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Alabama's immigration law could slow foreign business

A Hundai rolls off the assembly line at their plant in Montgomery, Alabama. The state's immigration law could hurt business.

Tess Vigeland: Mercedes, Hyundai and Honda have something in common -- and it's not under the hood. They've each set up shop in Alabama. The state has benefitted from their presence to the tune of roughly $5 billion a year in economic growth.

But Alabama's tough immigration law is bringing new scrutiny to the state's friendliness to foreigners. Gigi Douban reports from Birmingham.


Gigi Douban: Let's say you're a multinational car manufacturer. You want to expand somewhere, but first there are some questions.

Bill Taylor: You're always looking at infrastructure, what types of sites you have available, presence of a university, very motivated work force, very capable workforce.

That's Bill Taylor, president of Alabama's Economic Development Partnership. He's also former CEO of Mercedes Benz in Alabama. Taylor says big companies need assurances before starting up business somewhere.

Taylor: And getting that corporation to understand that it's OK to come here, it's a good place to come.

In Alabama, companies might not be so sure right now. First police here arrested a Mercedes executive visiting from Germany, then a week later a Honda worker from Japan. Both in their cars, both here on business. Alabama's new immigration law, considered the toughest in the nation, says that if police so much as suspect a person is in this country illegally, that person needs to prove otherwise, with documents. And if he or she can't produce documentation, police must detain that person.

Both the Honda and the Mercedes employees were eventually released and the charges dropped. But the incidents stung the state's foreign automakers.

Here at Hyundai in Montgomery, Ala., Sonatas and Elantras roll off the line at a rate of about one per minute. Hyundai opened its Alabama plant in 2005, bringing 2,500 jobs, plus thousands of supplier jobs to the state. After the Honda and Mercedes arrests, the company looked at its protocol for Korean visitors.

Robert Burns is public relations manager for Hyundai in Alabama.

Robert Burns: We wanted to be certain because yes this law was enacted, our legal department went through that law and said, "OK, is there anything that's come through this process that would require us to change our existing detailed process?" And again the answer was no.

But a little reminder couldn't hurt.

Burns: We'd just remind our Korean counterparts, just keep your driver's licenses on you or any other documentation, and you'll be just fine. And that's certainly the case.

Mercedes declined to answer questions for this story. Honda issued a statement essentially saying "Yes, one of our employees was charged in violation of Alabama's immigration law, and the charges were dropped." But a cloud still hangs over the state.

Lori Tansey Martens is president of the International Business Ethics Institute.

Lori Tansey Martens: Given past history, you know there's this stereotype of the South, and again a lot of times it's a very unfair stareotype of the South. It's based on history, but it's there.

She says with competition for foreign business being tight, a state like Alabama can't afford any more dings in its reputation.

Martens: So a case like this happening in Alabama is probably a greater risk, than it is say if it was in Ohio or Indiana.

Officials in Alabama like Taylor of the Economic Development Partnership are more aware of this than anyone. So when foreigners are uncomfortable here, it could put Alabama at a huge disadvantage.

Taylor: So that's maybe a process of taking the blinders off. And if we're going to compete, we'd better understand the whole picture.

Taylor says in this global economy, a slip-up like this could drive away future business.

Taylor: With as many international companies as we have in this state, everything we do is transmitted to all those different countries. It's that transparent. Every action we take.

And let's not forget, he says, automakers are the crown jewels of economic development.

In Birmingham, I'm Gigi Douban for Marketplace.

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Okay granted the German citizen did not have his license. What about the Japanese executive who not only had his passport but his international drivers license? Wow. Now I see that a school district is going to have to hire a part timer to do some of the paperwork? I have an idea. Pass a tax from the state house to reimburse any and all costs that are coming down from the state to fund it. While we are at it. Any one from PETA onto that article about pets from illegals aliens having to be put down? Wow talk about unintended consequences. Oh, and good luck getting your spring planting done over there. I would suggest all you pro HB-56'ers volunteer at least a 10 hour day during the planting season to help your farmers our.

