TUSCALOOSA, Ala. (TheStreet) -- Michigan may be synonymous with auto manufacturing, but Alabama is nipping at its heels as carmakers continue to expand operations and add jobs in the southern United States.
The latest automaker adding jobs was also the first to build a plant in the state in the late 1990's. Tucked away in the hills of western Alabama is Tuscaloosa County, home to the only U.S. plant of Daimler's (DDAIY) Mercedes-Benz. The facility started production of SUVs in 1997.
Alabama Governor Robert Bentley said Mercedes' decision to build a plant has had a profound impact.
"It has changed Alabama from a low-tech manufacturing state to a high-tech manufacturing state and because of Mercedes, other companies have come and now we're one of the largest automobile producing states in the country," the governor said.
Over the years, Honda (HMC) and Hyundai have also opened plants in the state. Toyota (TM) opened an engine assembly plant. Countless auto suppliers have also built facilities in the state to be near the automakers.
Mercedes has expanded its plant five times since it opened. Jason Hoff, President and CEO of Mercedes-Benz U.S. International said, "They kind of use an industry standard of about seven jobs for every job at the OEM level. You can always use that as the first kind of indicator. If you take that we have approximately 3,400 people right now in fulltime jobs, that's a pretty significant number."
According to Economic Modeling Solutions, the overall auto manufacturing sector in Alabama is projected to grow 20% over the next five years. Honda currently employs 4,000 people, Hyundai employs 3,000 and Toyota employs 1,200. In 2013, Alabama automakers produced more than 918,000 cars and light-trucks.
While the auto industry is expected to continue to grow in Alabama, Gov. Bentley said Airbus (EADSY) most likely would not have chosen Alabama as its U.S. home had Mercedes not already been there.
"We've been able to recruit companies like Airbus and so many great companies like Boeing (BA) and Raytheon (RTN) and GE Aviation (GE) ," Gov. Bentley said. According to the Economic Development Partnership of Alabama, the aerospace industry now employs more than 12,500 people.
As for the automakers, Mercedes is adding 1,400 jobs as it ramps up production of its C-Class sedan and an as-yet unnamed SUV which will go into production in 2015.
--By Ruben Ramirez in New York