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February 2019

Career Notes, February 2019

Alan Alexander

Accounting

Anglin Reichmann Armstrong PC has promoted Luke Kinzer and Jason Miller to partner.

Jackson Thornton has hired Alan Alexander as its chief operating officer.

Aerospace

Carl Preston Jones has been appointed associate director, technical of NASA’s Marshall Space Flight Center.

Agriculture

Phillip Johns has been promoted to chief financial officer of the Alabama Farmers Federation.

Davis Dugger

Banking

Davis Dugger has joined River Bank & Trust as vice president and relationship manager for the Coastal Region.

Dennis Lee Bragg, owner of Bragg Farms, has been added to ServisFirst Bank Huntsville board of directors.

Construction

Davidson Homes, of Huntsville, has hired Greg Duriez as regional president and Lindsey Tapscott as director of marketing.

Cybersecurity

Frank Abagnale has been named the new company spokesperson with ThreatAdvice.

Economic Development

Alan Spencer, vice president for economic development and public policy for the Chamber of Commerce of West Alabama, has retired.

Ntam Baharanyi

Education

Charles Edward Sanders Jr. has been elected chair of the Alabama Commission on Higher Education.

Ntam Baharanyi, of Tuskegee University, has been named a fellow of the Carnegie African Diaspora Fellowship Program.

Joseph Kloepper, a professor of plant pathology in Auburn University‘s College of Agriculture, has been named a fellow of the National Academy of Inventors.

Arin Eddy has been named the women’s golf coach at Calhoun Community College.

Jasper attorney Ed Sanders was elected chairman of the Alabama Commission on Higher Education‘s coordinating board. Stan Pylant, president and general manager of WHNT-TV in Huntsville, was elected vice chair.

Seven Faulkner University Thomas B. Goode Jones School of Law alumni were voted into public office in Alabama. They are: Christy Edwards, Alabama Court of Civil Appeals; Tommy Bryan, Alabama Supreme Court; Tom Whatley, Will Barfoot and Greg Albritton, Alabama State Senate; Isaac Whorton, 5th Judicial Circuit; and Jim Zeigler, State Auditor.

Art historian Noa Turel, of the University of Alabama at Birmingham, has been named a 2019 member of the Institute for Advanced Study.

Engineering

Steve Cope, of Avion Solutions Inc., has retired. He served Avion for 13 years and held the position of director of marketing and public relations.

Ben Pitts

Fire Suppression

Ben Pitts has joined Amerex Corp. as vice president, sales.

Healthcare

Tim Puthoff has been named chief executive officer of Brookwood Baptist Medical Center and Tenet’s Alabama and Tennessee Group.

Girish Dhall, M.D., has been named division director for Hematology-Oncology and Blood Marrow Transplantation program at the University of Alabama at Birmingham Department of Pediatrics and Children’s of Alabama.

The University of Alabama at Birmingham has named Russell Taichman, DMD, DMSc, dean of the UAB School of Dentistry. Also Cheri Canon, M.D., the Witten-Stanley Endowed Chair of Radiology at UAB, has been named to the American Board of Radiology’s Board of Governors. Desiree Morgan, M.D., vice chair for Education in the Department of Radiology at UAB, has been appointed to the American Board of Radiology’s Board of Trustees.

Reese Dismukes

Insurance

Palomar Insurance has added Reese Dismukes as an account executive.

Legal

Sara Turner, of Baker Donelson, has been appointed to a one-year term as chair of the DRI Retail and Hospitality Committee.

Judd Harwood has joined the Public Affairs Research Council of Alabama board of directors and Jennifer Commander has joined PARCA’s Roundtable. Both are attorneys with Bradley Arant Boult Cummings LLP.

Alex Parish has joined Huie, Fernambucq & Stewart LLP as an associate attorney.

Reid Carpenter and Jeffrey Doss have been named partners at Lightfoot, Franklin & White LLC.

Leland Murphree, of Maynard Cooper & Gale PC, has been selected for ABI’s 40 Under 40.

Kathleen Miller, managing partner of Armbrecht Jackson LLP, has received the Alabama State Bar’s 2018 Susan Bevill Livingston Leadership Award.

Logistics

The Alabama State Port Authority has promoted Linda Paaymans to chief financial officer, Danny Barnett to vice president of human resources, Bill Inge to vice president, general cargo and central services, and Parrish Lawler to director of trade and development.

Christopher Austin has been named general manager, Port of Mobile Operations for MTC Logistics.

Caroline Chapman

Meeting Planners

Caroline Chapman has been promoted to senior meeting planner of Destinations, Alfa’s in-house travel and event management company.

Military

Engineman 1st Class Carlo Flaccavento, of Pinson, has been selected as Navy Recruiting Command 2018 Sailor of the Year. In addition, Command Master Chief Eric Mays, of Birmingham, has retired from the U.S. Navy after 30 years of service.

Organizations

Phillip Johns has been promoted to chief financial officer of the Alabama Farmers Federation.

Al Head, executive director of the Alabama State Council on the Arts, has retired after more than 30 years with the agency.

Linda Paaymans has been promoted to chief financial officer of the Alabama State Port Authority, and Danny Barnett to vice president of human resources; Bill Inge, vice president of general cargo and central services, and Parrish Lawler, director of trade and development.

Downtown Florence Alliance has hired Stephanie Vess as executive director.

The AlabamaGermany Partnership has named JamisonMoneyFarmer PC Shareholder Bobby Ingram as its new chairman.

Alabama Governor Kay Ivey has been named chairwoman of the Outer Continental Shelf Governors Coalition.

Randall Breaux

Parts Distribution

Motion Industries Inc. has promoted Randall Breaux to president.

Real Estate

J.H. Berry & Gilbert Inc. President Philip Currie has been named to Real Estate Forum’s 2018 Top 50 Under 40 class.

