
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, September 30, 1993                   TAG: 9309300329
SECTION: BUSINESS                    PAGE: B8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: VANCE, ALA.                                LENGTH: Medium

IT'S GOIN' TO ALABAMA

SURELY IT HAD nothing to do with Mercedes' choice of the site for its much sought-after assembly plant. Surely. But the 1,000-acre tract near Vance, Ala., (pop. 250) will cost the German automaker about $100.

\ An Alabama hamlet got the signal Wednesday that it had won a bidding war for German automaker Mercedes-Benz's first U.S. assembly plant.

The expected cost to Mercedes for the 1,000-acre tract where the plant will be built: the equivalent of $100, when all the tax abatements and other incentives are included. That's not much more than the cost of replacing a pair of wiper blades on a Mercedes sedan.

Mercedes said it would announce the site of the $300 million factory today in Tuscaloosa, 20 miles west of Vance in northwestern Alabama. Developers offered a 1,000-acre tract in Vance for the project; Mercedes has said the announcement would be made near the factory site.

Germany's biggest auto company, which has found it increasingly expensive to make cars at home, also considered sites in the Carolinas and several other states.

The plant will employ 1,500 and is expected to create another 11,500 jobs through related industries. Vance's population is 250.

The Mercedes plant, to be located on what is now forest and pasture land sprinkled with homes and fish ponds, is expected to produce about 60,000 sport-utility vehicles annually beginning in 1997.

Foreign automakers see investing in U.S. plants as a way to move their products closer to the enormous American market. Mercedes has said a U.S. plant would offer lower labor costs than Germany and allow it to skirt a 25 percent tariff on imported trucks.

Alabama, meanwhile, has long sought a marquee industry to bolster its economic base. But Gov. Jim Folsom, who aggressively wooed Mercedes, hesitated to proclaim victory. His office issued a statement saying only that Folsom was pleased the factory site would be announced in Tuscaloosa.

Residents of Vance, site of a Civil War battle in 1865, had mixed feelings about what is on the horizon for their community.

Lifelong resident Jerry Reach, 51, who raises timber and ponies, lamented that life in Vance won't be peaceful anymore. "When somebody offers me enough money, I'm going to leave. It just won't be home anymore," he said.

Vance is in Tuscaloosa County, which joined the city of Tuscaloosa in committing up to $30 million for land acquisition and site preparation. Nearby Birmingham and Jefferson County promised another $5 million to develop the Vance site.

At the governor's urging, state lawmakers this summer also approved a bill that would let Mercedes use money normally paid in state income taxes to cover construction debts. The company may use 5 percent of its payroll for debt service, and workers get a state income tax deduction in return.

James Albright, president of the Alabama AFL-CIO, expressed reservations about letting a company take money from workers to pay off corporate debts. He predicted that the provision could become a factor in determining whether the plant's workers eventually try to unionize.

by CNB