HUNTSVILLE, Ala — Automaker Toyota has announced it will partner with Mazda to build a $1.6 billion U.S. assembly facility and Alabama is among 11 states competing to become its home.
The plant is expected to employ 4,000 workers and the companies have set a 2021 target date for its opening.
Alabama Sen. Arthur Orr, R-Decatur, has been actively involved in industrial recruitment for several years. He said Alabama would clearly be interested in the plant and points to the state’s successful relationships with carmakers Mercedes, Hyundai and Toyota, which operates an engine in Huntsville.
“Of course the state would be very interested in that,” Orr said. “Because of our workforce, we could certainly do those jobs. We’ve made a lot of progress in the world of automobile manufacturing, starting with the Mercedes plant in the early ‘90s.”
Orr said the recruitment process basically starts with the company outlining what it’s seeking in terms of an appropriate site.
“It would say we need, for example, a 1,000 acres, and so much electricity, roads, etc,” he said.
He said tax issues and workforce are weighed and the usefulness of the site is a central consideration.
“They look at the infrastructure, rail, sometimes barge, sometimes air connections, port of entry,” Orr said.
Industrial mega sites, over 1,000 acres, are expected to include interstate access, utility service capable of handling the large new load and possible rail access. Those sites are considered most attractive to automakers.
Huntsville has a certified Mega Site of more than 1,200 acres that could fit the bill. Orr said there are a number of other possible sites in Alabama. State economic development officials with the Alabama Department of Commerce have experience recruiting auto makers.
It starts with proposed sites.
“Then they would look around the state and say ‘What sites do we have here in Alabama that would qualify and meet these specifications,’” Orr said.
Alabama also offers worker training for new industry through AIDT. Orr said it is a key piece of any recruiting pitch.
“They do a magnificent job, recognized around the country as a real strong part of any Alabama proposal,” he said.
The competition is expected to be fierce for the site. Alabama’s low unemployment rate and successful recruitment of the auto companies may present a bit of a challenge in convincing site selection specialists for Toyota-Mazda that there are enough available workers in the state.
Orr thinks it’s a challenge that can be overcome.
“We’ve got the workers available, now unemployment obviously is low, and it would be a challenge,” he said. “But with a very large company with good paying jobs, they would attract a lot of workers wherever they decide to land.”
Orr said he helped Alabama find a smarter way to provide companies incentive for locating in the state. Under state law a company can receive rebates through the state – basically getting a percentage of the state income tax paid by its employees.
“We pay a five percent income tax here in Alabama,” he said. “In a project agreement it could say, ‘We will give back to the company 40 percent of that 5 percent income tax.”
Factors like education and community support will play into a company’s decision, Orr said.
And, companies give major consideration of the incentives states and local communities will offer.
While it’s known that Alabama is pursuing the auto plant, the details on any incentive package won’t be publicly released until a deal is reached.