The Birmingham Association of Realtors announced that two of its members, Linda Brooks of RealtySouth-I-459, and Ralph Parker, of Keller Williams Vestavia, have completed the final course of the Alabama Graduate Realtor Institute, earning the GRI designation.

Sam Winter & Co. has added Helen Bender as its newest agent.

Senior Living

Atlas Senior Living has promoted Greg Crutcher to chief marketing officer. Crutcher has been part of Atlas since its inception in 2013.

Technology

Adtran Inc. Vice President of Global Marketing Gary Bolton has been re-elected to the Fiber Broadband Association’s board for a three-year term.

Tourism

The Alabama Mountain Lakes Tourist Association his hired Tina Lawler as membership recruitment and legislative liaison.

Wealth Management

Sidney Roebuck Jr. has joined Argent Trust Co. as senior vice president/trust officer in its Birmingham office.

John Blalock, Brad Lowe and Chad Mosely, of Nowlin & Associates, qualified for Summit of the Inner Circle recognition by Ameritas. In addition, Ameritas recognized five Nowlin associates with the Leader Award. They are: Charlie Nowlin, Justin Craft, Jordan Cole, John Pelham and Stuart Gaines.

Royal Cup Rebrands Its Brews

One of Alabama’s most venerable private companies has put a fresh spotlight on a lineup of premium products 120 years in the formulation.

Royal Cup Coffee & Tea, based in Birmingham, has announced the completion of a strategic rebranding initiative across its product portfolio of premium coffee and tea sold in more than 25 markets across the country.

“For us, rebranding goes far beyond reimagining our portfolio’s aesthetic representations. From procurement to manufacturing to distribution, we’ve optimized and streamlined our internal processes and operations to deliver the highest-quality product lines and equipment to the right customers at the right time. This is a game changer for Royal Cup, and for all those with whom we have the pleasure of doing business.” said Bill Smith, CEO of Royal Cup.

Royal Cup customers will be the first to see the four new brand identities and products, all of which pay homage to the company’s 120-year tradition. As each brand is rolled out, Royal Cup says it will introduce its new product lines through “informational campaigns, video trainings and other educational tools.”

Founded in 1896, family-owned Royal Cup is a leading coffee importer, roaster and distributor of premium coffee and tea, serving the away-from-home market — fine and casual restaurants, hotels, resorts, clubs, offices and healthcare facilities. Smith, who became CEO in 2014, is the fourth member of the Smith family to head Royal Cup Coffee.

The strategic rebranding initiative includes consolidating several existing brands into a new family of four core brand identities: Prideland, Royal Cup Signature, ROAR and H.C. Valentine. Over the next several months, Royal Cup will sequentially introduce each of its four new brands to the market and begin product distribution throughout the U.S. and Caribbean.

“The rebranding of Royal Cup’s product portfolio was a purposeful, 18-month strategic endeavor to enhance the value of our goods and services, bolster our growth both nationally and internationally and position Royal Cup as an industry leader now and into the future,” said Anne Pritz, CMO at Royal Cup.

Business Catalyst Par Excellence: The Robert Trent Jones Golf Trail

Golf is a natural fit for business, offering hours of time to get to know people while building trust and friendship, says John Cannon, president of the Robert Trent Jones Golf Trail. Here he relaxes at Ross Bridge in Birmingham. Photo by Art Meripol

Raise the prospect of a five-hour long business meeting and watch the eyes glaze over. The mere suggestion can conjure up visions of cramped chairs, flickering fluorescent lights and lengthy power-point presentations.

Now take that meeting and move it to the golf course. Suddenly the participants are outside, getting exercise and soaking up the sunshine. They are able to be both casual and competitive. Yet, in one of the marvels of the game, they still can easily talk about business.

Indeed, golf is one of the few sports that people can enjoy while simultaneously having business discussions. There is no significant time to chat during a basketball or softball game. Bowling is too noisy, and many group activities — such as escape rooms — are too distracting.

But with golf, you hit a shot and then leisurely walk or ride in a cart to where the ball landed. During that time, you have a few minutes to discuss business. And then you do it again — over and over and over, for several hours. It’s a relaxing routine with a captive audience.

“Golf has always been a natural fit for the business community,” says John Cannon, president of the Robert Trent Jones Golf Trail, a series of 26 courses at 11 sites throughout Alabama. “You have an environment where people really get to know each other pretty well over five hours. You can create trusts and friendships that relate to your mutual business interests.

“The atmosphere of the golf course and the social aspect of the game can definitely help cement further business relationships. I have some relationships that are over 40 years old that started with a day on the golf course.”

Cannon says the longstanding connection between business and golf has been important to officials with the RTJ Golf Trail ever since the first courses were constructed in the early 1990s. While appealing to golfers was obviously the top priority, Cannon says the clubhouses at the courses were designed with the business community in mind as well.

“We want to make sure to have a place in each clubhouse with very flexible space where we can hold multiple meetings simultaneously,” Cannon says. “We knew we had to integrate ourselves with the business community in every one of our markets to be successful.

“Now we have hundreds of business partners. Every day that we’re open, we’re hosting a business meeting of some sort. Without it, we wouldn’t be nearly as successful as we are. We’re always looking for avenues to maximize our relationship with the business community.”

There are numerous places to play golf in Alabama, but the RTJ Golf Trail leads the way in terms of both scope and recognition. The trail hosts more than 1,000 events and 500,000 golfers each year, with visitors from all 50 states and an average of 20 foreign countries.

Here is a quick look at three of the trail courses and how they try to hit a hole-in-one with the business community:

Ross Bridge Golf Resort & Spa

Ross Bridge in Birmingham is sort of a Mount Everest-type challenge for golfers. If played from the back tees on each hole, Ross Bridge measures a staggering 8,191 yards in length, making it the second longest course in the United States and fifth longest in the world. Most courses are closer to 7,000 yards long.

