M-Benz Begins $600 mil. U.S. Expansion

TUSCALOOSA, Ala.--Mercedes-Benz U.S. International Inc. (MBUSI) has broken ground on a $600 million expansion at its Tuscaloosa, Ala. M-Class sport utility plant. The company plans to double production for the M-Class, which is currently the top selling Mercedes-Benz vehicle in the United States.

The groundbreaking ceremony, which took place before a gathering of some 350 government and community leaders, as well as national and local media, included speeches by Helmut Petri, head of worldwide production for Mercedes-Benz; Alabama Gov. Don Siegelman; and Bill Taylor, MBUSI president and chief executive officer.

“This expansion will make Tuscaloosa the largest plant for Mercedes-Benz outside of Germany, and that makes Alabama an even more important part of the DaimlerChrysler family,” Petri said.

Petri dished out the news that the expansion will more than double the size of the existing 1.2-million-square foot facility, and will include an enlarged body shop and additional paint and assembly shops. Production capacity is expected to increase from 80,000 units a year to roughly 160,000. About 2,000 new jobs will be added to the 1,900 team members already employed at MBUSI.

Construction on the expansion will begin the middle of next year, with completion expected by the end of 2003. Clearing of the site will begin immediately.

Some 80,000 vehicles will be produced this year at the Tuscaloosa factory, with an additional 25,000 to be produced at a factory in Graz, Austria, to meet European demand. The M-Class is sold in 135 countries.

The M-Class “has been a tremendous success worldwide, with demand far exceeding original expectations,” he said. It has become the top selling Mercedes-Benz vehicle in the U.S. In October, M-Class retail sales in the U.S. were 6,046 units, representing a 43.5 percent sales increase over last October’s sales record. “This is not only the all-time best month ever for the M-Class, but it is also the all-time monthly sales record in the U.S. for any single Mercedes-Benz vehicle class.”

With this expansion, DaimlerChrysler, MBUSI's parent company, could become the fifth largest employer in Alabama, with more than 7,000 employees between its Chrysler electronics plant in Huntsville, Ala., and the Tuscaloosa Mercedes-Benz factory. The total capital investment made by DaimlerChrysler since 1994 in Alabama could be more than $1.3 billion, once the expansion is complete.

“Seven years ago, we made the decision to come to Alabama--and it was the right decision,” said Petri. “Now, with this $600 million expansion, we’ve made that decision for a second time.