May 30, 2017 / 6:46 PM / 4 months ago

Daimler aims to expand supplier base in Alabama

The Daimler AG sign with raindrops is pictured before the company's annual news conference in Stuttgart, Germany, February 4, 2016. REUTERS/Michaela Rehle/File Photo

FRANKFURT (Reuters) - Daimler’s (DAIGn.DE) Mercedes-Benz “sees value” in having more suppliers in the U.S. state of Alabama, where it has a factory in Tuscaloosa, the group said on Tuesday.

Daimler said having more local suppliers increased overall flexibility, reduced transport times and improved manufacturing and logistics costs.

“Overall, this results in considerably increased efficiency,” the company said in a statement.

Two years ago the company had unveiled plans to invest another $1.3 billion to expand sport utility vehicle (SUV) production at the Tuscaloosa Mercedes-Benz factory.

Sign shows to Daimler AG headquarter near Mercedes museum in Stuttgart, Germany, January 31, 2017. REUTERS/Michaela Rehle

“These are exciting times for our Alabama facility as we prepare to take on this new challenge to build the next generation of SUVs,” Jason Hoff, President and CEO of Mercedes-Benz US International, said in a statement that followed discussions with selected suppliers last week.

Daimler’s comments come after renewed focus on Germany’s trade surplus with the United States.

On Tuesday, U.S. President Donald Trump took to Twitter to attack Germany partly for its trade policies, flagging the United States’ “massive trade deficit with Germany.”

Both Daimler’s Mercedes-Benz and BMW (BMWG.DE) have factories in the United States where they build higher-margin sports utility vehicles (SUVs) for export to Asia and Europe.

Trump in January had warned German car companies he would impose a border tax of 35 percent on vehicles imported to the U.S. market, a plan that drew sharp rebukes from Berlin and hit the automakers’ shares.

Reporting by Christoph Steitz. Editing by Jane Merriman

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