The length of the course just means that the golfers have more time to get to talk to each other and possibly discuss business.

“Playing 18 holes at Ross Bridge allows you to really get to know somebody,” says Jonathan McKinney, director of sales and marketing at Ross Bridge. “You’re going to ask them where they’re from and talk about their family. The conversations that can occur on a golf course are kind of like what you can have while sitting on your front porch. You take down your guard and get to know somebody in a more personal way.”

Ross Bridge offers 16 events rooms with a total of nearly 20,000 square feet of meeting space, both indoor and outdoor. Rooms range from small spaces designed for no more than 10 people to a banquet room that can accommodate up to 1,200.

“A large part of what we do at Ross Bridge is group business with companies and associations,” McKinney says. “The course is a fantastic amenity for the groups. It’s one of the things that makes Birmingham stand out to these folks who are planning meetings. We can utilize and market the golf as a destination. These groups can come in to have a meeting, but they also have a world-class golf course to play.”

Marriott Shoals Hotel & Spa

Located on the Tennessee River in Florence, the trail course at the Marriott Shoals helped usher in a new wave of tourism to northwestern Alabama, according to Director of Sales and Marketing Selena Miller.

“Since we opened in 2005, there have been 12 additional hotels that have opened in this area,” Miller says. “We saw this area take a complete economic upturn. There were other golf courses around here, but nothing open to the public that was truly comparable to the Robert Trent Jones course. We were suddenly able to bring in business people who otherwise weren’t coming to the Shoals area.”

The Marriott Shoals has 19 event rooms with a total of more than 30,000 square feet of meeting space, including a room that can accommodate up to 2,000 people. Miller says many of the business groups, both large and small, incorporate a round of golf into their meeting schedule.

“We’ll get a large group that will have several meetings over the course of two or three days, and then have a morning or afternoon where they’ll take the whole group out on the golf course,” Miller says. “That’s such a great team-building experience.

“But we’ve also seen an increase in smaller groups, maybe a law firm or just some people who work together. Instead of a meeting, they’re taking a work trip with 12 to 16 people where they’re playing golf. And there are others who take their clients golfing and really have that one-on-one time where they can talk business and close those deals.”

Grand Hotel Golf Resort & Spa

The Grand Hotel in Point Clear has been around for so long that when it first opened in 1847, golf was played with wooden clubs and leathers balls. Much has changed since then, though the Grand — with its 200-year-old oak trees dripping with Spanish moss and views of Mobile Bay — remains an attractive place to mix business with leisure.

“The Grand is a special setting. You could not build a hotel like the Grand today,” says Kevin Hellmich, the Grand’s director of sales and marketing. “Everything about the Grand Hotel is a networking opportunity. You can have a cocktail reception on the ballroom patio, or sit outside Bucky’s Lounge around one of the nine fire pits.

“The setting here allows individuals to relax a little bit more and get to know fellow meeting attendees. They tend to be a little bit more unplugged at the Grand than they would be at a typical convention hotel.”

The hotel’s two trail courses also provide plenty of networking and business opportunities, which can be continued in one of the hotel’s 18 event rooms. There is a total of more than 37,000 square feet of meeting space, with the ability to accommodate up to 1,400 people in a single room.

“Our hotel recreation department can plan special team-building activities, including golf, for the corporate events we host at the Grand Hotel,” Hellmich says. “We feel like if we can get a first-time meeting here, then they’ll come back a second and third time, and the golf is certainly a part of that.”

Cary Estes and Art Meripol are a freelance contributors to Business Alabama. Estes is based in Birmingham and Meripol in Hoover.

Superlative Burbs: Fairhope

Sunset over Mobile Bay is a staple of life in Fairhope, where the pier lures visitors. Photos by Elizabeth Gelineau

Over the months, we are introducing several of Alabama’s wealthiest and most vibrant communities. This month we look at Fairhope — its history and ongoing appeal.

Fairhope

The City of Fairhope, now home to more than 19,000 people, began in November 1894 as a “Single Tax” colony of 28 members of the Fairhope Industrial Association, followers of the teaching of economist Henry George. As they chose the site of the former Alabama City, atop the bluffs on the eastern side of Mobile Bay, the creators of the community said they wanted a “fair hope of success” by cooperating to create a haven of equal opportunity, reward for individual effort and freedom from monopoly.

While the town has come a long way from its origins, attracting more than its fair share of artists, authors and other creators along the way — that original independent spirit and dedication to protecting entrepreneurship among its citizens is still strong, says Mayor Karin Wilson.

“We want to continue to protect and celebrate what made Fairhope great,” she says.

Early in its history, Fairhope drew notables like Sherwood Anderson, Clarence Darrow and Upton Sinclair for winter visits. Today, Fairhope charms visitors year round with its friendly spirit, as well as its picturesque surroundings, including a historic downtown, tree-lined neighborhoods and natural areas. Southern Living Magazine honored it as Best Small Town in the South in 2016.

“It’s really like nowhere else,” Wilson says. “And it’s the people who make it that way.”

Wilson and others in Fairhope fear, however, that their city could become a victim of its own success, as surrounding Baldwin County areas without protective zoning and architectural standards rapidly grow. Fortunately, she says, $650,000 has been designated from Restore Act funds for a Fairhope Area Community-Based Comprehensive Land Use Plan. “We’re trying to bring everyone together so that we can avoid congestion and all continue to enjoy the unique lifestyle we have today,” Wilson says.

Kathy Hagood and Elizabeth Gelineau are freelance contributors to Business AlabamaHagood is based in Homewood and Gelineau in Mobile.

Expansions Continue to Roll

A gleaming 2019 Passport makes its way down the line at Honda Manufacturing of Alabama in Lincoln.

