Mercedes in Alabama: A $1.3 Billion Industry and 10,000 Jobs
25 May 1999
Mercedes in Alabama: A $1.3 Billion Industry and 10,000 Jobs
NASHVILLE, Tenn.--May 25, 1999--Mercedes-Benz U.S. International is a $1.3 billion industry in Alabama that is responsible for an estimated 10,000 jobs, according to an economic impact study conducted by Dr. Keivan Deravi at the Center for Government and Public Affairs at Auburn University at Montgomery.The Economic Development Partnership of Alabama, which commissioned the study, presented a summary of the results today in Nashville at the Automotive News New American Manufacturing Conference.
"We were fully aware of the phenomenal impact Mercedes has had on Alabama's reputation as a place to operate a business, but this is the first time we have quantified what the project has meant to the state's economy," said Neal Wade, EDPA president and chief executive officer. "This study demonstrates why an automotive manufacturer is considered the crown jewel in economic development - the impact is staggering."
Mercedes has been responsible for creating 3,693 project specific jobs - 1,800 at the Mercedes plant in Tuscaloosa, 300 announced jobs at a new parts consolidation facility in Bessemer and 1,616 jobs at tier-one suppliers that have located in the state as a direct result of the project. The study estimates that 6,080 indirect jobs have been created, for a total of 9,773 direct and indirect jobs.
The $1.3 billion represents Mercedes' annual expenditures in Alabama ($1.1 billion), plus the value-added at the Tuscaloosa facility ($244 million).
Other economic impact information in the study includes:
| -- | The total annual earnings for jobs created as a result of Mercedes is $354 million. |
| -- | The annual production impact (economic impact of the value-added at Mercedes and its Alabama-based tier-one suppliers) is $803 million. |
| -- | $112 million in annual retail sales and other business activity is generated in the state as a result of the Mercedes project. |
| -- | Mercedes and suppliers contribute $9.5 million annually through employees' individual income taxes and $4.5 million in sales taxes. |
| -- | Mercedes contributes $1 million annually in education property and sales taxes in Tuscaloosa County. |
| -- | The combined capital investment of Mercedes and its Alabama-based tier-one suppliers is $679.5 million. |
Mercedes-Benz announced in 1993 that it would invest $300 million to build a manufacturing facility in Alabama - its first passenger vehicle plant in North America. The company had planned to employ up to 1,500 by the end of the decade, but has already exceeded that goal by more than 300. Mercedes completed construction of the plant in 1996 and began production of the M-Class sport utility vehicle in early 1997.
To meet overwhelming worldwide demand, MBUSI has invested an additional $80 million in plant expansions in order to increase production by 20 percent annually from 65,000 vehicles to 80,000 in 1999.
EDPA, a private, non-profit organization, gathered and provided research and data used to conduct the study.