October 21, 2011

State of Alabama
Press Release: Alabama Department of Commerce

Mercedes To Produce Fifth Model, Add 400 Jobs In Alabama

By Patrick Rupinski
The Tuscaloosa News

VANCE - Mercedes-Benz will make a completely new model vehicle starting in early 2015 at its sprawling automotive assembly plant in Vance.

The German luxury automaker said Thursday afternoon that it will invest an additional $350 million in the Vance plant to prepare for the new vehicle's production, which will be the fifth model that will be made at the plant, known as Mercedes-Benz U.S. International.

About 400 new jobs will be added when the model's production begins, although hiring won't start for several years.

The new model, which has not been given a name, also is expected to bring several thousand more jobs to manufacturers in the automotive parts industry. Those automotive suppliers tend to locate near the automotive plants they serve.

Markus Schaefer, MBUSI's president and CEO, said that, as a general rule, for every job Mercedes adds at its production plant, its automotive suppliers will create seven more jobs. The new model thus could bring 2,500 to 2,800 supplier jobs to the state, he said. The automotive suppliers that win the Mercedes' contracts for the new model will likely spend more than $5 billion in new plants and equipment to serve MBUSI, he said.

Dara Longgrear, executive director of the Tuscaloosa County Industrial Development Authority, which recruits new industry to the county, said he thinks the Tuscaloosa area will get many of those automotive suppliers.

While production of the new model is several years off, Longgrear said he expects that some announcements by suppliers for the Mercedes C-Class sedan, which will begin production in Vance in 2014, could be made before the end of the year, with more C-Class suppliers announcing their plans in 2012. Suppliers for the new model will follow that.

Mercedes currently makes all of its M-Class and GL-Class sport utility vehicles and its R-Class crossover vehicles in Vance. The production of those vehicles will continue.

Schaefer said Mercedes will be investing about $2.4 billion from 2010 to 2014 at MBUSI to accommodate the C-Class and new model's production.

Schaefer refused to describe the new model, saying Mercedes was not ready to reveal those details.

“I can say it's a completely new design and new vehicle,” he said. “I am sure we are ahead of our competition with this new product.”

He predicted the new model will define the type of vehicle for the auto industry just like the M-Class defined the luxury SUV market when it was introduced in 1997.

Dieter Zetsche, chairman of Mercedes' parent company, Daimler AG, said in a statement released from Mercedes headquarters in Stuttgart, Germany, that “this new model from the Tuscaloosa plant is an important element of our growth strategy. It is one of the 10 additional models, which we will introduce within the next four years alone across all segments.”

Referring to the Tuscaloosa plant's role within the global production network of

Mercedes-Benz cars, Zetsche added: “At the same time, we are systematically broadening our manufacturing footprint in the NAFTA region.”

NAFTA is a free trade agreement covering the U.S., Canada and Mexico.

Gov. Robert Bentley, who attended the announcement, said Mercedes' success in Vance has made the state's job in recruiting new industries easier because it has shown the world the quality and capability of Alabama's workforce and the quality of their workmanship.

Bentley, Tuscaloosa Mayor Walt Maddox and Tuscaloosa County Probate Judge Hardy McCollum met with Mercedes officials in July in Stuttgart to discuss the expansion at MBUSI.

“Any additional employment at Mercedes will have a big impact on our community,” Mc-Collum said. “Without good jobs, no other development really can happen. Mercedes' commitment is extremely important to our community, our educational system and our quality of life.”

Maddox said Thursday's announcement was a major boost to Tuscaloosa's recovery from the April 27 tornado.

“It means we will have good jobs and a great community,” he said. “This is a great day for Tuscaloosa, the state of Alabama and Mercedes.”

Maddox said the continued growth of Mercedes and its supplier network assures a good future for generations to come.

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