This year, Mazda and Toyota will start up their new joint-venture assembly plant in Huntsville, Ala., eventually employing 4,000 people to make 300,000 vehicles a year.
It represents a massive capital investment — $2.3 billion.
But constructing and tooling an auto factory is typically only part of the story. Mazda and Toyota’s project required some big public spending on local infrastructure. Brooks Kracke, CEO of the North Alabama Industrial Development Association, recently told Automotive News that, to make the plant possible, local and state government had to construct a new highway interchange, build bridges and widen roads to five lanes.
Critics sometimes assail such large public spending to attract industry, although it’s hard to understand why. You could make the argument that, in a more perfect world, long ago, maybe before America ever even heard the name “Toyota,” north Alabama should have invested all of that highway and bridge money simply to make itself a more attractive spot on the map. But really — what’s the difference?
An hour’s drive north of Huntsville lies Spring Hill, Tenn. General Motors is currently spending billions on its auto plant there. GM discovered Spring Hill back in the 1980s when it was a rural hamlet of 1,100 people with only one traffic light — which only flashed yellow. When the automaker decided to put shovels in the ground there for what was then the largest industrial investment in American history, it told the community that, among other things, it was going to have to build a new high school. Not because GM worker families simply wanted a fresh new school, but because (for heaven’s sake) a tidal wave of GM kids was about to swamp the community. Spring Hill today has a population of 39,000.
Infrastructure is a big word.
Last week, in a surprising moment of political agreement in Washington, the U.S. Senate overwhelmingly passed a bipartisan spending bill that would ignite investment in American industrial infrastructure, R&D and advanced technologies. If signed into law, the bill will direct $250 billion into things such as 5G infrastructure, microchip manufacturing capacity, advancements in logistics and new research to support industry’s needs in robotics, artificial intelligence, machine learning, high-performance computing and other advanced technologies.
Many media outlets are characterizing the plan as a competitive swipe at China. China has become a little “too” competitive, the thinking goes, so America needs some turbocharging. And this $250 billion will let the U.S. gun its engine, so to speak, and move ahead of its rival.
Maybe that’s true.
But more true is that those proposed funds are really about catching up — not “catching up” to China, but catching up to where the U.S. really should have been anyway.
Talk to anybody in the car business and they will tell you that change is coming. They can taste it. So much innovation is right there, just beyond the industry’s fingertips, waiting to be seized and exploited. Innovative minds are at work from Silicon Valley to Detroit to Wall Street creating new transportation solutions, and supply chains are wanting the new tools and materials and products to deliver it.
But to make all that happen, somebody needs to build a new bridge. Somebody needs to construct a new school. And that’s what’s being proposed. Somebody needs to create a big, new five-lane highway to get U.S. industry where it wants to go in a hurry.