Published: Sat, January 13, 2018
Global News | By Stacy Ballard

Mazda Announce New $1.6 Billion Manufacturing Facility In Alabama, Creating 4000 Jobs

Mazda Announce New $1.6 Billion Manufacturing Facility In Alabama, Creating 4000 Jobs

Toyota CEO Akio Toyoda infers the automaker's 15-year presence in Huntsville, where it has operated a 700,000-unit annual capacity engine-manufacturing plant since 2003, played a large role in the automaker selecting the city for its new joint-venture vehicle-assembly plant with Mazda. According to Bloomberg, Toyota spokesman Curt McAllister said the automaker has no announcement to make at this time.

Home to a long list of auto manufacturers, the Yellowhammer State already holds the title of the fifth largest producer of cars and light trucks in the U.S. In 2016, Honda, Hyundai and Mercedes-Benz alone accounted for the production of more than 1 million vehicles in the state, according to a report by the Economic Development Partnership of Alabama.

Amid tightening environmental regulations in the USA, the likely challenge will be to create new added value, such as locally producing electric cars and replacing production models to better reflect demand. This is just one slice of the estimated $10 billion Toyota is planning to invest in US manufacturing over the coming decade. "Congratulations Alabama!" he wrote. Production is expected to begin by 2021, according to Toyota and Mazda.

To lure the plant, the state offered an incentive package of $379 million in tax abatements, investment rebates and the construction of a worker training facility. Officials said the state tax incentives were worth $370 million, but they did not disclose how much the local incentives were worth.

Alabama's established auto industry was the key factor for landing the new factory. It recorded a 2 percent decline in sales of new vehicles previous year, after reaching an all-time high in 2016.

That's the name for Alabama's newest automotive resident - Toyota-Mazda.

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Alabama was already tied with Tennessee as the fifth-largest producer of vehicles in the country a year ago, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan. Alabama is the fifth largest producer of passenger vehicles in the U.S. Automobile manufacturing now employs about 57,000 Americans in Alabama. The state has more than 150 major auto suppliers and 57,000 automotive manufacturing jobs.

Alabama was identified as one of 11 states early on where the plant might land.

In a news conference in Montgomery this afternoon, state officials announced the coming of a $1.6 billion joint venture between the two auto companies.

Alabama also is home to assembly plants operated by Honda Motor Co. and Hyundai Motor Co.

Toyota and Mazda are setting up shop n the Heart of Dixie. They announced a capital alliance in August and plan to jointly develop technology for electric vehicles. Volkswagen ultimately built its plant in Chattanooga.

The Japanese automakers have been narrowing the list of possible locations for months. The Huntsville area already has a Toyota engine factory that employs almost 1,500 people. It will be Toyota's eighth such facility in North America and the second for Mazda.

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With the investment, both automakers hope to prove their good United States corporate citizenship and appease the Trump administration's concerns about jobs moving overseas.

Tom Sisk said he was "ecstatic" when he heard the news, calling it "the biggest economic announcement in 25 years". Last year, the company announced a $106 million expansion there.

That doesn't just mean jobs working in a plant either.

USA states covet auto assembly plants because they typically pay above-average wages and spin off jobs at suppliers and service companies.

Most foreign automakers have at least some production capability in the U.S., most of which is dedicated to trucks and SUVs. "We will work together to be good citizens of this state".

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