Despite sluggish vehicle sales nationally and uncertainty over President Donald Trump’s trade and tariff policies, Alabama’s auto industry continues holding its own as the nation’s fifth-largest vehicle manufacturing state.

As parts of the U.S. were rocked in 2018 by General Motors’ planned layoff of 14,000 workers and associated plant closings, Alabama announced or completed several major auto plants and expansions. The grand prize was Mazda Toyota Manufacturing USA, a joint venture that’s building a massive, $1.6 billion facility in Huntsville.

Scheduled for completion by 2021, the plant will eventually have the capacity to build 300,000 vehicles a year and employ as many as 4,000 workers. That puts the facility in the same league as other large auto manufacturers in Alabama — Mercedes-Benz, Honda and Hyundai.

Expected traffic increases from the Mazda Toyota facility are so large that a portion of Interstate 565 near the plant is being expanded to prevent bottlenecks. Once Mazda Toyota is operational, it appears Alabama will become the nation’s fourth-largest auto producing state.

Another key project was begun last October when Mercedes-Benz broke ground on a 2 million-square-foot plant in Bibb County that will supply battery packs for electric SUVs the company will start producing in Vance at the start of the next decade. The Bibb County facility is part of a $1 billion plan Mercedes-Benz has announced to make electric vehicles in Alabama.

In Montgomery, Hyundai is spending $388 million to build a new plant for manufacturing engine heads and enhancing existing operations, adding 50 jobs in the process. In Birmingham, Indiana-based Autocar opened a $120 million facility that will employ 746 people when fully operational. Autocar brings a new look to Alabama in that it will build heavy-duty trucks for commercial and municipal use.

Honda announced last July that it would spend $55 million for an expansion at its plant in Lincoln. The expansion, combined with one announced in 2017, is adding more than 425,000 square feet of space to Honda’s plant at a cost of $150 million.

Toyota, meanwhile, began producing a next-generation 4-cylinder engine last year following a $106 million investment that added 50 jobs at the company’s Huntsville plant.

All of this is positive news given that Alabama’s vehicle production numbers have slipped since 2016, when the state made a record 1.1 million units. That number fell to slightly less than 1 million in 2017 and is expected to be about the same when 2018 figures are released.

Those lower numbers reflect lackluster automotive sales nationally. Vehicle sales in the U.S. peaked in 2016 at 17.5 million vehicles and were forecast to be 16.7 million in 2018.  Despite the slowdown, Alabama’s auto industry has fared well, making one of every four passenger vehicles produced in the South.

“I see a very positive picture for the automotive industry in Alabama,” says Ron Davis, president of the Alabama Automotive Manufacturers Association. “We have the Mazda Toyota plant coming. Our OEMs are expanding and preparing for the future. Mercedes-Benz and others are positioning for electric vehicles and technologies of the future.

“Our educational institutions, Alabama Industrial Development Training, Alabama Technology Network, the community college system, the Department of Commerce, the local communities, the major automotive manufacturers, and I would include the AAMA — we’re all working together as a team. As I look around the country, I think what we have in Alabama is unique.  Greg Canfield at the Department of Commerce and Gov. (Kay) Ivey have worked closely with AAMA and been very strong partners with the industry.”

Although the large auto manufacturers are the industry’s flagships, most of Alabama’s roughly 40,000 automotive industry jobs exist within an extensive network of more than 200 suppliers. New construction and expansion activity among those companies also has been brisk.

A few examples begun or completed last year include Japanese supplier Yorozu’s $110 million facility in Jasper, which company officials say could have 300 employees by 2020.  Topre America completed an $80 million expansion in Cullman, with plans to back it with 98 jobs filled early this year.

MoellerTech’s new $46 million facility in Bibb County opened with 50 employees and the company hopes to have 220 by the end of 2019. Work has started on a $115 million plant in Huntsville, where Bocar plans to eventually employ 300 people. SMP opened a 700,000-square-foot plant in Tuscaloosa with 320 employees, a number the company hopes will grow to more than 1,000.

A few other names landing in the state or expanding existing operations are Unipres in St. Clair County, Eissmann in Pell City, Hwashin in Greenville, Woodbridge in Huntsville and New Flyer in Anniston, a major player in bus transportation.

As part of its rise on the national automotive stage, Alabama’s auto industry has grown into America’s third-largest vehicle exporter, trailing only Michigan and South Carolina. Alabama’s light vehicle exports — sedans, SUVs and light trucks — hit their peak value in 2016 at $7.9 billion. That slipped to $7.75 billion in 2017, but the state remains a major export player.

In support of the state’s auto manufacturers, the Alabama State Port Authority is teaming with a South American partner to develop a $60 million facility that will allow vehicles to be driven directly onto cargo ships for export.

Despite Alabama’s success, there is pervasive uncertainty here and throughout the nation’s auto industry because of President Trump’s trade and tariff policies. Prices for aluminum and steel have increased under Trump, and retaliatory tariffs are already impacting exporters of American-made vehicles, including those made in Alabama.

“Just as Gov. Ivey has expressed, we are concerned that import tariffs will damage Alabama’s growing automotive industry and put good jobs in our state at risk,” says Steve Spencer, president of the Economic Development Partnership of Alabama. “Already, companies in the state have been forced to respond to tariffs on steel and aluminum.

“All of this creates uncertainty, which is never good for economic development. If exports from the U.S. are hit with retaliatory tariffs, then products made by our automakers become less competitive on the world market.”

What happens as a result of trade policy remains to be seen. In the meantime, the AAMA’s Davis says the biggest challenge for Alabama’s auto industry remains workforce development. “The largest challenge we have is to continue doing the right thing for building a pipeline of workers,” he says. “We’re blessed to have wonderful jobs in an expanding industry, and the biggest challenge we have is to make sure we have qualified workers to do the jobs.”

