Greg Idehen
Whatever Governor Folsom and his boys put in their mouth before talking to the Germans, or whether it was the babalawoos deep down in the creeks of Tuscaloosa, it worked. Alabama beat the other 33 states to get the $1 billion assembly plant to be built in Vance. The factory would eventually open in 1996 as Mercedes first ever modern vehicle assembly plant outside Germany. Mercedes already had Truck and Bus assembly plants in the U.S., Brazil, South Africa and even in Enugu, Nigeria.
The Mercedes plant would directly and indirectly employ over 3, ooo people in Alabama State. Over 40,000 people applied for the first 650 job openings in March, 1996. These jobs would pay an average of $2800 (N476, 000) per month.
Setting up an assembly plant in America to build SUVs in the mid 1990s was a monumental step for Mercedes that before then prided itself in the Made in Germany cachet. Fifty percent of Mercedes customers were in the U.S. But as a result of currency swings, and high labour cost in Germany, Mercedes had a 30% cost disadvantage to the Japanese and U.S. car manufacturers. Mercedes had seen its share of the luxury car market slip for four year in a row.
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Building a 65,000 annual capacity assembly plant for SUVs in America was no small job. Mercedes in the usual German efficient manner set to work searching for suitable sites in 34 states. They set up a team headed by a thirty five year old executive, Andreas Renschler who had only worked for Mercedes for four years. He in turn assembled a team of about 25 youthful product planners, engineers and marketers. They in turn hired consultants from the international construction company, Flour Daniel Inc., to help with the search of a suitable site in the United States. The team considered over 100 sites in 34 states, taking into consideration such factors as closeness to major highway, availability of labour, education and shipping fees. Mercedes plan from day one was to manufacture all its SUVs in America and export fifty percent back to Europe, Asia, Africa and the rest of the world. The Mercedes ML 320, ML350, GL 350 and GL500 sold in Nigeria are all built in the United States.
They held meetings with the Governors of many U.S. states. States offered from $75 million to $300 million in financial assistance. Many states offered free land or money to purchase land and tax incentives. To avoid a circus atmosphere, Renschler and his team tried to keep their visits and deliberations secret. Team members traveled under assumed names- a ploy that meant Mercedes Managing Director Dieter Zetsche’s secretary couldn’t even get through to him at the Omni Hotel in Charleston, S.C.
On September 13th, 1993, the 12-member site selection team met from 8am to 2pm at the Mercedes headquarters in Germany to discuss the merits of the three finalist- North Carolina, South Carolina and Alabama. Incidentally, Alabama’s Commissioner for Economic Development, Billy Joe Camp and some more government officials landed Stuttgart that morning for some more lobbying, only to be told later that afternoon they had won. Managing Director, Zetsche said we sensed a much higher dedication to our project from the Alabama government team.
The prestige of the Mercedes plant opened the doors for a long line of automobile companies to locate in Alabama. Toyota, Hyundai and Honda opened assembly plants in the state. Alabama automotive industry continues to grow. Direct jobs have increased to 48,457 (+8%) up from 44,834 in 2005. The number of plants increased to 285 up from 263 in 2005. Since the first AAMA study was conducted in 2001, Alabama’s auto industry has added 21,545 jobs; an 80 percent increase. Half of Tuscaloosa County’s workforce is now employed in one automobile company or the other. Governor Riley last year, while opening Stakiewicz International Corporation of Germany new plant in Vance, said he feels an extreme amount of pride when he travels around the world and sees Mercedes M-Class vehicles and other products made in Alabama.
Maybe when Governor Amaechi returns from Alabama, he will go to the Michelin headquarters and talk to them about reopening their closed factory in Port Harcourt. Peugeot Automobile Nigeria can’t find made in Nigeria tyres for their assembly plant in Kaduna.
One week in Alabama, visiting these assembly plants and component manufacturers is worth more than one year at Harvard University. Governor Jim Folsom brought Mercedes to Alabama, now there are 285 automobile companies in a state that had no car company in 1993. This is practical governance you can’t be taught at Harvard or Oxford University or Unilag.
When Governor Fashola returns from his weekend playing golf with Governor Bob Riley and the Managing Director of Mercedes he will go beg Dunlop to keep their 4 year old, N2 billion factory from closing down permanently. The Managing Director of Dunlop Nigeria Plc, now DN Tyre and Rubber Plc, Mohammed Yinusa in an interview with the Guardian Newspaper said that they are still optimistic that a bail out may come from the federal government. Meanwhile, they have embarked on a massive importation of tyres from Apollo Tyres of South Africa.
