A representative for auto supplier Bridgewater Interiors said during the Oxford City Council’s work session Tuesday that the Oxford company would expand its facility and create 87 jobs. The company announced in December that it might expand its facility but had not finalized the plan.
“The project is moving forward,” said Farrah Woodley, plant controller for Bridgewater Interiors. “We’ve started the selection process for bids for the building construction.”
Woodley attended the meeting Tuesday to see the council approve an amendment to a tax abatement for Hoover Universal Inc., which is in a joint venture with Bridgewater Interiors and will provide equipment for the expanded facility. The tax abatement, passed in December, needed amending because it stated the expansion project would cost approximately $4.2 million. The company has since learned, due to a miscalculation on equipment costs, that the expansion will cost about $5.5 million.
Woodley said work on the expansion project would begin in early April. She added that Bridgewater would begin hiring 60 employees in June and then hire another 27 in 2013.
Bridgewater Interiors, which manufactures seats for the Pilot SUV produced at the Honda automotive plant in Lincoln, opened in 2003 and currently employs more than 250 people. The expansion is under consideration as a direct result of Honda’s expansion plans announced last year. The Japanese-based automaker announced it would invest a total of $191 million in its Lincoln plant to expand annual output, improve manufacturing flexibility and transfer production of the Acura MDX luxury SUV from a Canadian facility. Honda’s expansion is under way and is expected to be complete in 2013.
Bridgewater’s expansion will allow it to produce seats for the Acura MDX.
“I’m proud to do this and proud to ask the council to do this because this will help the community,” Mayor Leon Smith said of the tax abatement amendment.
Under the approved abatements, Bridgewater Interiors and Hoover Universal would be exempt from paying for 10 years all state and local non-educational ad valorem taxes, all mortgage and recording taxes and all construction-related transaction taxes, except those levied for educational purposes.
Smith said he was also glad Oxford had strong companies that could thrive during the recession.
“I’m thankful we still have people in this community that can expand and want to expand,” Smith said.
Alabama auto manufacturers such as Honda and suppliers like Bridgewater Interiors are doing better than they were during the recession that hit in 2007 and 2008 . However, to some economists, it will take more than just improvements in the auto industry to get the state’s economy back to pre-recession levels.
“Auto manufacturing is going to create jobs, but it’s not going to create that many jobs,” said Keivan Deravi, economist at Auburn University Montgomery. “The auto industry did not really lose that many jobs when the recession began … they just slowed down production.”
He said real growth for the state’s economy would instead need to come from the service and construction industries.
“Manufacturing is just really very small compared to those two sectors,” Deravi said.
According to the Alabama Department of Industrial Relations, there are about 25,000 people employed in auto manufacturing in the state. In contrast, about 1.5 million people are employed in the all service industries in Alabama.
“We need a cluster of industries called services to get us out of the recession in a clear sense,” Deravi said.
James Cover, economist at the University of Alabama, agreed that improvement in a variety of industries would be needed to get the state’s economy healthy again.
“Primarily we need growth a little bit everywhere,” Cover said.
However, he disagreed that the service industry would do the trick, arguing that manufacturing overall would jumpstart the economy. He said manufacturing jobs tend to pay better than service jobs.
“When people have low incomes, they are limited to the services they purchase,” Cover said. “But when these manufacturing jobs grow and their income is higher, they will purchase more durable goods, which will be more profitable for everyone.”
In other business, the council approved a $37,485 expenditure to support the radio system for the police and fire departments. The police and fire departments had previously received funding for their radio system through the federal Chemical Stockpile Emergency Preparedness program. The federal government is no longer funding the program since all the chemical weapons have been incinerated at the Anniston Army Depot.
The council also approved a $548 expenditure for the upkeep of a weather siren in Talladega until Sept. 30. The upkeep of the tower was also previously funded by the Chemical Stockpile Emergency Preparedness program.
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star