Charlie Ingram is a freelance contributor to Business Alabama and former editor of our sister publication, Southern Automotive Alliance. He is based in Birmingham.

Hyundai Sees Opportunity in Collapse of U.S. Sedan Giants

Crafting Hyundai vehicles at Hyundai Motor Manufacturing Alabama in Montgomery.

Americans are enamored with the SUV these days.

The sedan? Well, it seems U.S. drivers are just not into them the way they use to be.

Last fall, General Motors announced plans to drop six of its sedans to focus on SUVs and trucks. Ford Motor Co. also has announced plans to end North American sedan sales. And before that, Fiat Chrysler Automobiles stopped producing the Chrysler 200 and Dodge Dart.

But Hyundai Motor Co., based in South Korea, is one automaker that plans — at least for the foreseeable future — to continue assembling its Elantra and Sonata sedans in the United States at plants like Hyundai Motor Manufacturing Alabama (HMMA) in Montgomery.

While other carmakers are cutting back on producing sedans in the United States, Hyundai sees opportunity, says HMMA spokesman Robert Burns.

“The demand as a whole is not there today,” Burns says, “but because so many of the other OEMs have made the decision to step out of the sedan segment, it’s allowing us to sustain our business model.”

While Sonata and Elantra sales held steady, Tucson and Kona SUV models increased. And Burns expects the newly redesigned Santa Fe to be competitive, so that production will increase this year. 

While Burns says specific numbers were not available by press time, HMMA, with its 2,800 full-time team members, assembled approximately 328,000 vehicles in 2018. In addition, the plant is projected to produce approximately 335,000 vehicles in 2019.

Meanwhile, Hyundai is moving forward on its $388 million expansion project, building a new 260,000-square-foot shop to manufacture engine heads. The investment also will pay for engine head machining equipment, as well as machining equipment in the existing engine shop that HMMA is retooling, Burns says.

The new engine head shop will help the plant prepare to produce the next-generation engine, the Theta III, that will support vehicle assembly not only at HMMA, but also at Kia Motors Manufacturing Georgia. Production of the Theta III is set to begin in spring 2019, Burns says.

Besides making vehicles for markets throughout the United States and Puerto Rico, HMMA also exports vehicles to Canada, Mexico and El Salvador. HMMA exported approximately 17,000 vehicles by the end of 2018, Burns says.

Last fall, the United States, Mexico and Canada signed a new trade pact at the G-20 Summit in Argentina that aims to replace the North American Free Trade Agreement (NAFTA). NAFTA removed tariffs on goods traded among the three nations.

Among the requirements of the new agreement, vehicles must have 75 percent or more of their parts made in North America to avoid a tariff. Under NAFTA, the requirement was only about 62 percent. Also, by 2023, between 40 and 45 percent of the auto parts must be assembled by workers making at least $16 an hour. 

The next step is for the legislative bodies in all three countries to ratify the new agreement before the pact goes into effect.

“Hyundai has always supported fair trade,” says Burns, “and we’re pleased that the trade agreement between the United States, Canada and Mexico remains a trilateral agreement. We as a company have a North American presence because we export to Canada and Mexico.”

But the new agreement is exempt from the Trump administration’s tariffs of 25 percent on steel imports and 10 percent on aluminum imports.

Last spring, the United States and South Korea renegotiated the existing U.S.-Korea Free Trade Agreement (KORUS). Under that revised agreement, South Korean steel imports will not be subject to the 25 percent tariffs, but instead to a quota of 70 percent of the average yearly steel imports between 2015 and 2017.

However, automakers like Hyundai remain concerned because the Trump administration is using Section 232 of the Trade Expansion Act of 1962 to justify conducting investigations on steel and aluminum imports, as well as vehicles and auto parts, in the interest of protecting national security.

As of December, the U.S. Court of International Trade was deliberating a lawsuit brought by steel importers over the matter but had not yet reached a decision.

Burns says the tariffs under Section 232 could have a devastating effect on the overall automotive industry.

“We’re concerned that we can’t really change the supply chain overnight if they choose to do a 25 percent tariff on parts. And that would significantly raise our costs here in Alabama for those parts that may be imported. So we’re hoping the administration doesn’t implement that tariff because we strongly believe that imported autos and auto parts are not a national security threat.”

But for now, the team members at HMMA are continuing to assemble Elantras, Sonatas and the Santa Fe. The plant currently runs three shifts, five days a week, Burns says.

“We are here for the long run.”

Gail Allyn Short is a freelance contributor to Business Alabama. She is based in Birmingham.

New Model, New Record at Honda

The all new Honda Passport SUV takes shape at the Talladega County plant.

Officials at the 4.6 million-square-foot Honda Manufacturing of Alabama plant are looking forward to a successful year after hitting production milestones in 2018.

For the second consecutive year, the Honda facility in Lincoln built a record number of Pilot SUVs in 2018. In early December, the plant also started mass production of the 2019 Honda Passport, a new two-row, midsize rugged SUV that will go on sale at dealerships early this year.

HMA Vice President Mike Oatridge says the Passport is based on Honda’s Global Light Truck platform and shares much of its underlying structure with the three-row Pilot SUV and Ridgeline pickup, including a highly rigid unibody construction. The vehicle is being built exclusively in Alabama.

Oatridge says the new Passport will play a critical part in helping Honda meet high demand within the U.S. light truck market.

“As we have seen in the market, SUVs are extremely popular and we see an opportunity to expand customer choice with a five-passenger, V6-powered SUV that slots between the Honda CR-V and the Pilot in our lineup,” Oatridge says.

Oatridge says the Passport, which debuted at the Los Angeles Auto Show last September, should appeal to buyers seeking a more powerful and rugged five-passenger Honda SUV. The Passport also revives the nameplate of an SUV Honda had available in the 1990s and early 2000s, according to the Alabama Department of Commerce.

