Steel Heart of Dixie

Alabama’s Economic Incentives lead to one of the largest developments in state history—a German steel manufacturer’s $3.7 billion plant.

By Pearl Gabel

ALABAMA
FAST FACTS

Population (2006): 4,559,030

Largest Cities (2005):
Birmingham, 231,483;
Montgomery, 200,127;
Mobile, 191,544;
Huntsville, 166,313;
Tuscaloosa, 81,358

Targeted Industries: Automotive, aviation/aerospace, biotechnology/life sciences, plastics, industrial machinery, technology products

Key Incentives: Alabama’s Capital Investment Tax Credit, Site Preparation Grant Program, Employer Education Credit, Industrial Revenue Bonds (IRB), Alabama Enterprise Zone Credit

A labama’s business climate has attracted one of the largest industrial development projects this year: ThyssenKrupp, which is based in Germany, announced this May that it will invest $3.7 billion into building its newest processing plant in Mount Vernon, AL. The state lured the steel company using an incentive package of over $811 million—the largest in Alabama’s history. The package includes $461.1 million in direct financial aid, including land acquisition, workforce training, and road improvements, and over $350 million worth of tax abatements. The company will not have to pay any state income tax for the next 30 years unless its tax liability exceeds $185 million in any year.

Mount Vernon is a town of about 800 people situated 30 miles from Mobile. The company plans to hire 2,700 employees directly and generate over 29,000 jobs during the initial construction phase, which begins in 2008. Over a 20-year period, the facility is also expected to yield tens of thousands of indirect jobs.

Alabama is Ready to Work Alabama is Ready to Work (source: Alabama Industrial Development Training)

The company’s search for a U.S. location began in February 2006, with 67 potential sites in 20 states. The decision to select Alabama was based on operating costs and site-specific capital expenditures.

The new facility will process carbon and stainless steel for manufacturers throughout North America, including automotive, utility, and construction materials, as well as appliances, electrical, and precision machinery.