Alabama's billion-dollar auto industry is positioned for the future, its executives say. But what that future will look like continues to be a mystery.
That was the theme of comments from executives with four auto companies who participated in a panel discussion tonight at the Birmingham Business Alliance's annual Chairman's Meeting at the Alys Stephens Center.
The players were Jason Hoff, president and CEO of Mercedes-Benz U.S. International, Mike Oatridge, vice president of manufacturing for Honda Manufacturing of Alabama, Andrew Taitz, the founder, chairman and CEO of GVW Group, the owner of Autocar, and John Hackett, general manager of Kamtek in Birmingham.
Oatridge made the message clear in his response to a question by Alabama Power's John Hudson III, the event moderator. American consumers, urged on by gas hovering around $2 a gallon, are still in love with the sport utility vehicle.
But government regulations over the next decade are going to dictate lighter vehicles that can travel farther on less gas. In 2012, the U.S. government mandated an average fuel efficiency for new cars and trucks of 54.5 miles per gallon by 2025.
"They don't fit together," Oatridge said of the desires of the consumer, and the coming regulations.
That means automakers have to change from using steel to aluminum, which has to be bonded rather than welded. It also mean alternative sources of power, like electric cars.
"It's going to change everything in the auto industry," he said. "The traditional way can't exist. The biggest challenge is where do we go. And once we go that way, there's no turning back. The infrastructure doesn't exist now."
Hoff said those changes will also dictate some changes in Alabama. When Mercedes came to the state in 1993, its decision was dictated by the state's untapped workforce and its infrastructure. Now, those two factors are challenges, he said.
He gave as an example Mercedes-Benz's expansion into neighboring Bibb County, announced earlier this year, to build a parts hub and a logistics center. These two buildings will be less than seven miles from the company's Vance plant. However, they will be situated on what is now a two-lane road that Hoff said is not adequate to the kind of traffic it will see once the expansions are up and running.
In addition, Hoff and Oatridge said their companies are reaching out into schools to encourage the next generation of workers. But they also fight the perception of what automotive jobs entail. Hoff said a person with a high school diploma, a two-year degree and some training, can make a low six figures in the auto industry while in his late twenties, and without thousands in student debt from seeking a four-year degree.
Oatridge joked that some people, when thinking of a factory job, envision a television scenario - Lucille Ball in the never-ending assembly line.
"It's very clean, very safe and very challenging," he said.
But Taitz said Autocar located in Alabama because of its workforce, while Hackett said coming to Alabama was an easy choice.
"We're here," he said, pointing to his colleagues on stage, "because of them."