Daimler AG to Invest $1B in AL Mercedes-Benz Facility

The German automaker will produce electric SUVs under the EQ sub-brand by 2020. Plans also call for a global logistics center, an after-sales North American hub and an electric battery factory near the Tuscaloosa facility.

Daimler AG to Invest $1B in AL Mercedes-Benz Facilities
Rendering of Daimler AG’s Global Logistics Parts Consolidation Center and after-sales North American hub near Tuscaloosa, Ala.

Daimler AG, which will invest an additional $1 billion in its Alabama footprint, has become the latest automaker to announce plans to expand its manufacturing operations in the U.S. this year. The German company will manufacture electric SUVs under its Mercedes-Benz EQ sub-brand in Tuscaloosa, Ala., and also build several other projects in the region, adding about 2 million square feet in the state.

The 20-year-old Tuscaloosa plant, which is already in the midst of a $1.3 billion expansion announced two years ago, will begin producing the SUV models of the EQ brand by 2020. The plant is currently being retooled to prepare for production of SUVs including plug-in hybrid models, which will make it easier to integrate the future electric models.

As part of the new $1 billion investment, a global logistics center and after-sales North American hub will be built near the Tuscaloosa plant, starting in 2018. Gray Construction, a family-owned company headquartered in Lexington, Ky., will be designing and building the 680,000-square-foot facility as part of the automaker’s first phase of the new investment. Stephen Gray, president of the company that specializes in engineering, architecture, and construction services, said the global logistics parts consolidation center, or PCC, will be operational in 2019. Mercedes-Benz said the after-sales hub will be open by 2020.

“This investment will not only have a tremendous impact on Alabama, but it will also encourage advancement of the automotive industry,” Gray said in a prepared statement.

Mercedes-Benz is also seeking a site in the region for an electric battery factory that will be the automaker’s fifth in the world, along with new facilities in Germany and China for a total investment of $1.2 billion on its battery production network. Construction on the Alabama battery factory, which is expected to be 1 million square feet, will start in 2018. The plant is slated to be operational by 2020.

The new facilities are expected to add more than 600 jobs. Mercedes-Benz U.S. International (MBUSI) already employs more than 3,700 team members and supports 7000-plus jobs on the approximately 1,000-acre site. MBUSI was the first automotive manufacturing location in Alabama and served as the catalyst for OEMs, suppliers and other supporting businesses to come to the area, which has grown over 20 years.

More auto plant expansions

In late March, Honda Manufacturing of Alabama said it was planning an $85 million multi-phase expansion of its $2.2 billion plant in Talladega County.

Other auto manufacturers have also announced expansions this year, including Toyota Motor Manufacturing, Kentucky, which said in April it was making about $1.3 billion in improvements to its 7.5 million-square-foot Georgetown, Ky., plant.

In January, Ford Motor Co. said it was spending about $700 million to expand its Flat Rock, Mich., plant as part of an overall $4.5 billion investment on electrified vehicles over the next four years. The announcement, made at the Flat Rock Assembly plant, calls for the factory to build high-tech autonomous and electric vehicles along with Mustang and Lincoln Continental cars at the plant where it will create a Manufacturing Innovation Center.

Last year, Mercedes-Benz Vans broke ground on a new Sprinter plant for the North American market in North Charleston, S.C. That $500 million investment was an expansion of its existing van assembly plant in North Charleston.

Mercedes-Benz also made news nearly three years ago when it decided to move Mercedes-Benz USA headquarters from its longtime home in Northern New Jersey to Atlanta. The German automaker started moving employees from Montvale, N.J., to temporary offices in Atlanta’s Central Perimeter in July 2015. It is currently building a $93 million headquarters in Sandy Springs, Ga., for 1,000 employees that is expected to open in early 2018.

Image courtesy of Gray Construction