The state of Alabama has had significant success during the past decade in attracting expansion projects in automobile manufacturing — and that success doesn’t seem to be subsiding.
There were 29 new automotive plants established during the past two years with more than 1,300 new jobs, according to the Alabama Automotive Manufacturers Association. There were 44,834 direct automotive jobs in the state in 2005, compared with 31,197 jobs in 2003. Suppliers accounted for another 5,504 jobs in 2005, a 22 percent increase compared with 2003.
“The automotive industry has become a vital part of our state’s economy, and with recent plant announcements, the industry will continue to grow during the next few years,” said Bill Johnson, director of the Alabama Department of Economic and Community Affairs.
This success began with Mercedes-Benz, which started producing vehicles in Tuscaloosa in 1997, expanding operations seven years later. Since then, Honda and Hyundai have both launched operations in the state, and Toyota built an engine plant in Huntsville.
That’s a good decade from any point of view. Ed Castile, director of Alabama Industrial Development Training (AIDT), knows exactly where the credit should go: the state’s work force.
“The secret to our success is our work force,” he said. “Companies will tell you the reason why they are locating their expansion projects in Alabama is the work force.”
| States With Best Work Force Training Programs
1. Alabama
2. Georgia
3. Texas
4. North Carolina
5. South Carolina
6. Colorado
7. Tennessee
8. Kentucky
9. Arizona
10. Florida
Source: Expansion Management poll of corporate site location consultants, June 2006
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AIDT is the focal point of work force training in Alabama, offering services in many areas that are free of charge to new and expanding companies. It works with the entire educational infrastructure in Alabama, from K-12 through the Alabama College System (two- and four-year institutions) to make sure students have the skills necessary for companies and industries locating in the state.
Every technical skills training program in Alabama is certified, meaning teachers, curriculum and facilities comply with an industry standard.
“When you’re doing that, you’re graduating people who have skills,” Castile said. “In the end, it’s the work force. We’re the tool to help get that work force in place.”
Work force has increasingly become an important site location factor for companies considering an expansion or relocation. Companies want a return on their investment almost immediately after opening a new facility and that means having a work force that is trained before the plant is opened — no longer is on-the-job training acceptable.
States have created and refined work force training programs to meet this need. Many times, a well-skilled work force is the deciding factor if two or more site locations are similar.
In a poll of more than 80 site location consultants, Alabama’s work force training program was ranked No. 1 in the country. Georgia, Texas, North Carolina and South Carolina rounded out the top five. (For the top 10 states, see page 12.)
“We’re often asked to work with companies on specifics, since we’re helping them recruit, screen and train workers,” Castile said. “We know what is needed on the front line.”
AIDT cut its teeth on automotive work force training with the arrival of Mercedes Benz.
“Since Mercedes was the first automotive OEM [original equipment manufacturer] in the state, our first go around was a learning experience for both us and AIDT,” said Paula Lillard, vice president of human resources for Mercedes-Benz U.S. International Inc. “AIDT gained a lot of experience, which helped with the other OEMs that have come since.”
AIDT Increases Duties
After Mercedes-Benz decided to site its plant in Alabama, AIDT ran the work force selection system. Officials took in thousands of applications and did the screening. Candidates went through a 50-hour assessment process, which amounted to a refresher course on the basics to prepare them for an employment test.
AIDT continues to perform this function to this day and added to its responsibilities once the plant began operations and again when Mercedes-Benz expanded.
The organization gets employees acclimated to the Mercedes way of production, Lillard said. One example is Mercedes’ maintenance work force needs.
“AIDT worked with us in developing a maintenance apprenticeship program and provided instructors,” Lillard said. “We’ve had four groups come through [the program] and those students are now working in our maintenance department.”
AIDT helped Mercedes-Benz establish a high school production apprenticeship program for juniors and seniors, as well as develop a maintenance apprenticeship program in Tuscaloosa, which Lillard described as a way to give back to the community.
“We’ve hired away from some of our suppliers and other companies locally,” she said. “We can give some of those skills back through the program.”
Tire Manufacturer On Track to Break Even
The ability of AIDT to assume control of the Mercedes-Benz hiring and training process allowed the automaker to save significantly on time and money, Lillard said.
Those factors were also very much in play for Toyo Tire North America Inc., when it built a 1 million square foot facility in White, Ga. The company utilized the services of Quick Start, the state’s work force training organization.
The traditional work force for tire manufacturing has a high school education.
“They don’t bring any skills to the process,” said Jim Hawk, vice president and plant manger for Toyo Tire North America. “The burden on training and motivating them is on us.”
The company, a subsidiary of Toyo Tire Japan, opened the manufacturing and warehouse facility in December and, thanks to Quick Start, is on track to achieve its stated goal of breaking even financially within the first two years of operation, Hawk said.
“It’s my guess that if we didn’t have substantial help from Quick Start, it would have taken from six to 12 months longer to break even,” he said.
Without Quick Start, the opening of the plant would have been delayed by four to six months, Hawk added.
“In the beginning, we had zero employees,” he pointed out. “We would have had to hire a staff, design a program and work with the local community college to train our employees.”
Quick Start took the lead to design orientation programs, programs in HAZMAT and other safety initiatives, and problem-solving training courses. It also translated Toyo’s operating procedures from Japanese to English.
As a result, Toyo Tire was able to save $3 million to $5 million. It was money that was used for additional capital investments, Hawk said.
The money saved in work force training is money that can be put back into the plant. The time saved can be put into forming a staff, building the plant and starting up the equipment.
In that way, companies can be profitable more quickly.
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