“It’s more powerful and rugged than the CR-V, and more sporty and personal than the family-focused Pilot,” Oatridge says.

The Passport production launch was the fourth new model re-design at HMA in the last four years — an unprecedented move for any Honda manufacturing facility in North America. In addition to the Passport, HMA also produces several other award-winning Honda models, including the Odyssey, Pilot, Ridgeline and V-6 engines.

Preliminary numbers show HMA built a total of 356,569 minivans, SUVs, pickup trucks and V-6 engines in 2018, including 189,964 Pilot SUVs, 120,427 Odyssey minivans and 46,178 Ridgeline trucks.

With more than $2.6 billion in overall capital investment, HMA has approximately 4,500 employees and an annual production capacity of more than 340,000 vehicles and engines.

Situated on 1,350 acres about 40 miles east of Birmingham, HMA also launched new logistics space in 2018, representing a total investment of more than $85 million. In addition, the factory is spending $54.8 million to improve welding operations at Line 2, which will add more than 50,000 square feet to the facility by early 2021.

The new facilities span nearly 400,000 square feet and allow Honda to better streamline logistical operations. Oatridge says the expansion will improve overall parts delivery, quality and organization across all HMA production lines.

When combined with 2017 investments, HMA has added more than 425,000 square feet to its production operations with an investment total of approximately $150 million. The Talladega County plant has seen a total investment of $2.6 billion since it began operations.

HMA operations currently include steel and aluminum blanking, stamping, welding, painting, plastic injection molding, aluminum casting and machining, ferrous machining, vehicle sub-assembly, body and engine assembly, vehicle testing and quality assurance. It is the first Honda factory to have both engine die-casting and machining and vehicle assembly under one roof.

Alabama’s automotive industry exploded in 1993 when Mercedes-Benz announced plans to launch a U.S. assembly plant in Vance. Honda, Hyundai, Toyota and multiple automotive suppliers quickly followed suit, helping Alabama become a critical production hub for the automotive industry.

The Alabama Department of Commerce reports Alabama automakers produced a combined 1 million cars and light trucks in 2017, while Honda, Toyota and Hyundai also made about 1.7 million engines. Total employment includes more than 40,000 workers, about half of whom work for Alabama’s growing automotive supplier network of over 200 companies.

Oatridge says that 2019 marks nearly two decades since HMA started production on November 14, 2001, in Talladega County. The plant is part of a larger global corporation that provides a full line of Honda vehicles, including the Fit, Civic, Insight, Accord and Clarity series passenger cars; the HR-V, CR-V, Passport and Pilot SUVs; the Ridgeline pickup; and the Odyssey minivan.

The Japanese company began producing vehicles in America more than 36 years ago and currently has 19 major manufacturing facilities across North America. In 2017, more than 90 percent of all Honda automobiles sold in the U.S. were made in North America using both domestic and globally sourced parts.

As demand grows, Oatridge believes HMA will meet the manufacturing requirements of Honda’s expanding product line and beyond.

“It is the craftsmanship and dedication of our 4,500 associates which brings to the marketplace the high-quality Honda products that our customers want and need,” he says.

Lucy Berry DeButy is a freelance contributor to Business Alabama. She is based in Decatur.

New Automotive Supplier Makes Big Statement in Tuscaloosa

SMP Automotive Systems Chairman Vivek Chaand Sehgal (fifth from the left) joined company, state and local officials in April for the opening of the company’s $150 million plant in Tuscaloosa County.

In April 2018, an automotive supplier new to Alabama opened its first plant in the state. Located in Tuscaloosa County and spanning 700,000 square feet, the facility is owned by Samvardhana Motherson Peguform, an Indian company with operations in 41 countries. The new outfit is called SMP Automotive Systems Alabama.

“SMP represents a solid addition to the growing auto supply chain network radiating from the Mercedes-Benz assembly plant in Tuscaloosa County,” says Greg Canfield, secretary of the Alabama Department of Commerce. “The company has made a major investment in its ultra-modern Alabama facility, which stands as a powerful testament to the state’s attractiveness to businesses around the world.”

In 2015, when SMP executives initially announced their plans to build a $150 million plant in Alabama, they estimated that the factory would employ 650 people. But by the time the plant opened last year, those figures had increased, and the company expects to eventually employ almost 1,200 workers.

“We are excited about the opportunities that this new plant will bring us,” said Vivek Chaand Sehgal, chairman of Samvardhana Motherson Group, SMP’s parent company, at a grand opening ceremony for the new plant. “Our focus on North America will continue as we explore new areas in which we can bring value to our customers.”

Serving a Growing Industry

The new SMP Automotive plant will focus on producing door panels, bumpers, claddings, roof spoilers and running boards for Mercedes-Benz U.S. International, the automaker’s assembly plant just a few miles away. With so many other automakers nearby — including Honda, Hyundai and a new Mazda Toyota plant under construction in Madison County, plus more just over borders in Mississippi, Georgia and Tennessee — SMP will have opportunities to expand its customer base without going very far.

The Tuscaloosa County plant continues SMP’s growth plans in North America, where it already has 25 manufacturing facilities in the United States and Mexico. Overall, the company has 230 facilities in 37 countries.

Recruiting SMP Automotive

The existing Mercedes-Benz plant in Tuscaloosa County is credited with kicking off a lasting, successful automotive industry in Alabama when it opened in 1997. And that plant, the state’s first automotive success, continues to play a role in attracting more automotive employers to the area, including SMP.

The supplier was attracted by the Tuscaloosa area’s close proximity to its customer, Mercedes-Benz, but a collaboration of local groups worked together to bring the company to Alabama. In the spring of 2015, the state Department of Commerce and the Tuscaloosa County Industrial Development Authority learned that SMP was selected by Mercedes-Benz U.S. International as a supplier for the automaker’s new SUV platforms, Canfield says. The two organizations worked to develop Project “Black Neutron,” a campaign to locate SMP in Alabama. They worked closely with Andreas Hauser, who was SMP managing director and head of Corporate Office Europe and Americas.

