The automotive manufacturing industry in Alabama consists of automobile and light-duty motor vehicle manufacturing, light truck and utility vehicle manufacturing, motor vehicle body and trailer manufacturing, and motor vehicle parts manufacturing. Alabama is home to three major automobile producers: Mercedes-Benz U.S. International (MBUSI), Honda Manufacturing of Alabama (HMA), and Hyundai Motor Manufacturing Alabama (HMMA). The state is also home to two major engine producers, International Diesel of Alabama and Toyota Motor Manufacturing, Alabama, Inc. Approximately 90 automotive suppliers also do business in the state. In addition to the three original equipment manufacturers (OEMs), other major auto-related plants also have a strong presence in the state. Some of these include Siemens Electronics, Michelin, and Eaton Corporation.
The automobile industry has a very significant effect on the Alabama economy of 2006, real output (the total value of goods and services) produced by the state's automotive industry totaled $4.6 billion. This amount accounted for 3.4 percent of Alabama gross domestic product (ALGDP, or the value of all goods and services produced in the state) and 17.5 percent of the manufacturing sector's contribution to ALGDP. In 2007, 285 automotive-related plants employed 47,457 workers. These jobs supported another 85,700 jobs indirectly through their purchases and expenditures. The 134,226 direct and indirect jobs resulted in a total payroll of $5.2 billion.
Automotive manufacturing in the state employs relatively high skilled workers and pays above-average wages. Because of high productivity, wages paid in the automotive industries are almost twice as much as average Alabama wages and approximately 1.7 times those paid in other manufacturing industries.
Automotive manufacturing is also the largest exporter in the state, and the value of transportation equipment exports have increased from $1.6 billion in 2000 to $5.7 billion in 2008 and now account for 35.7 percent of total Alabama exports.
Currently, Alabama's production capacity is about 760,000 vehicles annually, counting all three OEMs, a significant increase from 1997, when the first automobile manufactured in the state rolled off the MBUSI assembly plant. In 2006, combined engine production capacity of Honda, Hyundai, Toyota, and International Diesel totaled 1.2 million units. In 1998, the first full year of production for Mercedes, 68,800 units were produced. The state's automakers produced 739,019 cars and light trucks in 2007, an increase of 975 percent, with production exceeding capacity for HMA and MBUSI. The 2007 production level ranked Alabama fifth among auto producing states in the United States, behind Michigan, Ohio, Kentucky, and Missouri.
MBUSI, located in Vance, Tuscaloosa County, employed more than 4,000 workers in 2007 with a capital investment of more than $1 billion. The plant, which consists of one body shop, two paint shops, and two assembly areas, exceeds three million square feet and can produce as many as 160,000 vehicles each year. Three models are produced at the plant: the M-Class SUV, the R-Class Grand Sports Tourer, and the GL-Class luxury SUV. The firm also has 35 automotive related suppliers in the state. It is also the state's largest exporter, with exports totaling $1 billion a year.
HMA, located in Lincoln, Talladega County, has a capital investment exceeding $1.3 billion and employed approximately 4,500 workers in 2007. The plant size is 3.25 million square feet and has the capacity to produce 300,000 vehicles and engines annually. HMA currently produces the Odyssey minivan, Pilot SUV, and Ridgeline truck, as well as V6 engines and is scheduled to add the V6 Accord to its line-up in 2009.
HMA and its Tier-I suppliers in the state employed 4,636 Alabama workers with a $252.4 million payroll for an average of $54,443 per employee. This average pay was 57 percent higher, about $20,000 more, than the $34,597 in average earnings for all Alabama workers. HMA also spent more than $1.6 billion in nonpayroll expenditures in Alabama. Approximately 86 percent of the company's payroll in Alabama was paid to workers living in Calhoun, Etowah, Jefferson, St. Clair, and Talladega counties.
HMMA, located just south of Montgomery, has capital investment in the state exceeding $1 billion and employed 2,500 workers in 2007. The plant size is 2 million square feet and has the capacity to produce 300,000 engines and vehicles annually. HMMA has 34 suppliers in the state and produces the Sonata sedan and Santa Fe SUV as well as V6 engines.
In addition to automotive assembly operations, International Diesel of Alabama, located in Huntsville, produces V6 and V8 diesel engines. Toyota Motor Manufacturing, Alabama, Inc., also located in Huntsville, went into production in 2001 and manufactures V8 engines for its full-size Tundra Trucks and V6 Tacoma and Tundra engines.
In 2007, 285 automotive-related plants in Alabama spread across 40 of the state's 67 counties. The largest number of plants was located in Jefferson County, 28, followed by Lee (24), Madison (24), Tuscaloosa (22), Montgomery (21), Etowah (16), Morgan (12), Talladega (12), Calhoun (11), Cullman (11), and Limestone (11). OEM plants and their suppliers directly employed approximately 48,500 Alabama workers in 2007. The Alabama counties with the largest automotive employment included Tuscaloosa (7,915), Talladega (6,318), Montgomery (5,513), Madison (4,945), Lee (3,289), Jefferson (2,492), Etowah (2,219), Limestone (1,849), Calhoun (1,490), and Cullman (1,392). Combined automotive industry payroll employment in these 10 counties was 37,422 and accounted for about 77 percent of total industry jobs in the state in 2007.
The national economic recession that began in December 2007 caused Alabama auto production to drop to about 670,000 vehicles in 2008.
Samuel N. Addy
University of Alabama
University of Alabama
Published December 6, 2009
Last updated November 7, 2013