TUSCALOOSA, Ala. — Mercedes announced Friday that it will start building a fifth model, the ML Coupe, at its Alabama plant next year.
Dieter Zetsche, the chairman of Mercedes parent Daimler AG, said in a visit to the Tuscaloosa plant that the company's five-year, $2.4 billion expansion plan reflects growing popularity of SUVs worldwide.
While some vehicles like station wagons or vans are popular in some regions but not others, "the SUV is the common denominator around the globe (that) every market tends to go for," Zetsche said.
Zetsche also used his U.S. visit to urge negotiators to conclude a free trade agreement between the United States and Europe. He said harmonizing safety and equipment standards would significantly cut down on design costs.
"Even small differences in safety regulations result in huge extra costs," he said. "We do research twice, we develop twice, we tool, procure and certify twice."
Zetsche said the failure to come to an agreement hurts both economies.
"We are just shooting ourselves in the knees on both sides of the Atlantic if we would not go for that," he said.
The Alabama plant this summer began producing Mercedes' bestselling C-Class — making Mercedes the first German automaker to assemble a luxury Sedan in the United Sates.
The company also plans updates to ML and GL SUVs next year alongside the new model, which was introduced at auto shows earlier this year as the Concept Coupe SUV.
The company is adding 1,400 full-time positions at the plant in connection with the production of the C-Class and the new SUV. The plant, which opened in 1997, employs about 3,400 workers, though company officials declined to break down how many of those are temporary or outsourced workers.
The company calls its non-staff employees its "contingent work force," said Jason Hoff, the head of the Tuscaloosa plant.
"We went through a very difficult time in the financial crisis that we don't want to repeat again, so there is a certain amount of flexibility we want to maintain," Hoff said. "When demand requires, we'll add more permanent employees to our rolls."
Zetsche said the Tuscaloosa plant will increase production by about 60,000 to reach an annual capacity of 300,000 vehicles next year. The plant is Mercedes' third largest in the world after German factories in Sindelfingen and Bremen.
The U.S. is Mercedes' biggest market, with 312,534 vehicles sold in 2013. By next year, the Tuscaloosa plant is expected to produce one out of every two Mercedes sold in the U.S.
Republican Gov. Robert Bentley said Mercedes played a key role in making Alabama attractive to automotive and other investment that followed, calling its product "the greatest automobile in the world."
"I don't say that when I'm at Honda or Hyundai," he said. "But I can say it when I'm here because if it were not for Mercedes, we would not have been able to recruit Airbus and all the other high-tech industries we have in this state."