July 29, 2011

State of Alabama
Press Release: Alabama Department of Commerce

Gov. Robert Bentley Visits North Alabama Automotive Plants

by Jason Bacaj - The Anniston Star

Alabama Gov. Robert Bentley, left, tours the Honda plant in Lincoln on Thursday with Chuck Ernst. (Photo by Bob Crisp, Consolidated News Service)
LINCOLN — Gov. Robert Bentley took a whirlwind tour of Lincoln’s Honda manufacturing plant Thursday morning in the first of a two-part tour of northeast Alabama automobile manufacturers — an industry that may hold key pieces of Alabama’s economic recovery.

He watched a few Odysseys roll down the line and sent the plant’s first-shift workers off to lunch with a smile and a handshake. The visit to the Lincoln plant and Huntsville’s Toyota plant are part of the administration’s reiterating its commitment to job creation and growth in Alabama, said Jennifer Ardis, the governor’s press secretary.

“We’re going to continue to work hard to create jobs in Alabama because that’s what we said we were going to do,” Bentley said after the tour.

Unemployment increased statewide in June to 9.9 percent, up from 9.6 percent the month before. It is also higher than the state’s 9.3 percent unemployment rate in June 2010.

Bentley said the unemployment rate represents a “snapshot” of the economy and noted that Alabama’s figures rank among the lowest in the Southeast.

About 37,000 jobs have been added during the first six months of 2011, said Ahmad Ijaz, director of economic forecasting at the University of Alabama. They were added among an array of industries, including leisure and hospitality, manufacturing, steel production and fabricated metals, he said.

While that signals a hint of economic recovery, it is a recovery that is proceeding slowly, hindered by changes to the national economy, Ijaz said. Roughly 11 percent of people work in manufacturing jobs nationwide and, after layoffs, employers can find ways through technology to maintain a steady level of production with fewer workers, he said.

“There’s no guarantee to getting your job back,” Ijaz said. “And that’s not just in Alabama.

Employment dropped from almost 2.1 million people before the economy fell in 2007 to around 1.8 million people working now, Ijaz said. It might take two to three years for the state to reach pre-recession employment levels, he predicted.

A stretch of more prosperous times will be needed for programs at the state level that create jobs before those programs gain potency, Keivan Deravi, economics professor at Auburn University Montgomery, wrote in an email.

The Honda plant is expected to begin running at full capacity in August, said Mike Oatridge, vice president of operations at the Japan-based company’s Lincoln office. It operated most of the summer at about 50 percent capacity after a devastating earthquake and tsunami struck Japan in March. None of the plant’s 4,000 workers were laid off during the summer.

Much of July at the plant was spent operating between 60 and 70 percent capacity, Oatridge said. It allowed them to pay employees who volunteered to help the recovery effort after the April 27 storms ravaged Alabama, as well as provide additional training for employees, he said. As a result of the demand, the retraining and slow ramp-up to full production, Oatridge said the Lincoln plant plans to increase production to 680 vehicles each day, up from 650.

An increase in production at a major automotive manufacturer is a good sign for Alabama, Ijaz said. Plants such as Honda’s operation in Lincoln employ nearly 2.5 percent of workers in the state, produce almost 5 percent of Alabama’s gross domestic product and account for about 34 percent of the state’s exports, he said.

“They’re the ones who are adding jobs,” Ijaz said. “All over, automobile production is a very fast-growing business these days.”

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