By Greg Canfield, Secretary, Alabama Department of Commerce
In economic development, one indicator stands out. It’s simple: where are industry leaders investing their money in new facilities or expansions? In many cases, it’s Alabama.
Recent activity tells a powerful story. In recent months, corporate giants and innovative companies from around the world have selected Alabama as a strategic base in their unfolding growth plans. The roster of blue-chip companies making new investments is long, but here’s a short list: Honda, Walmart, Amazon, Boeing, Aerojet Rocketdyne, Blue Origin, and Toyota.
All of these industry leaders, and others, have picked Alabama after extensive site-selection searches.
The proof can be found in the numbers. Between 2011 and 2016, economic development activity brought $28.5 billion in new capital investment to the state. These projects, cutting across many industries, involve the creation of 107,000 new and future jobs.
Last year alone, the new capital investment totaled $4.2 billion, with 14,700 anticipated jobs for Alabama.
Activity was strong in key industry sectors for the state. Automotive: $900 million in new investment and 3,900 jobs. Aerospace: $260 million; 2,000 jobs. Forest products: $1.1 billion and 1,000 jobs.
We’re not taking our foot off the gas. This year is shaping up as another step forward in our comprehensive campaign to transform Alabama’s economy and better prepare it for a new era when all kinds of jobs share an increasing focus on technology.
We’re setting our goals at lofty levels.
Powering Space Flight
There may be no endeavor more high tech than space flight, and Alabama will play an important role in its future.
Earlier this year, Blue Origin – the company started by Amazon’s founder Jeff Bezos – announced plans to build its next-generation BE-4 rocket engines in Huntsville, the cradle of America’s rocket program. The reasons behind the company’s decision to pick Alabama are worth repeating.
Photo Caption: Governor Kay Ivey presents Blue Origin President, Robert Meyerson with the Seal of Alabama after the company announced plans in June 2017 to invest $200 million to build a rocket engine plant in Huntsville. (Image: Governor’s Office, Jamie Martin)
“Alabama is a great state for aerospace manufacturing, and we are proud to produce America’s next rocket engine right here in ‘Rocket City,’” said Robert Meyerson, president of Blue Origin. “The area’s skilled workforce and leading role in rocket propulsion development make Huntsville the ideal location for our state-of-the-art manufacturing facility.”
In addition, Aerojet Rocketdyne is creating 800 jobs in Huntsville as part of an expansion that will include the location of its Defense division headquarters along with a new state-of-the-art manufacturing facility for its AR1 rocket engine.
Meanwhile, the United Launch Alliance is preparing to make a major investment at its sprawling rocket assembly plant in nearby Decatur, where it currently produces large Atlas V and Delta IV rockets. ULA plans to assemble its next-generation Vulcan rockets at the Alabama facility.
And Alabama’s Marshall Space Flight Center remains deeply involved in the development of the Space Launch System (SLS), NASA’s most powerful rocket.
To sum it up, Alabama is at the heart of the propulsion system that’s powering our explorations of the final frontier.
Accelerating Growth
But don’t get the idea that these are the only positive developments going on in Alabama’s economy.
For one thing, Alabama’s auto industry is finding a new gear. The success that the major global automotive companies have found in Alabama has made the state a top destination for the industry. Mercedes-Benz, Honda, Hyundai and Toyota have expanded repeatedly in the state, and that has transmitted a strong signal across the industry that Alabama is a place where it can thrive.
Jason Hoff, president and CEO of Mercedes-Benz U.S. International, the automaker’s Alabama manufacturing operation, put it this way:
“These are exciting times for our Alabama facility as we prepare to take on this new challenge to build the next generation of SUVs,” he said. “Mercedes-Benz became the first auto manufacturing plant to build vehicles in Alabama more than 20 years ago and, since that time, other automakers and suppliers have joined us.”
“Our suppliers have found – just as we have – that Alabama is a great place to do business,” Hoff added.
We’re encouraged by the progress we see in Alabama’s economy, which today is registering some of its highest employment levels ever. That’s because trends point to the long-term success of Accelerate Alabama, the strategic growth plan that’s at the core of our efforts to modernize Alabama’s economy.
While overall investment in Alabama is growing, so is foreign direct investment (FDI). Last year, Alabama attracted FDI valued at $1.6 billion from 17 different countries, accounting for nearly 40 percent of the total new capital investment. These projects involve the creation of 3,250 new jobs.
The bottom line is that businesses from around the globe continue to find a welcoming home in Alabama. In the last four years alone, more than $7.4 billion in FDI has poured into Alabama, bringing more than 13,500 jobs.
These investments are critical because they have accelerated growth in key sectors such as automotive, aerospace, and forest products.
Another positive trend has been the growth of Alabama exports. In 2016, exports of Alabama-made products topped $20.5 billion, setting a new record. With motor vehicles leading the way, Alabama exports have surged 300 percent since 1996, the year before automobile manufacturing began in the state. Alabama exports have jumped nearly 50 percent in the past decade.
That’s important because export growth has boosted business growth and job creation in the state.
Meeting New Challenges
We worked hard to develop this solid foundation for growth in Alabama because there are tough challenges on the horizon. Across many industries, new technologies are disrupting business models. Automation, meanwhile, is transforming factory floors.
These changes mean workers must be equipped with a higher skill levels than ever before. In response, we have improved Alabama’s workforce development programs to more fully align with the needs of businesses.
As part of a major restructuring of those programs, the Alabama Department of Commerce has become the central location for the state’s primary, non-educational workforce services. AIDT, the state’s top-rated workforce development agency, remains a pillar in this effort.
At the same time, we’ve reorganized the state’s Regional Workforce Councils to make them more effective and better integrated with local businesses. We’ve also launched AlabamaWorks, a unified system to link employers and job seekers by creating a path from school to workplace.
New initiatives such as Apprenticeship Alabama will pay dividends. This industry-driven registered apprentice program offers “earn and learn” opportunities for workers while creating a talent pool for businesses.
Photo Caption: Airbus’s Alabama workers march at a customer delivery event at the company’s manufacturing facility in Mobile. A 2017 Gallup poll found that Alabama has the most engaged workforce in the nation. (Image: Governor’s Office, Jamie Martin)
These improvements benefit a workforce that’s already noted for its skill in turning out products such as passenger jets, automobiles, rockets and much more. In fact, a 2017 Gallup poll found that Alabama has the nation’s most engaged workforce.
For us, that fact is another key indicator that Alabama is well-positioned to attract significant new investment and jobs in the future.
Alabama – and its workforce – are ready to forge lasting partnerships with companies from around the world.
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