“The Department of Commerce works closely with its allies like the TCIDA to bring high-caliber companies and new jobs and opportunities to the state,” Canfield says. “In addition to supporting the broad-based recruitment effort focusing on SMP, the Commerce Department’s AIDT arm has been providing workforce development assistance to the company valued at $3.5 million.”

Along with the Tuscaloosa County Industrial Development Authority and the Alabama Department of Commerce, other groups including Mercedes-Benz U.S. International and community leaders partnered to help recruit SMP, says Donny Jones, chief operating officer for the Chamber of Commerce of West Alabama and executive director of West Alabama-Works. “The power of partnerships like these helps to continue to move Tuscaloosa County and West Alabama forward, making this region a desirable place to work and live.”

Benefiting the Local Community

Automotive suppliers have become an important engine in the state’s economy. Employment in Alabama’s auto parts manufacturing sector has risen nearly 80 percent in this decade, while employment at the original equipment manufacturers (OEMs) has risen almost 30 percent, according to St. Louis Federal Reserve Bank data.

“Both segments will likely see substantial growth as Mazda Toyota Manufacturing launches production and Mercedes-Benz builds out its second campus in Bibb County,” Canfield says. “Developing partnerships with world-class companies such as SMP strengthens the auto industry’s foundation in the Tuscaloosa region and in Alabama. It also sets the stage for sustained growth and job creation in the state’s advanced manufacturing sector.”

A number of automotive suppliers have located in Alabama in recent years, but SMP’s arrival is especially important because it is classified as a Tier 1 supplier, meaning it supplies parts or systems directly to OEMs.

“As a Tier 1 supplier, SMP brings close to 1,200 jobs to the region with a host of many different types of careers,” Jones says. “From injection molding to operations to administration, there are a variety of competitive, great careers at this plant, giving our citizens wonderful opportunities to work in a growing industry.”

In addition to providing a wide range of career types, Tier 1 suppliers are also known for providing higher wage rates and competitive benefits for their employees, and SMP will be no different, Jones says.

Nancy Jackson is a Birmingham-based freelancer for Business Alabama.

Mercedes-Benz Expansions Continue with New Bibb County Facility

Mercedes-Benz team members from the Assembly 2 line in Vance celebrate the all new GLE sport utility vehicle.

Mercedes-Benz U.S. International (MBUSI), based in Vance, continues to expand its Alabama operation, which manufactures GLS, GLE, GLE Coupe models for distribution worldwide and the C-Class for the North American market. The fourth-generation Mercedes-Benz GLE began production in October and will be in showrooms as early as this spring.

Manufacture of electric vehicles, under the EQ brand, is expected to begin in Vance by the beginning of the new decade, says Jason Hoff, president and CEO of MBUSI. Globally Mercedes-Benz has plans to launch at least one electric vehicle in each model series no later than 2022. “We always want to stay on the advanced edge of the automotive industry and be in the position to meet consumer demand for fuel, hybrid and electric engine vehicles,” Hoff says.

Mercedes invested $6 billion in its first two decades in Vance, where all Mercedes-Benz SUVs have been produced since they were introduced in 1997. Now the company is spending an additional $1 billion to build a consolidation center and battery factory on 280 acres in the Scott Davis Industrial Park in nearby Woodstock, as well as to kickstart production of electric vehicles at Vance.

The new Woodstock facilities will be seven miles from the Vance site, which was the first large Mercedes-Benz production plant established outside Germany. Construction of the Woodstock consolidation center and battery plant is expected to be complete this year.

“Part of the attraction of the Woodstock location was its proximity to the plant,” Hoff says.

The consolidation center will supply vehicle assembly kits and spare parts to overseas markets, while the battery facility will be part of a new global battery production network for Mercedes-Benz and primarily used to support vehicle production at Vance. Some batteries may be produced for export if demand requires.

The Vance plant will become one of six Mercedes-Benz EQ model production sites across the world and the Woodstock battery plant one of eight such battery plants worldwide. The Vance plant will be updated to accommodate traditional, hybrid and electric vehicle manufacturing.

“The mix will depend on consumer demand,” Hoff says. “We want to have the flexibility to manufacture whatever is needed.”

The Alabama operation, currently at more than 3,700 workers, is part of Stuttgart, Germany-based Daimler Group, which currently has 23 primary sites across this country. Those U.S. locations manufacture passenger and commercial vehicles and are home to other group businesses, such as Daimler Financial Services. In combination, the sites employ about 26,000 workers or 8.7 percent of Daimler Group’s total worldwide workforce. Total revenues for U.S. operations in 2017 was EUR 40.5 billion.

With the expansions to the Alabama operations, including the ramp up of electric vehicle manufacturing, an additional 600 or more employees will be needed over time, the company projects. MBUSI representatives continue to work with community colleges and universities to help develop a stronger automotive workforce.

With the advent of a new decade of electric car manufacturing, “We will be providing training to our current workforce to give them the new skills needed for manufacturing electric vehicles, as well as other advanced technologies,” Hoff says.

The Vance plant, the first major automaker in Alabama, has helped the state draw supplier firms, too. The Vance operation uses 200 U.S.-based suppliers and continues to attract additional local suppliers.

The plant has ramped up production for the new-platform GLE model, which is expected by Mercedes-Benz and others in the industry to be in high demand. The slightly larger, more aerodynamic GLE, with an abundance of user-friendly, high-tech features, made a splash at the Paris Motor Show last fall. Historically, the GLE has been the automobile manufacturer’s bestselling luxury SUV model.

“We’ve been focusing a lot of effort at the plant toward the new model,” Hoff says. “There’s much excitement about it.”