And last but not least, we in California would welcome Mercedes or Hyundi to relocate to California including the Chinese company that is having second thoughts about locating in the great state of Alabama, that is if Missouri doesn't get them to come there first. We have great ports up and down the California coast. Talk to our governor of California and the state lawmakers. Take a tour on some of the best land our state has to offer you. The bonus? We don't have a State Immigration Law to worry about. All we ask is do you have a good corporation and jobs for our skilled Californians to do.

SHAME ON YOU MARKETPLACE - You did nothing more than reiterate the stereotypes of Alabama, portraying it as the Alabama of 1960. IF you had BOTHERED to do your research, you would have found that the Mercedes-Benz executive's rental car did not have a tag, which was why he was pulled over - there was no racial profiling going on. Also, the man only had a German identification card, NOT his driver's license, so he was arrested and taken to police headquarters. It would be a safe assumption that if I was driving without a license in Germany, I would also be arrested. Did you even travel to Alabama to research any part of your story? Feel free to look beyond your prejudices and travel to Alabama to see the state as it is in 2012.

Jan 6, 2011

Taylor is full of it...the people of Alabama are the nucleas of our economy, not aotomotive mfgg.
The last thing on Fred Dentons and Guy Hunts mind for getting Mercedes was Immigration, and vise versa...when I asked them both how Mercedes was going to build cars in Alabama, since Alabama had zero tool and die makers to supply Mercedes parts...their face went blank. You see, Alabama is a follow, not a leader State...if it would have supported its people with skills like tool and die...we wouldn't had to beg and give Mercedes all that they/Taylor demanded...if you don't like the laws of Alabama...leave...now that we have the skills to replace you...BMW...the ultimate driving machine!!!
Charles Weinacker
Alabama Inventor
President
Tenn Tom Trade Towers,Inn

Well I have a suggestion for all the international corporations that are looking to locate in Alabama and are concerned about the states immigration law. Come to California and locate here. We do not have a State Immigration as does Alabama. What we do have are very good ports up and down the coast of California and we have plenty of land. Come talk to our governor and our state representatives. Go to some of our counties, Modoc, Merced, Fresno. We have an excellent highway system and rail. Don't worry about Alabama's immigration law. All we seek are corporations that have an idea and employment for our state.

I think the rule of law is much more valuable to foreign car manufacturers that having to ask visiting executives to carry proper identification. Story really sounds like a stretch to try to say that enforcing the law is bad for business.

This piece is a good argument for all states to adopt similar enforcement measures, which would not only force companies to be more responsible in their hiring practices, but also prevent them from playing one state off against the other in a competition to see who can outbid the other in deregulating labor and environmental laws. It has become a common, fly-by-night multinational business practice to obtain tax subsidies and favorable treatment to set up shop in a given state, then close down in a year and move on to the next sucker. Consider the Maquiladora—GM’s Mexican alternative to Detroit—why pay workers $4000 a month when you can get them for $400 a month; indeed, why pay them $400 a month when you can get them in China for $40 a month, which is what many Maquiladora manufacturers have since done, in a global race to the bottom? Furthermore, the fact that this piece, which casts a negative light on Alabama’s attempt to protect its labor, appears in a fairly conservative financial news network, underlines the fact that a pro-immigrant stand is truly a pro-business, anti-labor, largely conservative agenda.

This piece is a good argument for all states to adopt similar enforcement measures, which would not only force companies to be more responsible in their hiring practices, but also prevent them from playing one state off against the other in a competition to see who can outbid the other in deregulating labor and environmental laws. It has become a common, fly-by-night multinational business practice to obtain tax subsidies and favorable treatment to set up shop in a given state, then close down in a year and move on to the next sucker. Consider the Maquiladora—GM’s Mexican alternative to Detroit—why pay workers $4000 a month when you can get them for $400 a month; indeed, why pay them $400 a month when you can get them in China for $40 a month, which is what many Maquiladora manufacturers have since done, in a global race to the bottom? Furthermore, the fact that this piece, which casts a negative light on Alabama’s attempt to protect its labor, appears in a fairly conservative financial news network, underlines the fact that a pro-immigrant stand is truly a pro-business, anti-labor, largely conservative agenda.

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