What former U.S. Army fort is getting a facelift? Who’s investing $11.5M in the Black Belt region? Did you say $1.3 BILLION for next-gen SUVs? Alabama trade officials headed to Africa for business opportunities. All this and more inside today’s business roundup of headlines from across the state:
Alabama News Center: Mercedes to invest $1.3 billion in Alabama plant for next-gen SUVs
Mercedes-Benz plans to invest nearly $1.3 billion in a major expansion at its Alabama assembly plant, creating 300 jobs and preparing the factory to launch production of its next-generation sport utility vehicles.
The new investment comes at a time of dramatic growth for Mercedes’ manufacturing hub in Tuscaloosa County. Output at the 3.7 million-square-foot plant is targeted at 300,000 vehicles this year, an increase of 60 percent from the 2013 production level. At the same time, Mercedes has introduced new models to its Alabama production line-up, including the GLE Coupé this year.
Gov. Robert Bentley attended a meeting this afternoon of the Tuscaloosa County Industrial Development Authority, where Mercedes officials laid out their plans. “It’s great to be in Tuscaloosa to announce that Mercedes will invest another $1.3 billion and create 300 new jobs in Alabama,” Bentley tweeted.
As part of the latest expansion project, Mercedes will add a facility where its most technologically advanced SUVs will be assembled, according to the Economic Development Partnership of Alabama. The new jobs will include high-paying engineering positions.
“The significant new investment Mercedes is making to expand its Tuscaloosa County manufacturing facility shows the company’s strong commitment to advancing automotive technology,” said Greg Canfield, secretary of the Alabama Department of Commerce. “Over the past 20 years, Alabama has developed a productive partnership with Mercedes, and the company’s Alabama workforce has proven its capabilities through repeated expansions and model launches.
“This is a ‘Made-in-Alabama’ success story with global connections,” Canfield added.
ROUNDS OF EXPANSIONS
Mercedes, which produced its first Alabama-made vehicle in 1997, has invested a total of more than $4 billion in its sprawling Tuscaloosa County campus, after repeated expansions. The plant’s workforce now numbers around 3,500.
Besides the new GLE Coupé, the models made there are the C-Class sedan, the flagship M-Class (renamed the GLE-Class) sport utility, and the GL-Class (renamed the GLS-Class) full-size SUV. In 2014, the Mercedes plant produced 232,000 vehicles, pushing its cumulative production total past 2 million.
Mercedes suppliers have also been expanding or establishing new operations in Alabama. In August, parts maker SMP announced plans for a $115 million plant in Tuscaloosa County that will eventually create 650 jobs. Also last month, Kamtek announced a $530 million expansion of its Birmingham manufacturing facility that will add 350 jobs.
Alabama News Center: Airbus supplier reveals expansion details for Mobile Aeroplex facility
In a move one official called “classic economic development,” MAAS Aviation received tax abatements totaling nearly $2.2 million Wednesday for construction of a proposed $13 million second paint facility at Mobile Aeroplex at Brookley.
News of Dublin, Ireland-based MAAS’ plans to expand its footprint in Mobile broke during the second day of the 2015 Paris Air Show in June, but a company representative said the $39 million investment figure disclosed at that time embodied several long-term investment proposals intended to strengthen its position as an integral supplier to aircraft manufacturer Airbus. The proposals would expand MAAS’ U.S. capabilities to target third-party original equipment manufacturers; maintenance, repair and overhaul providers; and potential military clients.
“We are a very specialized niche business … We bring world-class standards … and we complement what already exists,” Tim Macdougald, chief financial officer and commercial director of MAAS Aviation Brookley Inc., told members of the Mobile Industrial Development Board.
MAAS is nearing completion on a paint facility dedicated to servicing the A320 aircraft assembled at the recently inaugurated Airbus U.S. Manufacturing Facility at Brookley.
That paint facility, Macdougald said, will employ 52 within three years and pay average annual salaries of $41,000. That equates to MAAS pumping an estimated $4.4 million into the Mobile economy each year, including nearly $2.2 million in payroll, he said.
Those jobs are in addition to the 26 MAAS will have dedicated to the Airbus paint shop.
The new twin-bay painting facility – featuring a state-of-the-art vertical airflow system – will be capable of handling aircraft as large as the Boeing 757 but will also target maintenance, repair and operations painting of third-party aircraft with focus on U.S operators of single-aisle aircraft.
“Clearly, Airbus gives us an opportunity to expand our footprint here … but Airbus won’t commit to a second shop until the first is at capacity; therefore, we need an external shop,” Macdougald said, noting the byproduct is MAAS’ increased “relevance to third-party work.”
MAAS operates two paint shops in Hamburg, Germany (with a third under construction) as well as a facility the Netherlands and has a long-term contract as the exclusive paint service provider to Airbus Americas Inc.
