Daimler AG, the parent company of Mercedes-Benz, said it will invest up to 1.4 billion euros ($2 billion) to expand its plant in Alabama and build a new model there.
The group's Mercedes-Benz factory in Vance near Tuscaloosa was the first built outside Germany, in 1995, and employs 2,800 workers who turned out more than 125,000 sports-utility vehicles and R-class crossover models last year.
From 2014, Daimler plans to build a new generation of its C-class sedans designed specifically for the U.S. market at the Alabama factory.
Daimler Chairman Dieter Zetsche told the Tuscaloosa News that the $2 billion will go toward the expansion of the M-class, GL-class and C-class vehicle lines.
"The amount is one of the largest single manufacturing investments in the state's history, and it will equal Mercedes' current $2 billion investment at the Vance plant, which was made over the past 17 years," wrote Patrick Rupinski of the Tuscaloosa News.
The Stuttgart-based automaker has given more than $1 million to charities in the southern U.S. state to help in the aftermath of deadly tornadoes that struck the area in April, it said.
Copyright Agence France-Presse, 2011
IndustryWeek senior editor Josh Cable contributed to this story.