German companies have invested $8.4 billion and created nearly 15,500 jobs in Alabama over the past two decades, and the prosperous relationship is poised to grow even stronger.
State exports to the European nation are on the rise, and at the same time, Germany’s foreign direct investment in Alabama remains strong.
There are also new and ongoing efforts to develop more business, cultural, educational and social ties between individuals and organizations with a vested interest in each side.
Germany is one of Alabama’s most important economic allies, said Greg Canfield, secretary of the Alabama Department of Commerce.
“Certainly Mercedes-Benz and its network of suppliers have played a major role in the creation of Alabama’s auto industry, which has in turn transformed the state’s economy and the lives of many residents,” Canfield said.
“But there are also significant German investments here in industries including aerospace, chemicals, steel processing and more,” he said. “Like the automotive firms, these companies have found highly skilled workers in Alabama who are helping them achieve their goals, and we look forward to seeing even more growth in the future.”
Long-standing ties
More than 70 German companies operate in the state, according to the AlabamaGermany Partnership, a nonprofit founded almost 20 years ago following the startup of the Mercedes auto assembly plant in Tuscaloosa County. And while many people think the luxury automaker was the state’s first German company, that distinction actually belongs to Evonik Industries, a chemical manufacturer that has been operating in Mobile for more than 40 years, said Tine Hoffmeister, AGP executive director.
But Alabama’s ties to Germany go back much further than that, she said.
The city of Cullman was founded in the late 1800s by Col. Johann Gottfried Cullmann, a German refugee who was instrumental in bringing many more German immigrants to the region.
And in Huntsville, it was a team of Germans, led by Wernher von Braun, who pioneered U.S. rocket technology in the 1950s and 1960s and helped establish the city’s space industry.
Mercedes, however, does play a huge role when it comes to the profile of German investment in the state, Hoffmeister said.
“That’s because of their brand recognition,” she said. “Unlike some companies who make things people may not be familiar with, a car is something you can see and you can touch, so it’s had a big impact.”
It’s also a special time for Mercedes, which this year is marking its 20th anniversary of auto production in Alabama. The first customer-ready M-Class SUVs began rolling off the assembly line in Tuscaloosa County on Feb. 14, 1997.
New initiatives
The AlabamaGermany Partnership hosts a variety of events to bring together Alabama residents, German citizens and their respective businesses, including its popular annual dinner held last month at Talladega’s International Motorsports Hall of Fame. New and expanding German companies in Alabama were recognized.
Hoffmeister said one of AGP’s newest initiatives is a young professionals group.
“With the young professionals group, we’re trying to get a new generation involved in the mission of the AlabamaGermany Partnership,” she said. “Some are American, and some are German. We do German company tours and host networking events. We hope they will be helpful in connecting with young people who are still in school and deciding what to do with their lives.
“There are so many opportunities with German companies that a lot of people don’t realize.”
Along those lines, another new initiative at AGP is an effort to document all of the available internships, apprenticeships and co-op education programs at German companies in Alabama to better connect students with those opportunities.
Economic partners
Germany consistently ranks high among Alabama’s trading partners and countries responsible for the most foreign direct investment in the state.The latest estimated FDI data shows German firms created 1,140 jobs in the state last year, the most of any other country, while their related combined investment of $177 million was the second highest.
Meanwhile, state exports to Germany reached almost $3.2 billion in 2016, a 29 percent increase from the previous year. The increase pushed Germany up the list of top destinations for Alabama-made products, from No. 4 to No. 3.
Not surprisingly, vehicles were the top Alabama export to Germany, rising 36 percent to $2.4 billion.
But other product categories also showed strength, including aerospace products and parts, primary metal manufacturing and plastics and rubber products, said Hilda Lockhart, director of the Alabama Department of Commerce’s Office of International Trade.
“The German government has deemed aerospace as a priority and it provides a very strong core of the industrial sector,” she said. “U.S. aircraft parts are readily accepted in Europe because of the quality – while some countries are not as good quality. Out of all the top markets for aerospace Germany ranked fourth in the world.”
In addition to Mercedes and its suppliers, other German companies that call Alabama home include Diehl Aerospace Inc., aircraft product support and maintenance; Aviagen, hatchery and poultry feed manufacturing; Kloeckner Metals Corp., steel processing; Jenoptik Optical Systems, micro optics; and TÜV Rheinland Industrial Solutions, testing laboratories.
AGP has a German Business Committee made up of German company leaders who meet about every other month, Hoffmeister said. The group has been helpful for new German companies, as officials share their experiences about building a business in the state.
There are also culture workshops, typically held once a year, to educate both Germans and Americans on cultural norms for business dealings.
And in addition to the big annual dinner, AGP hosts small dinners around the state to help bridge cultural divides.
“We have small dinners where we have Germans and Americans coming together and sharing a meal,” Hoffmeister said. “In my view, I think that’s one of the best ways of starting a relationship with someone else, by sharing a meal.”
This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.