Macdougald characterized the 30-year-old company as the “Neiman Marcus of aircraft painting” because of its focus on low-volume, high-quality craftsmanship.
Per recently passed “Made in Alabama” jobs incentives legislation, MAAS is qualified to request 20-year abatements for the expansion. Although the Mobile Industrial Development Board is authorized to approve municipal, county and state abatements through an initial 10-year period, its authority to extend the abatements an additional 10 years applies only to the city’s portion of the request. MAAS must secure separate approval for the second 10-years from both Mobile County and the state of Alabama
In recommending the project’s approval, Troy Wayman, the Mobile Area Chamber of Commerce vice president of economic development, told the board the MAAS project will generate nearly $16.3 million in collectable tax revenue during the course of the abatement. “When we recruit companies like Airbus, that’s not the end of the process,” Wayman said, calling MAAS a perfect example of the ancillary development the area is beginning to see.
“This will only make us more attractive to others companies outside Airbus,” he said.
Following the vote, Industrial Development Board Chairman Mike Saxon, vice president of Alabama Power’s Mobile Division, said the ripple effect already being felt from the $600 million Airbus project is exhilarating.
“That is classic economic development,” Saxon said.
Macdougald said the implications run deeper for MAAS.
“We have no financial history in the United States,” he said, noting the board’s abatement approval “levels the playing pitch” and will allow MAAS to co-locate at Brookley alongside Airbus and VT Mobile Aerospace Engineering, the largest MRO provider in the world.
“We’re hoping this is the beginning of something, the beginning of a journey,” Macdougald said, noting MAAS’ discussions to date with the Singapore-based VT MAE have focused on ways to “directly complement existing infrastructure.”
“This project is clearly a high-end extension of the Airbus project,” he said, calling MAAS’ Mobile venture a “prime example” of the Airbus investment paying off.
“What you have here in Airbus is only the beginning,” Macdougald said.
Birmingham Business Journal: Delta Regional Authority to invest $11.5M in projects for Black Belt region
The Delta Regional Authority and its partners on Thursday announced that they will be investing nearly $11.5 million in federal, state, and local resources to support small business owners and entrepreneurs, workers and their families in Alabama’s Black Belt region.
The support will be given by improving economic development, workforce training, and job creation in the region, according to a release from Gov. Robert Bentley‘s office.
There will be a total of nine projects, in the counties of Macon, Clark, Conecuh, Monroe, Sumter and Wilcox – in addition to other locations in the region.
“The DRA is excited to announce another year of investing into the people, small businesses, and infrastructure that make the Alabama Black Belt a great place to live,” said Chris Masingill, federal co-chair of the Delta Regional Authority. “These investments strategically leverage funding for projects that will help to address the workforce training, transportation, and public service needs of our communities while driving economic development and growing small businesses and entrepreneurs.”
The nine new investments will include a new business incubator, workforce training programs, and infrastructure improvements for business locations and expansion.
The initiative will leverage $1 million in federal resources into nearly $11.5 million in total public and private investment for Alabama Black Belt communities.
These investments are expected to generate more than 1,000 jobs for local residents, develop 180 entrepreneurs and business owners, and train 100 workers.
The investments are made through the DRA States’ Economic Development Assistance Program – the agency’s main federal funding program that invests in basic public infrastructure, transportation infrastructure, workforce development, small business and entrepreneurship, and health access projects in the 252 counties and parishes of the eight-state Delta region.
“Alabama’s partnership with the Delta Regional Authority is important to the citizens of the Black Belt Region,” Bentley said. “There is a great need for improvements of infrastructure, workforce development and healthcare access in the region. We can leverage a minimal amount of state dollars and receive major federal investment dollars for our state. This DRA funding will play an integral part in helping with important improvements and increasing opportunities for economic growth in Alabama.”
The U.S. Army played taps to Fort McClellan years ago, but the property may be on the verge of a new type of reveille.
Located in the foothills of the Appalachian Mountains, Fort McClellan is known mostly for its long run as an Army training camp, producing soldiers and officers of the Chemical Corps, Military Police and other ranks. For more than 81 years, thousands of American troops spent time at the Anniston base.
These days the soldiers are gone, families have relocated and the once booming community is searching to regain its glory.
After the 1980s, with shrinking defense budgets and ever-increasing costs, the U.S. military was forced to look for opportunities to decrease expenses. Officials on the Base Realignment and Closure Commission (BRAC) concluded the fort should be closed in the early 90s.
After unsuccessful votes in 1991 and 1993, this year marks the 20th anniversary of the BRAC decision to permanently close the fort in 1995. The official closing ceremony was held on Fort McClellan on May 20, 1999.
