Two big decisions from large corporations this month offer lessons for Alabama and its dreams of expanding our economy.
In the first, Alabama is already the big winner. The Huntsville area will be the site of a $1.6-billion Toyota-Mazda auto-manufacturing facility. The announcement came earlier this month.
The plant’s placement will deliver an estimated 4,000 jobs to the region. When that happens, the $900 million incentives plan offered by the state and local governments will be well worth it.
We can’t ignore that cooperation among local governments across three counties — Madison, Limestone and Morgan — appears to have been a difference-maker, as well. “We worked together as a metropolitan community to attract business and I think that is something that very few communities can offer. So it sends a very clear message to those companies, that we’re open to business, that we’re willing to do business, and that we’re going to do it right,” Huntsville City Councilwoman Jennie Robinson told a local TV station.
For his part, Toyota’s North America CEO Jim Lentz, speaking to a reporter from the Dallas Morning News last week, said that a lucrative incentives package alone didn’t swing the deal to north Alabama. “We don’t move a plant to the highest bidder,” he said.
That noted, Lentz indicated that a non-incentives proposal is likely a deal-killer. “When I go to the board and I say, ‘Here are the three leading candidates, Candidate A is going to have $100 million in incentives, Candidate B is going to do $200 million in incentives and Candidate C is zero, and we’re picking Candidate C,” Lentz said. “It’s a tough conversation.”
Meanwhile, Amazon reduced to 20 the number of cities competing to become the home of the online giant’s second headquarters, aka HQ2. No Alabama city is among the finalists. Atlanta, Raleigh, N.C., and Nashville were among the 20 remaining contenders to become home to a facility that is expected to employ 50,000 high-tech workers.
As part of its search process, Amazon asked cities to supply information about each community’s business climate, crime rate, infrastructure and other quality of life features. “We want to invest in a community where our employees will enjoy living, recreational opportunities, educational opportunities, and an overall high quality of life,” Amazon’s call for applicants reads.
The company expects financial incentives, as well, but an eye-popping dollar sign alone isn’t going to be enough to put HQ2 in your town.
We see two takeaways in these developments. The first is a unified community leadership that is prepared to put aside the small differences in favor of doing big things is required. The Huntsville community is leading by example on that front, and other Alabama cities must follow suit in order to compete.
The second lesson is that quality of life counts. Incentives matter, but they will mean little if a city lacks strong public schools, a thriving cultural life or a well-educated workforce.
As we see it, this process starts with a top-notch public education system, society’s “great equalizer,” as former U.S. secretary of education Arne Duncan famously put it. We challenge the state to invest serious dollars in improving our schools.