Research: The Foundation for Economic Expansion

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Driving South

The International Automobile Industry Finds a Home in Alabama

Photo of an automobile tire in motionPage 1

by Bill Gerdes and Janice M. Fink

"The spark that caused the automobile manufacturing fire in this state was struck at The University of Alabama," says Dr. Malcolm Portera, chancellor of The University of Alabama System.

That fire shows no signs of diminishing. The University of Alabama, with its teaching, research and service mission, has been an integral part of the automobile manufacturing expansion into the Heart of Dixie, supplying engineering, management and manufacturing expertise, as well as an educated labor force.

During the past two decades, the nation's automotive manufacturing industry has steadily spread southward, from the Great Lakes, across the prairies of Indiana and Illinois, through western Kentucky, over the Nashville hills, and into Alabama, where it has found fertile ground.

The Southern Automotive Corridor, as it is now called, generally follows Interstates 65 and 75. Automakers from around the world are considering expansions or new operations in the Southeast, which accounted for 23.1 percent of all U.S. vehicle production in 1998, a percentage that is climbing almost too fast to track.

The first automaker to settle in Alabama was Mercedes-Benz, in 1993. Mercedes is now adding a $600 million expansion to its Vance operation. Then came Honda in Lincoln in 2000, followed by Hyundai in Montgomery earlier this year. Sandwiched in between was the Toyota V-8 engine plant in Huntsville, and as many as 130 automotive suppliers statewide. Estimates put the capital investment statewide by the automotive industry at more than $10 billion and climbing.

Next page — The Business College Paves the Way

Research in the Service of Teaching — Volume IV, Issue I