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Flashback: Won't You Buy Me a Mercedes-Benz?

Gov. Jim Folsom Jr. —  proud of baiting the hook for Mercedes — referred to Alabama’s new statute as “The Folsom Incentives Act.”

Gov. Jim Folsom Jr. — proud of baiting the hook for Mercedes — referred to Alabama’s new statute as “The Folsom Incentives Act.”

Well into 1994, the state was still trying to digest the news, announced in September 1993, that Mercedes-Benz would build its first U.S. plant in Alabama.

Critics were howling that Alabama had given away the store — $253 million in tax abatements to Mercedes, as much as $300 million by other calculations.

Still bristling in 1996, the New York Times, in a column titled “O Governor, Won’t You Buy Me a Mercedes Plant?” figured Alabama paid “$200,000 for each job — 18 times what Tennessee paid for a Nissan plant in 1980, more than 7 times what Tennessee paid for the General Motors Saturn plant in 1985, 4 times what Kentucky paid for a Toyota plant in 1985 and 3 times what South Carolina paid for a BMW plant in 1992.”

Others were adding up the new jobs created by a slew of companies that cashed in on the incentives legislation prompted by the Mercedes prospect.

In the 14 months following the August 1993 passage of that law, 61 companies qualified for the incentives it offered. Those new plants and expansions promised $1.72 billion in capital investments and a total of 7,030 new jobs paying a minimum of $8 per hour.

Many of the new recruits were the first wave of Mercedes suppliers, including Rehau Industries and ZF Industries. But they also included a long list of non-automotive manufacturers “spread throughout the state, in towns such as Red Bay, Heflin and Guntersville, as well as the major MSAs,” Business Alabama reported in February 1994.

Among the beneficiaries were traditional industry sectors such as steel and wood products — companies like Hanna Steel, Tuscaloosa Steel, Standard Furniture, Wellbuilt Cabinets and Terry Farms. But they also included leaders in emerging technologies, such as Dynetics, Adtran and Research Genetics.

The Mercedes-prompted incentives legislation was drafted four months after Jim Folsom Jr. became governor. Weeks after he took office in April 1993, Alabama Development Office officials attending an auto show in Detroit first got wind Mercedes was planning a U.S. plant. Modeled on similar legislation in Kentucky and Tennessee, the incentives legislation was passed in August. The next month, Mercedes picked Alabama.

Chris McFadyen is editorial director of Business Alabama

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