama?s strong infrastructure system and the large labor pool in the Lincoln
area, where layoffs at a Goodyear plant and a U.S. Army base have been
eliminating some 3,000 jobs a year.
Siegelman and the Alabama team also handled cultural differences well,
providing more than tight-lipped discretion.
American Honda CEO Koichi Amemiya upped the cultural sensitivity ante
when the deal went public, quoting a Lynyrd Skynyrd song. It is with great pride
and excitement for the future that we can now say the words ?Sweet Home
Alabama,? Amemiya said.
Siegelman countered with Japanese-like courtliness, saying, Welcome to
Alabama. Our friendship will last forever. And the governor said it in Japanese.
SS