In response to decaying former military bases in the state, then-Gov. Bob Riley signed a new law in 2009 authorizing development authorities to oversee development of property on military installations that were closed as the result of BRAC actions.
The McClellan Development Authority was created and charged with overseeing the economic development and growth of McClellan. In spring 2010, the MDA became a non-profit public corporation charged with the future economic development of the former fort.
Since the MDA began overseeing the redevelopment of McClellan, more than 3,100 acres of property are back in use, 3,000 are currently available for sale, and a little more than 3,000 acres are set to go up for sale in the next three to five years, according to Robin Scott, MDA executive director.
Phil Webb, owner of Webb Concrete and Building Materials, an Anniston based company with locations across East Alabama, serves as the chairman of the MDA.
“To me it is all about job creation and the redevelopment of McClellan,” Webb said. “The process takes time but there are a lot of accomplishments to be proud of.”
Since the creation of the MDA:
- 125 dilapidated structures been demolished,
- 197 acres of new industrial and commercial parcels,
- more than $6.3 million in property has been sold, and
- more than 400 new jobs have been created.
Additionally, last year marked the end of a successful 11-year ordnance cleanup project, which opened nearly 2,800 additional acres of land for development; all completed with zero safety incidents.
With the MDA leading the charge on the restoration and growth of McClellan, officials say the potential is immeasurable.
There is confidence that soon McClellan can soon write a new chapter and the bugle can blow on a renewed lively, booming community.
Commerce Secretary Greg Canfield will lead a trade and business development mission to South Africa and Tanzania this month that will permit Alabama businesses to explore partnership and export opportunities in a fast-growing region.
Representatives from six Alabama companies will join Secretary Canfield and international trade specialists from around the state on the 10-day mission that officially kicks off in Johannesburg on Sept. 14.
While in South Africa’s largest city, the Alabama delegation will participate in “Trade Winds Africa,” a conference organized by the U.S. Department of Commerce that highlights business opportunities in Sub-Saharan Africa. Delegation members also will participate in pre-arranged consultations with senior U.S. diplomats representing commercial markets from as many as 19 African nations.
“The upcoming conference and trade mission in South Africa will give participating Alabama companies the opportunity to take advantage of an Africa-focused business forum and networking events as well as individual business matchmaking appointments,” Secretary Canfield said. “South Africa is a powerhouse on the continent and has been identified as an emerging market with broad interests from our Alabama exporters.”Following the South Africa stop, Secretary Canfield will lead a group of economic development officials from Alabama to Dar es Salaam, Tanzania, to explore trade and investment opportunities and build on relationships developed when a Tanzanian delegation visited Alabama in 2013.In addition, some of the Alabama companies on the trade mission have scheduled appointments in Tanzania, Ghana and Mozambique.
Alabama trade officials say South Africa and other parts of the continent south of the Sahara Desert represent promising markets for businesses in the state. Between 2011 and 2015, seven of the world’s 10 fastest-growing economies were in Sub-Saharan Africa.
Alabama companies exported nearly $375 million in goods to African nations in 2014, with transportation equipment and chemicals accounting for more than half of the total, according to data from the Alabama Department of Commerce.
South Africa has been the top destination for Alabama exports by a large margin. In 2014, exports to South Africa topped $212 million, an increase of 33 percent from the figure recorded in 2012, according to Commerce data.
“Sub-Saharan Africa boasts some of the fastest growing economies in the world,” said Hilda Lockhart, director of Commerce’s International Trade Division. “This growth stems from a very vibrant private sector that’s now being supported by an improved business climate. Because the area has a growing middle class and an increasing demand for consumer goods, Alabama Is looking to find partners and to capture what it has to offer.”
Companies scheduled to participate in the Alabama trade mission to South Africa are:
- VON Corp., a Birmingham-based maker of high voltage testing and cable fault locating equipment, as well as other products for electric utilities. Over the past decade, exports have become an increasingly important part of the company’s business.
- Knox Kershaw Inc., a Montgomery-based manufacturer of railway maintenance equipment that took part in a trade mission to Southeast Asia in March 2014.
- Baron Services, a Huntsville-based developer of Doppler radar and weather data analysis technologies, as well as integrated weather systems for the National Weather Service and international governments.
- The Dixie Group, a Saraland-based marketer and manufacturer of carpet tiles, broadloom and rugs for commercial applications.
- Mapusoft Technologies Inc., a Mobile-based software firm that counts many big companies around the world as customers.
- Green Solar Manufacturing, a Birmingham-based engineering, construction, and technology service provider to commercial and government customers, with a special focus on Africa.
Representatives from the Mobile Area Chamber of Commerce, the Center for Economic Development at the University of Alabama, and the U.S. Department of Commerce’s Birmingham office are also taking part in the Commerce-led trade mission.