A defining moment for Alabama's economic future came on Sept. 30, 1993, when executives from Mercedes-Benz arrived in Tuscaloosa and made an announcement that shocked the global business community.

In the months leading up to the event, Mercedes teams had been researching sites in at least 30 states for the site of the company's first U.S. manufacturing facility, and on that day company executives traveled to Alabama to announce the decision.

For many, the news came as a bolt from the blue: Alabama had never produced automobiles and had little presence in the industry.

But Mercedes found what she was looking for on 900 rolling, pine-lined acres just outside Tuscaloosa.

Initial investment in 1993 was $400 million and planned to employ 1,500 workers. The project quickly grew beyond that, becoming a true watershed moment for the state of Alabama.

For many, it became “pre-Mercedes” and “post-Mercedes.”

Fast forward to 2023. MercedesThrough multiple expansions, the company has invested more than $7 billion in its Alabama operations and grown its workforce in Tuscaloosa County to more than 6,300. More than 4 million vehicles have rolled off the company's assembly lines.

Importantly, Mercedes' move into Alabama paved the way for other automakers attracted by a variety of factors, including Alabama's low costs, top-notch worker-training programs, abundant labor force and status as a labor-rights state.

today, Honda, Hyundai And  Mazda and Toyota PartnershipIt partnered with Mercedes to operate a large assembly plant in Alabama. Toyota It also operates engine plants, and this concentration has cemented the state's reputation as an automotive powerhouse.

“For more than 20 years, the automotive industry has been a primary driver of economic growth across Alabama, providing high-paying jobs for our residents and first-class workplaces for our communities.” Governor Kay Ivey“The impact this industry has had on Alabama is immeasurable, but what really gets me excited is that the future for this industry in our state is only going to get brighter.”

Growth Engine

The industry is growing rapidly.

Since the first Mercedes M-Class was produced in February 1997, automakers have assembled more than 15 million vehicles in Alabama. The state's auto plants' total production capacity now exceeds 1.3 million vehicles per year, ranking Alabama in the top five in the U.S.

Direct employment in Alabama's auto manufacturing sector has soared from just a few thousand in 1997 to more than 50,000.

Automobiles are Alabama's No. 1 export. Alabama-made auto exports are expected to reach $11.2 billion in 2023, making Alabama the No. 1 in state-by-state automobile export rankings.

Alabama's five automakers have invested a combined total of about $15 billion in assembly operations in the state, according to data from the Alabama Department of Commerce.

Capital investment of this magnitude underscores Alabama's auto industry's role as a dynamic growth engine for the state's economy. Meanwhile, auto industry investment continues to grow across the state, much of it tied to EV production.

According to the Department of Commerce, automakers with factories in the state have invested approximately $2.1 billion in EV production infrastructure since 2020, resulting in the creation of approximately 2,500 new jobs.

Workforce preparation

Alabama's commitment to workforce development, which has contributed to the growth of the state's auto industry, is unwavering.

November 2023, AIDTAlabama's leading workforce development agency, announced plans for the construction. $30 million workforce training centerIn Decatur, there will be a focus on electric vehicles and emerging technologies to ensure the state's auto industry reaches its next stage of growth.

This facility is Alabama Robotics Technology Parkis a unique $73 million center operated by AIDT that helps companies train their employees in advanced research and development and manufacturing techniques.

“Our primary goal is to help the state's automakers continue to grow during the transition to electric powertrains and embrace new and ever-evolving technologies,” the AIDT director said. Ed Castile“We just want to make sure we have a workforce that has the capabilities to thrive in this new environment, so this is a natural extension of what we're doing with the Robotics Park.”

AIDT has been involved in the growth of Alabama's automotive industry since its early days helping organize and train Mercedes' early workforce. Over the course of more than 30 years, AIDT has provided automotive training to more than 125,000 people.

“We are fully partners with every automotive OEM and nearly all of their suppliers in the workforce space, recruiting, evaluating and training their workers over the years and through all of our expansion,” Casteel said. “Our automotive companies continue to invest in their Alabama operations. We are now a true player in the industry and intend to continue to become an even bigger player in this influential global business.”

The evolution of EVs

In Alabama, the industry is making big moves to take advantage of the evolution to EVs.

It started with Mercedes, and Mercedes is leading Alabama into the future again. $1 billion investment to start EV productionThe project will upgrade what the company already calls one of the world's “smartest” manufacturing facilities.

In August 2022, just months after opening a sprawling battery assembly plant in Alabama, the German automaker Start of production The company's Tuscaloosa County plant makes the EQS premium sports utility vehicle. Another electric vehicle, the EQE sports utility vehicle, is also built there.

In another milestone, Hyundai's Alabama assembly plant is now producing its first EVs. The electrified Genesis GV70Â and the plug-in hybrid electric SUV Santa Fe. Hyundai has invested $300 million in its Montgomery plant in preparation for the start of production of those vehicles.

To advance future EV production plans, suppliers Hyundai MobisThe company is embarking on a project to open a $205 million EV battery module factory in Montgomery that will employ up to 400 people.

According to Alabama Department of Commerce Secretary Ellen McNair, the increased activity in the EV supply chain sends a signal that Alabama's auto sector is fully focused on tomorrow.

“Alabama's auto industry has long been a dynamic growth engine for our state's economy, and as the evolution of EVs continues to reshape automakers' strategies, I'm confident we're poised for the next chapter,” McNair said.

“Our country's automotive manufacturing sector is a considerable force and this new era for the industry is just beginning,” she said.

This story originally appeared on Alabama Department of Commerce Made in Alabama Website.