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Massive Expansion for a New Generation

Mercedes-Benz U.S. International Inc. continues a $1.3 billion expansion that will produce Mercedes’ next generation of SUVs.

SUV demand is up and Mercedes-Benz has a great one in the 2017 GLS450.

SUV demand is up and Mercedes-Benz has a great one in the 2017 GLS450.

In 1997, the German luxury automaker Mercedes-Benz began assembling M-Class sport utility vehicles at its newly constructed facility on 1,000 acres in the small, Tuscaloosa County town of Vance.

Mercedes-Benz was the first major car company to open a manufacturing plant in the state. In the years since then, other automakers — Toyota, Honda and Hyundai — chose to build assembly plants in Alabama, too. But Mercedes was the harbinger.

Twenty years later, the workers at what today is Mercedes-Benz U.S. International Inc. (MBUSI) produce a lineup of high-end vehicles that include the C-Class sedan, the GLE Coupe, the GLS SUV and the GLE SUV — formally known as the M-Class.

While a final tabulation of MBUSI’s year-end production numbers for 2016 were not released by press time, its president and CEO Jason Hoff pointed out that demand for the luxury vehicles had remained steady around the nation. 

“The overall data shows that it has been a strong year,” says Hoff. “The sales of SUVs, which is the main product that we build, have continued in a strong way. So that has translated into a good year from the production side.”

A report by Mercedes-Benz USA says November sales totaled 30,363 vehicles, up from the 30,043 vehicles sold during the same month in 2015. 

Among the November 2016 volume leaders that the Vance plant produces were the C-Class at 7,261 sold and the GLE at 4,694. Another volume leader was the E-Class at 4,642 units sold. 

The November sales numbers were up from October, in which the MBUSA reported having sold 28,659 units that month, which, however, was slightly down from the 28,952 units sold in October 2015. 

In 2013, MBUSI announced that it would build its own logistics hub to enhance operations. Then last fall, the company publicized plans to move from working with one logistics provider to contracting with three providers, which would include the Indianapolis-based Celadon Logistics; Penske Corp., based in Bloomfield Hills, Michigan, and Schnellecke Logistics USA, in Chattanooga, ending its contract with BLG Logistics. 

“In the past, we’ve had one logistics provider running our logistics center, which we opened in 2014,” says Hoff. “We went through a process and decided to split that contract into three different contracts. It’s a bit easier for us to manage, and we believe it’s also strategically a little easier for the service providers to manage.” 

In 2016, MBUSI also continued work on a $1.3 billion expansion of its assembly plant that will include a new 1.3 million-square-foot body shop, a larger, enhanced SUV assembly shop and an upgraded logistics IT system. 

The body shop will feature new, lightweight technologies “with innovative joining processes.” Moreover, the company plans to expand the SUV assembly shop by 139,930 square feet. 

Once complete, MBUSI officials say the expanded space will support the assembly of the next generation of SUVs, including hybrid models.

“Everything is on schedule,” says Hoff, “so if you were to drop by the plant now, you can see the building extension is more or less finished. There is still some work to do on the grounds and other areas. So that body shop is finished, and now we’ll start heading into the next stage, which is the installation of equipment and getting it technically ready for our next generation of SUVs.”

“It’s going to be exciting next year to celebrate 20 years,” says Hoff. “It is a huge milestone. You think back to what has happened over the last 20 years and the number of jobs and other opportunities that have been created through the growth of the automotive industry in Alabama. That, for me, is going to be a great story in [this first] quarter.”

Gail Short is a freelance contributor to Business Alabama.  She is based in Birmingham.

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