Stuttgart of the Southeast—Alabama’s Opportunity to Define Itself within the Automotive Industry

Opinion piece by Dr. Heath W. Padgett, February 15, 2025

In 1993, Alabama was not on anyone’s radar as a hub for automotive manufacturing. That changed when then-Governor Jim Folsom spearheaded negotiations that brought Mercedes-Benz’s first U.S. manufacturing plant to Alabama. The arrival of the German automaker proved to be one of the most transformative economic developments in the state’s history, laying the groundwork for a thriving automotive sector that now includes Honda, Hyundai, Toyota, and Mazda.

Today, Alabama stands as one of the top states for automotive production, and with tariffs on the rise, global manufacturers are looking for ways to increase regional production within the U.S. more than ever. Now is the time for Alabama to capitalize on the looming trade war and seek opportunities to grow the state’s automotive enterprise—a win for Alabama, a win for industry, and a win for the Trump administration’s trade policies. Competition with neighboring state’s is tough with Tennessee, South Carolina, and Georgia also coming to mind, so Alabama’s elected officials need to proactively attract major manufacturers to our area and really emphasize Alabama’s rightful place as the “Stuttgart of the Southeast” before the other states beat us to the punch.

But what companies should we go after as a state? Are there any brands suited particularly well for an entry into Alabama?

Alabama should specifically call on Porsche to make our state its new home for North American SUV production. Over 24% of Porsche’s global sales come from the U.S. market, yet Porsche is one of only a few major car brands that does not currently manufacture in the U.S. Especially with tariffs on the rise, Porsche could substantially benefit from a move to regional production within the U.S., and Alabama is the perfect location for the company to build a factory.

A Proven Success Story: Mercedes-Benz in Alabama

Mercedes-Benz’s decision to build its $300 million plant in Alabama in the 1990s was met with skepticism. However, that investment has more than paid off. The facility now spans six million square feet, employs 4,500 workers, and has produced over 4 million vehicles. It has become a cornerstone of the state's economy, generating billions of dollars in revenue and attracting a network of Tier 1 and Tier 2 suppliers that service not only Mercedes but also other automakers in the region, providing a reliable framework for new manufacturers like Porsche to benefit from.

Alabama’s success in automotive manufacturing is reflected in the numbers: 

• The state ranks fifth in the nation for auto production, with 1.3 million vehicles  manufactured annually.

• 40,000 Alabamians are employed in the automotive sector, with active workforce  development programs in place. 

• $11 billion has been invested in Alabama’s auto industry since 1993.

• The Port of Mobile, the second fastest-growing U.S. seaport, facilitates global exports of  Alabama-made vehicles, including Mercedes’ electric EQ models. 

  
  

Infrastructure and Logistics Advantage 

One of the most compelling reasons for Porsche to choose Alabama is its strategic infrastructure  hub that combines access to road, rail, air, and sea transportation, ensuring efficient distribution  of vehicles and parts across the country and among its suppliers.  

In 2015 Porsche relocated its North American Headquarters nearby to Atlanta, GA, emphasizing  its long-term commitment to the region. 

A Highly Skilled Workforce 

When Mercedes-Benz announced its Alabama plant in 1993, one of the biggest concerns was  whether the state had the skilled labor force to support an advanced manufacturing operation.  That question has long been answered. Alabama now has one of the most highly trained  automotive workforces in the country. 

The Alabama Industrial Development Training (AIDT) program, established to support the  state’s growing manufacturing sector, has been a game-changer. Through AIDT, automotive  workers receive customized training in precision engineering and assembly, automated and  

robotics manufacturing, electric vehicle (EV) battery production, lean manufacturing processes, and more. 

The program has helped tens of thousands of workers gain specialized skills tailored to  automotive production, ensuring that companies like Porsche would have a steady pipeline of  trained employees ready to meet high-end production standards. 

Porsche’s Global Expansion Strategy 

Porsche has strategically expanded its manufacturing footprint beyond its traditional German  base in response to growing regional demand and logistical efficiencies. 

• Malaysia: In 2022, Porsche established a small-scale assembly plant in Malaysia,  marking its first factory outside of Europe. This facility caters specifically to the  Southeast Asian market, demonstrating the company’s ability to regionalize production  without sacrificing quality. 

• North America: By adding a North American facility to its portfolio, Porsche would not  only reduce logistics costs and import tariffs but also gain the ability to rapidly respond to  market trends and consumer preferences in the U.S.

