The $350 Million Mile

National Steel Car, a rail car firm based in Ontario, announced today that they (along with the National Alabama Corporation) will be investing $350 million into building a Northern Alabama manufacturing plant. The company plans to employ 1,800 workers and manufacture up to 10,000 freight cars a year. The 2 million-square-foot (1 mile long!!!) facility, located in the Shoals area of Alabama, is scheduled to open in 2009.

Alabama, which has been notoriously successful in luring automotive manufactures and suppliers to the state, had pursued the rail company. In June, the state passed an amendment increasing its borrowing power from $350 million to $750 million to finance incentives packages for companies like National Steel Car. Economic developers in Alabama purchased extra land, and plan to build around 5 miles of rail track to link to the Norfolk Southern Line, as well as highway, sewage, and power upgrades.

National Steel Car, which is the leading North American rail-car supplier, had been searching for a Southern U.S. location for two years. After visiting 150 sites in 12 states, company executives began negotiating with Alabama officials in September 2006. The plant is expected to make an enormous impact in Colbert and Lauderdale counties, which has a combined population of 145,000 residents.

Sources: The Times Daily, Press Release

Fueling Lockheed's Fire

On Saturday, the Decatur Daily of Alabama reported that a railroad spur connecting a main line to the Lockheed Martin Corporation's Courtland, AL facility would help allow the company to make future expansions.

The rail spur would extend over 6,000 feet of track from the Norfolk Southern Railroad to Lockheed's Missile Transfer Facility. The facility assembles and tests missiles.

In December, Lockheed, the largest military contractor, began construction of a $27.62 million expansion in Courtland, and is rumored to be preparing for another expansion in 2009.

This expansion is to support the U.S. Department of Defense Agency's Targets and Countermeasures program--to assemble and test missiles. They were awarded the contract, which was and is expected to pay the company $4.6 billion in government funding over 10 years, in December 2003.

Although the US Defense budget is expected to rise only 14.3% over the next four years, this does not include special supplementary budgets for the wars in Iraq, Afghanistan, and the war on terrorism. The five divisions of Lockheed Martin are Aeronautics (they produce the F-16, F-22, and F-35 fighter jets), Electronic Systems (missiles), Satellites, Integrated Systems for communication, and IT Systems. All of these divisions will benefit from the continuation of the wars.

Critics of companies like Lockheed Martin, Boeing, and Northrop Grumman, say that they are benefiting from war profiteering. Throughout this blog, I have also brought up expansions of companies making money, directly and indirectly, from world conflict (examples 1, 2, and 3).
The Pentagon's budget for 2007 is about $457 billion (with a proposed budget increase of 10% for 2008).

The expansion of the railroad in Alabama would be a tax on local government funding. The county is expected to pay for 3,240 feet of track, at a total estimated cost of $968,850. Supporters of the expansion hope that such an allowance from the government would spur economic development in the region.

The U.S. Army is expected to buy 80-100 Terminal High Altitude Area Defense (THAAD) launchers and aover 1,400 THAAD missiles. The Defense Industry Daily reported that Lockheed Martin began production this year.

Sources: 24/7 Wall Street, The Decatur Daily, Space News, The Middle East Online, Defense Industry Daily, Military and Aerospace Electronics, Lockheed Martin