Alabama's Automotive Corridor Nets 127,000+ Jobs
By Sherry Kughn
JSU News Bureau
January 14, 2004 -- A report released by the Center for Economic Development and Business Research (CED) at Jacksonville State University shows that the "I-20 Automotive Corridor," which runs from the Alabama state line near Atlanta through Tuscaloosa, is the main artery for the influx of 127,310 statewide jobs and the input of $5.4 billion now fueling Alabama's economic growth.
The study highlights the economic impact of the growing automotive industry upon Alabama, particularly on the counties from Calhoun to Tuscaloosa.
Dr. William T. Fielding, dean of the College of Commerce and Business Administration, prepared the report to assist JSU President Bill Meehan and his work with the Manufacturing, Economic Stimulus, and Free and Fair Trade Commission created by the Alabama legislature.
"I got involved with the impact study," said Dr. Fielding, "and realized the tremendous benefits to the state and this region."
According to the study, the entire I-20 Automotive Corridor serves as a powerful stimulus on Alabama's economic growth.
The report drew data from a 2002 survey of the Alabama Automotive Manufacturers Association, which reported fifty new automotive-related plants in the state in 2002, an increase from 112 plants in 2001 to 162 plants in 2002.
Manufacturing activity, according to the report, is measured on two levels -- direct manufacturing and spin-off activities. The latter includes two indirect effects -- purchases from domestic suppliers and expenditure-induced effects, such as spending by people who rely on automotive-related income.
Direct impact in the automotive industry accounts for 30,180 jobs with a $1.4 billion annual payroll. Indirect jobs number 53,530 at various suppliers with a payroll of $1.6 billion. Expenditure of these payrolls added 43,600 jobs to the state economy bringing the total jobs up to the 127,310 figure.
"I am excited for the benefits we've received for the state and this region," said Fielding. "In addition to the jobs, the tax collections add $150 million from sales and income taxes to education. And the impact offsets Alabama for the loss of low-income jobs related to the textile trade. The automotive industry offers our people better jobs."
The study breaks down data related to the automobile industry in various ways and uses such sources as the U.S. Government statistics, University of Alabama-Huntsville and the Center for Automotive Research at the University of Michigan.
"Dr. Fielding studied a national report by the University of Michigan and adapted it for our state," said JSU's CED director, Pat W. Shaddix. "He then made it more in-depth for our area."
Calhoun County's North American Bus Industries provides 710 direct automotive jobs, and projections show there are or soon will be 4,000 direct jobs at Honda in neighboring Talladega County. An additional 4,000 direct jobs are anticipated at Mercedes in Tuscaloosa County.
"I think we are a little low in our estimates for the future," said Shaddix.
More promising growth appears in Alabama's future, according to a study by the Alabama Automobile Association. Alabama, by 2005, should produce more automobiles than any Southern state except for Tennessee and Kentucky. The expected total of vehicles is 760,000 per year.
"I'm happy for the region and the state," said Fielding. "We'll see continued growth in manufacturing and suppliers for the next 20-30 years."
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