Alabama’s first Tier 1 supplier for Volkswagen is opening this year in Gadsden and bringing more than 100 jobs with it, Mayor Sherman Guyton announced Tuesday morning.
Germany-based Fehrer Automotive has signed a long-term lease for the former Advance Auto Parts building and plans to have its grand opening this summer.
The company will be making automotive seat pads for Volkswagen’s new mid-size sedan, as well as for the Mercedes M- and GL-class vehicles, according to an official statement Guyton released before the press conference. The products will be shipped to Tuscaloosa and Chattanooga, Tenn.
Fehrer has approximately 3,000 employees in 22 locations worldwide.
When Mike McCain, executive director of the Gadsden-Etowah County Industrial Development Authority, learned Volkswagen of America would be opening a new manufacturing plant in nearby Chattanooga, he sought Fehrer.
“Mike knew they were coming to this area and got them on our radar, and we’ve been after them ever since we first heard about it,” Guyton said.
Although Fehrer officials looked at other locations in Alabama and nearby states, Gadsden’s evident commitment to industrial training was a strong attraction for the automotive supplier, said Gary Faulkner, senior project manager for the Alabama Development Office.
He cited the new Career Tech building at Gadsden City High School and the automotive technology building under construction at Gadsden State Community College.
Alabama’s standard industrial tax incentives, the nearby Interstate 59 corridor to Chattanooga and the existing facility also played a role in bringing Gadsden its newest corporate addition.
“We like to say a good work force and good community attracted them,” Faulkner said.
“Every good project selects a good community that meets the business’ interests.”
The ADO assisted in recruiting Fehrer by coordinating tax incentives with state agencies.
The Gadsden City Council authorized a commitment of non-educational tax incentives that helped the city make a competitive proposal to the company, Guyton said.
The incentives were the standard tax abatements allowed by state law, McCain said. The company will receive a one-time abatement on its sales and use taxes for its equipment purchases and a 10-year property tax abatement, McCain said. He emphasized the city is not spending any money on the project.
“It is giving up taxes it has never before received in order to generate new jobs and other new tax revenues,” he said, adding he did not have precise figures for the project’s economic impact.
“We put together a cost-benefit analysis only if there is going to be a cost,” McCain said.
The new supplier is an especial boon to the local and state economies in light of recent downturns in the automotive industry and national economy.
“Alabama has developed beyond the norm, in terms of job creation and capital investments,” Faulkner said. “We’re very proud of our automotive industry, and in particular of our foreign direct investment.”
By Katherine Poythress
Times Staff Writer