Mercedes-Benz Spending $1 Billion to Build All-electric SUVs in, Where Else, Alabama

by Timothy Cain

Published: September 22nd, 2017

mercedes benz spending 1 billion to build all electric suvs in where else alabama

Mercedes-Benz is investing $1 billion into its Tuscaloosa, Alabama, assembly operations in order to facilitate the production of its first EQ-branded SUVs in 2020. The investment, timed to roughly coincide with the beginning of Mercedes-Benz ML production in Alabama, is expected to result in the hiring of another 600 employees.

In the near term, Mercedes-Benz has been open with its doubts regarding the profitability of pure electric vehicles. Evidently, the long-term view is different. And it probably doesn’t hurt to pour more money into a U.S. operations hub that accounts for nearly half the vehicles sold by the automaker in America.

Alabamians already build the GLE-Class (formerly the M-Class), GLS-Class (formerly the GL-Class), and the U.S.-market C-Class sedan for Mercedes-Benz. Those three vehicle lines — four if you count the separate GLE-Class Coupe — accounted for 49 percent of Mercedes-Benz USA car/SUV sales in 2017’s first eight months.

Who’d have thunk, 22 years ago when Mercedes-Benz announced Alabama would be home to the automaker’s first major non-German plant, that we would reach a point where Americans would be responsible for assembling most of the Mercedes-Benzes Americans buy?

Through the first eight months of 2017, Automotive News reports that Mercedes-Benz has built 53,024 copies of the C-Class (down 16 percent, year-over-year) but 147,068 SUVs, an 11-percent increase.

Alabama is also home to production of the four American Honda products, production of which is down slightly to 239,534 units year-to-date, AN says. Alabama also hosts production of the Hyundai Elantra, Sonata, and the Santa Fe Sport. Hyundai’s total Alabama production is down 6 percent, all on the account of the brand’s decreasingly popular sedans.

Back at Mercedes-Benz, the German automaker will spend some of this new $1 billion investment on the company’s fifth battery plant and an after-sales-oriented logistics hub. Mercedes-Benz was already reinvesting in its Alabama operations in order to update the body shop and assembly line for current production. Naturally, the package used to entice further Mercedes-Benz investment in Alabama will include statutory incentives, performance-based incentives, tax abatements, and tax credits, according to Alabama Commerce Secretary Greg Canfield.

Mercedes-Benz first unveiled the EQ idea with the Generation EQ Concept at 2016’s Paris auto show. The production version is expected to offer around 300 miles of all-electric range.

[Images: Daimler AG]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars and Instagram.

#Alabama #EQ #FutureVehicles #Mercedes-Benz #Mercedes-BenzEQ #Mercedes-BenzUSA #Tuscaloosa

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9 of 19 comments

I_like_stuff on Sep 22, 2017

I like my steak medium rare. I like my coffee black with no sugar. And I like my German cars made in Germany, damn it!

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- Sceptic on Sep 23, 2017
  
  How do you feel about the Greater Reich assembled cars? Austrian and Hungarian built Mercedes have been outstanding in my experience.
  
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Ash78 on Sep 22, 2017

As an Alabamian, there is an unspoken sense of pride that comes with with this, but after a few years it just faded into the background and became an entitlement. Because OF COURSE these cars are built here (and don't forget that Mercedes also exports a substantial minority of what they build here). These plants are mostly located in semi-rural areas outside of larger metro areas, so a lot of workers are predictably relatively uneducated, but very skilled (either in auto or in other trades, from machinists to poultry workers to textiles to cabinetry). The auto wages are a little better than other employers, but your average old-line union worker would balk at it...at least until they saw how much house you could buy in Tuscaloosa county with $200k. And $500/year in property taxes. It's all relative. The attitude here is sort of the opposite of what I saw from my Midwestern friends who cheered on the worst 80s/90s products from GM and Ford simply because they're "local" or "UAW made." I wonder how we'd feel if our state produced crap, as well. Are we fairweather fans or die-hards? Actually, I'm not super proud of the Santa Fe. Just saying.

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- I_like_stuff on Sep 22, 2017
  
  "These plants are mostly located in semi-rural areas outside of larger metro areas, so a lot of workers are predictably relatively uneducated," As opposed to all the PhDs working the UAW lines in urban Michigan??
  
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- Ash78 on Sep 22, 2017
  
  @I_like_stuff The rest of the context there was that Michigan workers are often experience 3rd- or 4th generation auto workers, which is less risky than hiring a high school dropout from Bob's Welding Supply. Greenfield plants are a gamble, but somebody has to help build the skill base. Now, 20 years later, you've got people who have that built-in relevant experience.
  
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- Daniel J on Sep 22, 2017
  
  Also as a fellow Alabamian, there has been more backlash recently in regards to plant conditions. There are many who'd rather see them go because of the supposed working conditions. I don't know. I've never been inside the plants. I do know that there was a death not that long ago down in Clanton. The question is are the employees trained enough. We have Toyota here, and the only complaint I've heard is that more than half of the employees are hired through agencies, and they receive no benefits and less wages.
  
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- Mandalorian on Sep 22, 2017
  
  @Daniel J From what I've heard through colleagues is the automaker plants themselves have good working conditions, but the suppliers are an entirely different story.
  
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- Whatnext on Sep 23, 2017
  
  @Daniel J Of course the irony is that a lot of Alabamians voted for Trump and against those evil job-stealing Mexicans. I guess it's ok for Americans to take employment away from other Americans through crap wages and working conditions, but not for Mexicans to do it.
  
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- Civicjohn on Sep 24, 2017
  
  @Whatnext Yes, the irony appears that you are no fan of the South and voted for Mrs. Clinton. Please bring along some facts and figures about the “crap wages and working conditions”.
  
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