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Toyota Mazda chooses Alabama for $1.6 billion factory
Eli Dile   on Friday, January 12, 2018 at 12:00:00 am

By Tim Grey, IEDC intern, University of Sydney

After fierce competition from an 11-state shortlist, Huntsville, Alabama, was selected for Toyota and Mazda’s $1.6 billion plant. Set to open in 2021, the facility is projected to employ approximately 4,000 and produce 300,000 vehicles each year (Bloomberg).

Though rival states offered generous incentive packages, Alabama’s robust manufacturing infrastructure and automotive ecosystem gave the state a distinct advantage. With 150 automotive suppliers and a Toyota engine plant just 14 miles from the new site, the deal demonstrates the power of mature production networks to attract new investment (especially considering the $370 million in tax credits, abatements, and training Alabama granted is far less than runner-up North Carolina’s $1.5 billion offer). Labor market conditions also favored Alabama; the 50,000 automotive jobs already in the Huntsville area ensure a well-prepared workforce.

Alabama is projected to become the country’s second-largest automotive manufacturer once production begins. Though Michigan remains the leader, Detroit’s dominance is fading as production is offshored or moves to southern states. At 2,500 acres, the site is twice as large as the company’s initial target, hinting at a potential future expansion.

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