Driving Progress

Rural Alabama Speeds to Success

By Laura H. Corbin

When big names in the automotive industry – Mercedes, Honda and Hyundai – selected Alabama for manufacturing facilities, the impact was felt throughout the state. Even the state’s most rural communities have benefited.

In fact, these rural communities have taken full advantage of the opportunity to attract not only the major facilities, but automotive industry suppliers as well – and the investments and jobs they bring with them.

Over the past 10 years, as the South has made its place in the global automotive industry, Alabama has been among the biggest players, becoming the home of Mercedes-Benz, International Diesel, Honda, Toyota and Hyundai Motor Co. In 1991, just 60 automotive-related plants were located in the state; today, more than 200 such businesses call Alabama home. According to the Alabama Automotive Manufacturers Association, the industry accounted for 30,180 direct jobs and more than 53,500 indirect jobs in 2002. Direct payroll was $1.4 billion, with indirect payroll of $1.62 billion.

Some 50 automotive-related companies – mostly suppliers to Mercedes, Honda and Hyundai – are located in what are considered rural communities of Alabama, and more are coming every day.

According to the Economic Development Partnership of Alabama (EDPA), these companies employ or will employ well over 12,000 people, and 18 that have announced their investment level will account for more than $400 million in investment in those communities.

“Many rural communities in the state have seized the opportunity to attract investment from the automotive industry,” says Steve Sewell, executive vice president of EDPA. “These communities have done an exceptional job of demonstrating the advantages they offer to automotive suppliers. Automotive-related companies looking in the state have discovered that rural communities offer a dedicated work force, good infrastructure and a very supportive environment for industry.”

The areas are waiting for more automotive growth, he adds. “There are many sites still available in rural communities throughout the state.”

Honda and Mercedes both selected Alabama counties for their facilities, Talladega and Tuscaloosa, respectively. The Mercedes plant, which manufactures the M-Class sports utility vehicle, surpassed initial goals and expectations when it selected Alabama in 1993. In 2000, the company announced a $600 million investment to double production. The plant currently employs more than 2,000, with the expansion expected to bring employment to close to 4,000.

Honda announced its Talladega facility in 1999, investing $440 million. Several expansions have been implemented or announced since, with total investment expected to be $1 billion and total employment reaching 4,300 associates.

One of the latest additions to Alabama’s automotive industry ranks is Hyundai, which announced a Montgomery County location in April of 2002, investing $1 billion and employing 2,000 people when production begins in 2005.

Rural communities aggressively market themselves to the automotive industry, in particular to suppliers of these major plants, according to the EDPA. Today the suppliers that call rural Alabama “home” include: Honda and Hyundai suppliers PPG Industries of Talladega (windshields) and HiSAN Scottsboro of Scottsboro (fuel line and brake line systems); Honda suppliers Rainsville Technology Inc. of Rainsville (molded plastics interior parts), TS Tech Alabama of Boaz (seats), KTH Leesburg Products of Leesburg (minivan frames and components), Kumi Manufacturing Alabama of Clanton (interior and exterior plastic parts), Yachiyo Manufacturing of Alabama of Steele (stamping, welding and subassembly), and Precision Strip of Talladega (steel processing and final inspection services); and Mercedes suppliers Kostal Mexicana of Tuscaloosa (switches, electronic modules and electrical storage cases), and Synchronous Industrial Services of Tuscaloosa (parts subassembly, sequencing and warehousing).

Economic development officials say these rural areas are successful because they offer, among other things, low operational costs, an available work force with a very strong work ethic, and strong local community and governmental support. In addition, they partner with state government and economic development entities throughout Alabama in marketing initiatives such as national and international trade shows.

“In addition, the quality work force, number of training programs available, business-friendly environment and convenient location in the heart of the nation’s fastest-growing region are all elements of success,” Sewell says. “These areas have shown the automotive suppliers that their work force is available as well as highly motivated. Alabama’s rural communities have the advantage of calling on the state’s training programs, such as Alabama Industrial Development Training, which is another benefit to automotive suppliers.”

The mission of Alabama Industrial Development Training is to provide “quality work force development for Alabama’s new and existing industries, and to expand the opportunities of its citizens through the jobs these industries create,” according to the service’s Web site. AIDT, an institute of the State’s Department of Postsecondary Education, encourages economic development through job-specific training. Training services are offered in many areas, and are free of charge to new and expanding industries throughout the state.

Established in 1971, AIDT has been hailed as one of the nation’s most effective worker training programs. It has provided state-of-the-art industrial training to more than 100,000 workers with more than 1,100 companies in 100 technical classifications.

Kumi, KTH Leesburg, and International Diesel of Alabama are only a few of the automotive-related companies currently availing themselves of those services.

In addition to work force and training, rural areas are able to provide the automotive industry with economic incentives, such as tax credits on profits, sales and use tax breaks and an industrial access program through the state department of transportation.

Location, and the ability to provide plenty of room for growth, also make these areas attractive.

Over the past 14 months, according to economic development researchers, of 18 “significant automotive deals” made in the state of Alabama, 11 located in rural areas, including Honda and Hyundai plans.

As the Southern Automotive Corridor gets stronger and continues to establish firmly its position in the global marketplace, rural southern communities and particularly those in Alabama will continue to reap the benefits as manufacturing facilities look to those areas for land and work force.