“One of the things I find most exciting about Mobile’s economy is that we not only consume things, we also make things, ” says Bill Sisson, president and CEO of the Mobile Area Chamber of Commerce.
The U.S. manufacturing sector continues in decline — according to the Bureau of Labor Statistics, the U.S. lost 29, 000 manufacturing jobs in March alone — but the business of making things is robust in Mobile, where figures from the Chamber of Commerce show a 33 percent increase in manufacturing jobs and an 18.5 percent hike in wages over the last five years.
That’s by design, Sisson says: Mobile’s strategic plan of economic development has a strong focus on appealing to manufacturers. “We have continued to recruit manufacturing companies, not exclusively, but we wanted to make sure we kept a strong manufacturing base, ” he says, adding that economically strong areas in the U.S. and abroad tend to have the same strategy.
“A lot of areas turned their backs on manufacturing, ” he notes.
Mobile is seeing continued success in the manufacturing sector because of increased productivity related to the city’s port and container terminal, the strength of its workforce development programs and growth in the aviation and aerospace industries, Sisson says.
Airbus just delivered its first American-built aircraft, an A321, to JetBlue on April 25 from the Airbus U.S. Manufacturing Facility in Mobile. The $600 million, 53-acre facility at Brookley, the European aerospace company’s first production site in the U.S., began assembling aircraft in July 2015 and is on track to reach its goal of delivering four aircraft per month by the end of 2017.
Airbus has 350 employees and an employment goal of 1, 000, which includes integral service suppliers, or direct and indirect manufacturing-related jobs, at full capacity. In recent months, the company has recruited numerous suppliers, including MAAS Aviation, which is based in Ireland.
And Mobile has “only started to scratch the surface” with success in the aviation industry, Sisson says. “We’ve seen that type of growth already in the cities of the world that assemble large aircraft, ” such as Hamburg and Toulouse, he notes. The Airbus U.S. Manufacturing Facility was closely modeled on the Hamburg facility, and that region has added 40, 000 jobs over a 20-year period, he says. “If we get even a fraction of that, you’re going to see a huge effect on the economy.”
The strongest manufacturing sectors in the Mobile region are shipbuilding and steelmaking. Australia-based shipbuilder Austal USA, the region’s biggest private employer, boasts more than 4, 000 workers.
“We’ve had a history of shipbuilding for 100 years, ” Sisson notes. “We are a port city and we’re continuing to excel in the shipbuilding arena. We have a strong workforce that has that history of being involved in manufacturing. They’ve trained in it, and their parents and grandparents worked in it, and that has been a strong suit as well.”
Austal has invested more than $400 million and operates more than a million square feet of manufacturing space along the Mobile River. In 2008, the U.S. Navy awarded Austal a $1.6 billion, 10-transport ship contract. Last year, the Navy awarded Austal a $53.4 million contract to purchase materials for an 11th transport ship.
Also, earlier in 2015, the Navy established an option for an 11th littoral combat ship, which would bring the number of Austal-built LCS vessels to 13. In December, the Navy issued Austal another $51.6 million for LCS upgrades and preliminary design to transition the LCS to a frigate.
The company has no immediate concerns about the possibility of cuts to the littoral combat ship program, according to a statement from Craig Savage, Austal USA’s director of communications and state/local affairs. “Austal has a current order book that has the company building ships into the next decade, ” the statement says. “We’ve received positive feedback from the U.S. Navy on our ships and will continue working with them to meet the current and future requirements of the Navy.”
In Calvert, about 35 miles north of Mobile, the AM/NS Calvert and Outokumpu Stainless USA steel processing plants have 1, 600 and 1, 000 employees, respectively. The AM/NS plant, built by ThyssenKrupp, is in the process of completing two major expansions in 2016: a $30 million investment to increase steel slab storage and an $88 million project to produce high-strength and highly formable steel to compete with aluminum in the automotive industry. The investments total $118 million.
Steel processing is successful in southwest Alabama because of a number of geographical and cultural strengths, says Scott Posey, director of communications at AM/NS Calvert. Those assets include proximity to the automotive and energy pipe markets; lower energy costs; access to the port, railways and two major interstates, and the availability of a trainable workforce, he says.
David Scheid, vice president of human resources at Outokumpu Stainless, also cites the region’s workers as a major asset. “The workforce has been phenomenal, ” he says. “There is a shortage of skilled labor, but through workforce development programs, those available can be easily trained. They’re dedicated; they have a dedication to what we’re trying to accomplish.”
Another boost for regional workforce development is the Investing in Manufacturing Communities Partnership, announced by the U.S. Department of Commerce in 2014. The eight-county southwest Alabama region was among the first 12 designated manufacturing communities selected.
The main reason that the Mobile region was tapped for the Manufacturing Communities designation was because of the strength of the shipbuilding sector, Sisson says.
The federal designation led to the Southwest Alabama Workforce Development Council’s $150, 000 grant from the Delta Regional Authority to conduct a skills gap analysis in the region’s rural counties, according to Laura Davis Chandler, SAWDC executive director.
“As we continue to advance regional efforts to better meet industry needs, we hope to leverage the designation in the future for apprenticeship programs and the recently announced Advanced Manufacturing Training Facility at Brookley, ” she says.
The Mobile County Public School System’s Signature Academies programs have also contributed toward workforce development. The career academies, now offered in all 12 Mobile County high schools, include partnerships with businesses and industries to provide classroom instruction and internships.
Outokumpu has hired several graduates from nearby Citronelle High School who trained in the school’s Advanced Manufacturing, Industry and Technology courses, designed with input from the company. “The signature academy at Citronelle High School is a great program, ” Scheid says. “We decided as a business that we could step up and help develop that future workforce.”
The school system is in its fourth year with the Signature Academies program, which helps students focus on their skills and gives them more hands-on opportunities to explore different careers in the Mobile region, says Larry Mouton, the school system’s executive director of career and technical education. The program is particularly effective at matching students with careers of interest, he says, and the school system plans to bring more industries on board as partners next year.
A better-trained workforce is one of the factors leading to a “very robust” 18 percent growth in wages in the manufacturing industry over the past five years, Sisson says. And as more high-skilled, high-paying positions are created, the Mobile region should expect wages to continue to rise, he adds.
“I think people sense that we’re in a growth sector, ” he says.
Sally Pearsall Ericson and Matthew Coughlin are freelance contributors to Business Alabama. She is based in Mobile and he in Pensacola.
Text by SALLY pearsall ERICSON • Photo by MATThew COUGHLIN