Diversity Is Key Factor in Alabama’s Thriving Development

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Mali R. Schantz-Feld (Apr/May 08)

In 2007, Alabama doubled investments by new industry in the state to $6 billion. “It has been an historic year in economic development,” says Neal Wade, director of the Alabama Development Office (ADO). “The key is diversity. We continue to build momentum in established areas.”

The automotive industry is the economic engine behind many new projects. “Last year, 738,832 new vehicles were produced in this state; 10 years ago, no vehicles were produced here,” says Wade. Automotive industry employment rose 8 percent last year and generated payroll of $5.2 billion in 2007, according to the Alabama Automotive Manufacturers Association. Next year, Honda plans to begin production of the Ridgeline pickup at the Lincoln assembly plant, which already builds the Odyssey minivan and the Pilot sport utility vehicle.

Kia’s new $1 billion assembly plant in nearby West Point, Georgia, has spurred many expansions and new facilities in Alabama. Wade notes that 3,700 jobs have been created as a result of the Kia project. In 2007, six expansions and six new projects were initiated to provide parts for the plant. Besides supplying Kia, some of those companies will also serve a new Hyundai engine factory in Montgomery that also will supply Kia’s plant.

More than 300 aerospace companies operate in Alabama today, focusing on space and defense; aviation; and maintenance, refurbishment, and overhaul. Major entities in this sector include the Marshall Space Flight Center, Boeing, and Lockheed Martin. A recent aviation development is expected to help the economy in the state’s southwest region take off: Northrop Grumman Corp. and EADS won a $40 billion U.S. Air Force contract for new aerial refueling tankers. The contract is reportedly the largest single Air Force procurement in history. Approximately 1,500 jobs are anticipated.

Birmingham and Huntsville are becoming life sciences and biosciences clusters. The University of Alabama at Birmingham is presently doing more than $450 million in externally funded research annually, mostly in the biosciences. The 270,000-square-foot Hudson Alpha Institute in Huntsville is expected to support more than 900 scientists in biotech and pharmaceutical research.

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