Alabama’s auto industry has shifted into a strong growth phase since the global economic meltdown five years ago, with vehicle production doubling, billions in new investment pouring into the state, and auto-related jobs climbing to record levels.
The economic crisis that began in 2008 took a toll on Alabama’s auto manufacturing sector, as it did on the industry around the world. Vehicle production in Alabama fell 30 percent in 2009 alone, while the number of industry jobs, particularly at parts makers, dropped. Across the nation, production was cut in half during the downturn.
When the recovery began in 2010, however, Alabama’s auto industry came roaring back. Here’s what that recovery looks like:
- Mercedes-Benz, Honda and Hyundai combined to produce at least 1,033,095 vehicles in 2015, a 120 percent increase from the 467,817 vehicles they produced in Alabama in 2009. Mercedes’ assembly plant in Vance has seen the strongest surge, with output climbing 231 percent over the five-year period to reach record levels.
- Auto-industry jobs have risen sharply in Alabama since the Great Recession. In 2009, Alabama’s three assembly plants, Toyota’s engine plant in Huntsville and a handful of other facilities classified as auto manufacturing plants employed 10,600 people; today, the figure is 12,800 – and rising. Over the same time frame, employment at auto parts manufacturers across Alabama has nearly doubled, from 13,000 in late 2009 to 25,900 in November 2015.
- New investment in the sector has accelerated since the downturn, led by Mercedes. In 2011, the German automaker began work on a $2.4 billion expansion for its Alabama manufacturing facility, followed by another $1.3 billion expansion announced in September 2015. Honda has invested $510 million its Lincoln assembly plant in the past three years, while Toyota expanded engine production in Huntsville with two recent projects valued at $230 million. Hyundai also continues to invest in its Montgomery assembly plant announcing a $52 million investment to begin production of the Santa Fe Sport SUV.
All together, around $7 billion was invested in Alabama’s auto cluster between 2009 and 2015, according to data from the Center for Automotive Research in Ann Arbor, Michigan, and the Alabama Department of Commerce. During 2015, auto-related investments surpassing $2 billion have been announced in Alabama, though the actual investment may be spread over years.
“One part of the credit for the turnaround goes to our workforce and part of the credit should go to the management of these companies,” said Sam Addy, director of the Center for Business and Economic Research at the University of Alabama. “Honda, for instance, didn’t lay off a single person. That was a good long-term decision, and they are reaping the benefits of that now.”