By the BF Staff
From the January/February 2018 Issue
Business Facilities: Huntsville recently was chosen as the site for Toyota-Mazda’s new $1.6-billion auto assembly plant. What were the key factors that sealed the deal, one of the most coveted economic development projects in the nation?
Greg Canfield: There are many reasons these two great automakers decided to locate their joint-venture manufacturing facility in Huntsville and Alabama. First, we have built a trusting relationship with Toyota, whose engine plant in Huntsville is undergoing its fifth expansion. In other words, Toyota is familiar with Alabama’s advantages. Drilling down into that, a major reason for Alabama’s selection is the quality of the state’s workforce and our excellent job-training programs. To put it simply, workers in Alabama have proved they can build vehicles that are in demand around the world. ‘Made in Alabama’ is a point of pride for these workers, not just a slogan.
In addition, Alabama has a pro-business, low-cost environment that allows manufacturers to succeed and thrive. We also have a track record of working together as a team to provide the critical support that helps companies expand their operations over the years. And while we put together a competitive incentive package, incentives would never be the sole reason that corporate decision-makers select a site for an investment totaling $1.6 billion.
BF: Huntsville has long been a high-tech hub and a center of the U.S. space program. What kind of workforce development initiatives have you undertaken to ensure that the skilled workforce of this region is able to meet the demands of new growth sectors for an available workforce with high-tech skills?
GC: In Alabama, we understand that the best companies on the planet can’t operate without a steady supply of talented, motivated workers. We know that economic development efforts in today’s technology-focused business world depend heavily on high-quality workforce development programs that can deliver a pipeline of workers.
AIDT, the state’s primary workforce development agency since 1971, remains the centerpiece of our efforts. At the same time, we have been making comprehensive improvements to our workforce development programs. We’ve streamlined these programs to make the system more efficient, convenient and responsive for employers. We’ve also rolled out an initiative called AlabamaWorks that seeks to better connect businesses with job seekers and help prepare workers by linking them to career and job-training opportunities.
BF: Alabama has an unmatched record of attracting foreign direct investment to the state, going back to Mercedes-Benz’s arrival in 1993. What makes Alabama so attractive as a destination for FDI?
GC: The bottom line is that businesses from around the globe continue to find a welcoming home in Alabama. In the last five years alone, more than $9 billion in foreign direct investment has poured into the state, bringing more than 15,000 jobs. These investments have been critical because they accelerated growth in key economic sectors such as automotive, aerospace and shipbuilding.
Mercedes-Benz’s success in Alabama served to build a foundation for future foreign investment in the state. Mercedes found what it needed in Alabama, and so have global companies such as Honda, Hyundai, Toyota, Airbus, Austal, and many others. They’ve all discovered they can assemble a high-performing workforce, build world-class products, and thrive in Alabama.
BF: With Mercedes-Benz, Hyundai and Honda already producing vehicles in Alabama (with Toyota and Mazda soon to join them), Alabama has established itself as the top U.S. automotive hub. U.S. automakers have indicated they intend to speed up the transition to electric and/or autonomous vehicles. Is Alabama also poised to take a leadership position in the production and development of electric cars and autonomous vehicles?
GC: Mercedes-Benz’s $1 billion expansion project, announced in September 2017, will benefit Alabama in several ways. Most significantly, the automaker’s decision to build a battery factory and launch electric vehicle production in Alabama positions the state as a leader in a disruptive technology that is poised to dramatically change the direction of the auto industry.
It’s also worth noting that the development of electric vehicles is a key element of the joint venture between Toyota and Mazda. In the future, it’s certainly possible that the partnership’s Alabama plant will be involved in the production of advanced electric vehicles. No question about it, we’d like to see that.
All of this sends a powerful message that automakers operating in the state will be involved in the industry’s most advanced technologies. That’s important because it shows that Alabama is ready for what’s coming next in this global industry.
BF: John Soules Foods recently announced it plans for a $110-million production facility in Chambers County, a project that will create 510 jobs. Is food processing a significant growth sector in Alabama? Has the Department of Commerce initiated any new programs aimed at expanding rural development?
GC: In recent years, the state has benefited from several new food processing facilities, reinforcing the fact that agriculture and food production represent an important segment of the economy in rural Alabama. Bringing economic development projects to rural areas can be a challenge, but we have managed to locate auto suppliers, manufacturers, and logistics operations in these areas.
The team at the Alabama Department of Commerce has worked with the Economic Development Association of Alabama and others to refine strategies to improve the competitiveness of rural areas for projects. We’ve also introduced enhanced incentives for projects in counties with fewer than 25,000 people. That’s already come into play on a dozen projects with nearly $150 million in capital investment and more than 325 new jobs.
BF: The U.S. Air Force has decided to base its new F-35 fighter jets at the 187th Fighter Wing’s base at Dannelly Field in Alabama. How big a boost will this give the local economy?
GC: The decision means the 187th Fighter Wing will receive the Air Force’s latest fighter aircraft to replace its fleet of aging F-16 jets. That ensures a future for the unit and around 1,000 jobs in the Montgomery area. The Air Force decision is also expected to spur significant job creation and new investment in the Montgomery area.
In addition, the F-35 is the nation’s more advanced fighter, so the decision is a testament to Alabama’s status as a leading aerospace state.