MONTGOMERY, Ala. (AP) - Alabama, seeking the fast lane in its bid to become a major auto making hub in the South, has landed a coveted $1.6 billion joint venture plant by Japanese car giants Toyota and Mazda that will eventually employ 4,000 people.
The new plant is to be located in Huntsville, Alabama - already a hub for the region's budding aerospace industry - and will produce 300,000 vehicles per year, a combination of the Toyota Corolla compact car and a new small crossover SUV from Mazda. Production is targeted to begin by 2021.
"This is indeed a great day in Alabama," an upbeat Gov. Kay Ivey said Wednesday, flanked by company executives at a news conference in the state capital, Montgomery. Alabama offered an incentive package worth more than $379 million to lure the plant.
Toyota and Mazda will join Mercedes, Honda and Hyundai which currently operate assembly plants in Alabama.
"This project will really put Alabama at the center of the Southern automotive industry," Alabama Commerce Secretary Greg Canfield said. "We can't wait to see 'Made in Alabama' in those vehicles rolling down the assembly line."
Alabama was already tied with Tennessee as the fifth-largest producer of vehicles in the U.S. last year, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan. The state produced 9 percent of the cars made in the country, the center said.
Akio Toyoda, president of Toyota Motors, said Wednesday that the new facility is something of a homecoming since the company already has one plant in the state. The new Huntsville plant will be just 14 miles (22 kilometers) from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6 and V-8 engines for several Toyota models.
The decision to pick Alabama is another example of a long trend of foreign-based automakers building U.S. factories in the South. To entice manufacturers, Southern states have used a combination of lucrative incentive packages, low-cost labor and a pro-business labor environment since the United Auto Workers union is stronger in Northern states.
To lure the plant, Alabama offered an incentive package of $379 million in tax abatements, investment rebates and the construction of a worker training facility. The total price tag could top $400 million when road projects and local incentives are added.
Canfield, who said he had hopefully waited for the decision with a chilling bottle of champagne, said he believed the state is getting a "pretty good deal" considering the plant will create $5.2 billion over 20 years.
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