The new GLE has an optional third row of seats and “e-active body control” chassis for a smoother ride. Its “free-driving mode” aids in off-roading and getting the vehicle free from sand or snow. One of the new SUV’s engine options offers a mild hybrid energy boost from an EQ Boost starter-generator.

About two-thirds of the SUVs produced in Vance are exported to more than 135 countries, including China, one of the company’s strongest markets. The plant produced 300,000 vehicles in 2017, and more than 3 million vehicles have been built in Vance since production began. The operation is the second largest automotive exporter in the country, according to Mercedes-Benz.

Because of its global reach and significant export business, trade issues, including tariffs, do affect MBUSI, Hoff says. The company got some good news in December with the United States and China’s announcement of a 90-day moratorium on tariff increases. Both countries agreed to work together to negotiate their trade disagreements. “We are hoping negotiations continue in a positive way for everyone’s benefit,” Hoff says.

Multi-year contracts with suppliers make rapid tariff increases difficult for automotive manufacturers to absorb. But Mercedes-Benz hopes to weather changing trade policies because of the quality of its product and consumer demand.

“Being an international company, we are for free trade in general,” Hoff says.

Kathy Hagood is a Birmingham-based freelancer for Business Alabama.

Toyota Surpasses 6 Million Engines and Builds a New Platform

Toyota Alabama President David Fernandes and Team Member Phillip Powell perform a quality confirmation check during the final stages of assembly on the plant’s newest 4-cylinder line.

In August 2018, Toyota Motor Manufacturing Alabama (TMMAL) celebrated the production of its six millionth engine. By the end of 2018, the plant’s annual production was approximately 630,000 engines, roughly 2,600 engines per day and five times as many engines produced as when it began operations in 2003.

TMMAL President David Fernandes, who has been with Toyota for 19 years and has served as president of Toyota Alabama for two years, credits that volume to the dedication of the plant’s 1,400 team members.

Looking ahead to 2019, Fernandes anticipates another high-volume year to meet market demand, due in part to the plant’s unveiling of a new 4-cylinder engine in October 2018 as part of its Toyota New Global Architecture (TNGA) platform. The TNGA engine, a $106 million investment for the company, will replace the plant’s current 4-cylinder line and, for now, is being manufactured for Toyota’s RAV4 model.

“TNGA will improve the performance of all vehicles,” says Fernandes. Features include increased fuel efficiency, reduced emissions, more responsive handling and providing a more stable and comfortable drive. “Also, by investing in a more flexible production environment, we can build ever-better cars for our customers now and respond quicker to market demands down the road.” Most vehicles produced in North America are slated to adopt TNGA with their next full model changes.

The Alabama facility is the only Toyota plant globally that produces 4-cylinder, V-6 and V-8 engines under one roof. Its engines go into five of the 10 Toyota models manufactured in North America. Currently, roughly 41 percent of its production volume lies in V-6 engines built for the Tacoma and Highlander, 36 percent is 4-cylinder engines for the RAV4 and Highlander, and 23 percent is the large V-8 engines that go into the Tundra and Sequoia models.

“About one-third of all vehicles manufactured in North America are powered by engines built right here in Alabama,” Fernandes says. “This makes us a critical part of the supply chain for Toyota operations and one of the largest Toyota engine plants in the world.”

Looming over those impressive production numbers, however, is the potential impact that rapid changes to trade policy could have on the plant, particularly its exports. Half of the engines produced at TMMAL are shipped to Canada and Mexico. Fernandes is naturally concerned. “Tariffs threaten to increase the cost of our vehicles, which could harm the industry by impacting sales, production volumes, ultimately jobs.” He adds that the cost of Toyota Tundras, for which his plant builds engines, is estimated to increase by $2,800.

In January 2018, Toyota and Mazda announced they would open an auto plant in Huntsville anticipated to produce 300,000 cars annually and employ as many as 4,000 people. Groundbreaking took place in November 2018, just 14 miles away from the TMMAL engine plant. Fernandes credits a significant part of Toyota’s decision to expand its U.S. footprint in Huntsville to the strong community ties his plant has established over the years.

“It’s because of good, long-standing relationships previously developed by this plant that helped bring Mazda Toyota to Alabama.”

That sort of collaborative spirit has become part of the bedrock of TMMAL and is especially apparent in its focus on expanding its workforce development efforts. In partnership with Calhoun Community College, TMMAL created the Alabama Federation for Advanced Manufacturing Education Advanced Manufacturing Technician Program in 2014. The program, which allows students to gain workplace experience and make a salary while earning their degree, has helped develop a pipeline of skilled maintenance technicians for the Toyota engine plant. Since the program began, it has expanded to include 12 other companies that also sponsor students.

“We call it ‘growing our own,’” says Kim Ogle, corporate communications analyst at TMMAL. “Not only does this benefit Toyota, but the industry as a whole.”

Ogle stresses the importance of starting workforce development early. “The key is engaging with students as early as elementary school to get them excited about career fields that they don’t even know exist,” she says.

In addition to its classroom-to-career approach, TMMAL has also partnered with Alabama Industrial Development and Training (AIDT) for new hire assessment and training. Trainees attend orientation classes at AIDT’s Robotics Technology Park in North Alabama, where they are given specific information about their job and its requirements and participate in a series of hands-on testing that helps determine their skill sets. 

“The labor market in North Alabama is very competitive and as a result, we continually work to develop comprehensive strategies for the recruitment and training of team members,” says Fernandes.

To date, Toyota has invested more than $24 billion in its U.S. operations and has committed to an additional $8 billion over the next five years. “These investments demonstrate our ongoing commitment to the U.S. and, of course, our team members and the communities where we do business,” Fernandes says.

Katherine MacGilvray is a Huntsville freelancer for Business Alabama.

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