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Supplier patterns elusive

BNI Newswire

Statewide economic development officials have been looking at patterns in the location of automotive suppliers in the state, but even those statistics probably won’t predict just what Hyundai suppliers will do, they said.

"We’re excited about this automotive industry," said Gary Faulkner of the Alabama Development Office. "And we’re becoming a real threat to our competitors."

Much of the office’s time lately has been spent on the Hyundai project. Hyundai recently announced its intent to build a $1 billion facility near Montgomery, and communities all around the new plant – including Pike County – consider themselves in the running for suppliers.

Hyundai was just the latest coup for Alabama in the automotive industry. Mercedes Benz, Honda and Toyota all have facilities in the state.

And because of that success, Faulkner and his colleagues have been examining data – "just the facts," he said – to determine the patterns of where suppliers located relative to the automakers.

For example, they found that Mercedes suppliers were clustered mainly around Interstates, while Honda suppliers located further from them. Mercedes suppliers more often than not chose industrial parks, while Honda suppliers did not, Faulkner said.

So how would the communities competing for Hyundai suppliers fit into those patterns?

Faulkner said it might not matter, since developers don’t know what philosophy Hyundai will choose for its suppliers, much less what suppliers it will choose. Honda’s philosophy, Faulkner said, was to locate suppliers based on defined criteria. Mercedes, meanwhile, located suppliers to meet delivery time. And Nissan, building a plant in Jackson, Miss., is locating its suppliers on campus.

State officials probably won’t know until July which direct suppliers Hyundai will choose to bring with it. The Montgomery Advertiser reported Wednesday that the carmaker has invited 43 suppliers to a May 29 seminar in South Korea.

The goal of statewide developers like Faulkner and Medders is to bring companies to Alabama; the communities must then compete for them locally.

In Pike County, local officials have said they feel confident Troy and the county will compete well. They site access to a four-lane highway, the close proximity to the Hope Hull location, and the available workforce as advantages.

Alabama has landed three of the last five auto manufacturing facilities to locate in the South, Faulkner said.

"They are clustering around Alabama," he said. "We couldn’t be in a better geographic location. Our whole automotive structure is growing."