Porsche: Already at Home in Alabama, Celebrating over 20 years at Barber Motorsports Park 

Porsche’s ties to Alabama extend beyond manufacturing potential; the brand has already  established a strong presence through the Porsche Track Experience at Barber Motorsports Park  in Birmingham, AL—the first of its kind in the U.S. Since its inception in 2003, the Porsche  Driving School has attracted thousands of enthusiasts and professionals to Alabama, providing  hands-on instruction in high-performance driving. The track not only serves as an ideal  environment for testing and refining Porsche vehicles, but also for establishing a significant  brand presence within Alabama. 

Business-Friendly Climate and Government Incentives 

Besides being a traditionally non-unionized labor environment with workers at Mercedes-Benz  factories voting overwhelmingly against joining the UAW in 2024, Alabama offers one of the  nation's most attractive taxation environments, featuring low taxes, affordable utilities, and a  reasonable cost of living, all of which enhance profitability for businesses and their employees.  The state provides a variety of tax incentives designed to assist with cost-effective startups and  ongoing operational savings. These incentives include investment tax credits, jobs tax credits,  property and sales tax exemptions, and participation in the AIDT program at no cost to qualified  employers. 

A prime example of Alabama's commitment to attracting automotive manufacturers is the  incentive package offered to Toyota and Mazda for their joint venture plant in Huntsville. The  total incentives exceeded $700 million, encompassing both state and local contributions. This  substantial investment underscores Alabama's dedication to fostering a robust automotive  industry and its willingness to support large-scale manufacturing operations. 

The Case for Porsche in Alabama 

Mercedes-Benz proved that Alabama can deliver world-class production while maintaining  German engineering precision. The state’s infrastructure, workforce, and commitment to pro business policies and incentives align perfectly with Porsche’s future production goals inside one  it its largest markets. With record-breaking U.S. SUV sales, regional production in North  America is a natural progression. Alabama provides the ideal location, talent pool, and incentives  to make this vision a reality. 

It’s time for Alabama and Porsche to partner together, making Alabama the Stuttgart of the  Southeast!

Sources: 

Alabama Department of Commerce. (2024). Taxes & Incentives - Made in Alabama. Made in  Alabama. https://www.madeinalabama.com/why-alabama/taxes-incentives/ 

Alabama Department of Revenue. (2024). Tax Incentives. https://revenue.alabama.gov/tax incentives/ 

Associated Press. (2018, January 11). Alabama incentives for Toyota-Mazda factory top $700  million. https://apnews.com/article/e55cef4b83314f38af801840d5106a54 

Associated Press. (2024, May 17). After decisive loss at Alabama Mercedes plants, powerful  auto union faces a setback. https://apnews.com/article/united-auto-workers-mercedes-vote union-organizing-bb5f6855474b0197b015d70273651a94 

Rocket City Now. (2025, February 2). Alabama braces for impact as global tariff war escalates.  https://www.rocketcitynow.com/ 

Alabama Department of Commerce. (2024, October 8). Automotive - Made in Alabama. https:// www.madeinalabama.com/industries/automotive/ 

Fox Business. (2024, May 17). Mercedes-Benz workers in Alabama vote against union in major  blow to UAW. https://www.foxbusiness.com/ 

Alabama Public Radio. (2024, April 20). UAW may face more opposition in Alabama. https:// www.apr.org/ 

The Hill. (2024, February 27). Majority of Alabama Mercedes workers join UAW as Southeast’s  union push grows. https://www.thehill.com/ 

Alabama Reflector. (2024, February 4). Why Mercedes-Benz workers are considering a union.  https://www.alabamareflector.com/ 

CBS News. (2018, January 12). Alabama incentives for Toyota-Mazda factory top $700 million.  https://www.cbsnews.com/news/alabama-incentives-toyota-mazda-plant/ 

Alabama Department of Commerce. (n.d.). Made in Alabama - Alabama Department of  Commerce. https://www.madeinalabama.com/ 

Alabama Department of Commerce. (n.d.). Sectors - Made in Alabama. https:// www.madeinalabama.com/industries/ 

Alabama Department of Revenue. (n.d.). Income Tax Incentives - Alabama Department of  Revenue. https://revenue.alabama.gov/ 

Economic Development Partnership of Alabama. (n.d.). Alabama Industries Automotive - EDPA.  https://www.edpa.org/

Economic Development Partnership of Alabama. (n.d.). Automotive - Economic Development  Partnership of Alabama. https://www.edpa.org/ 

Economic Development Partnership of Alabama. (n.d.). Alabama’s Taxes and Incentives - EDPA.  https://www.edpa.org/ 

BLS Strategies. (n.d.). Alabama | Economic Development Incentives & Financing Programs.  https://www.blsstrategies.com/