The announcement followed the Cullman City Council's approval on Monday, June 5, to offer the distribution center a 10-year tax abatement for the upgrades. Mayor Woody Jacobs said the multi-million dollar investment would be largest in the city's history.
"They [Walmart] were one of the first industries to move into that industrial park on the south end of town and they've been a part of Cullman for over 40 years. This will be a $350 million dollar investment and that will be the single largest capital investment in the city of Cullman ever," Jacobs said.
While the abatement will result in the city foregoing any additional tax revenue the project would otherwise generate, $20 million is estimated to be paid in the form of educational taxes over the course of the 10-year timeframe according to Jacobs.
According to a press release sent to The Times by Walmart, the project is a part of the company's plan to update every one of its 42 regional distribution centers across the country.
On its corporate website, Walmart said it began seeking ways to reduce the amount of "strenuous and time consuming labor" needed to operate the distribution centers in 2017 when it began testing warehouse automation equipment from Symbotic in it's Brooksville, Fla. facility.
Currently employees are required to manually sort and store products within the distribution center's warehouse as well as packing each 53-foot trailer by hand when those products leave the site. Walmart said the new system will use a combination of people, robotics and massive storage systems to increase the speed and accuracy of daily operations as well as the buildings overall capacity. Walmart estimates this will allow for roughly twice the amount of cases able to be processed compared to a traditional facility.
"Adding robotics, automation, and AI-powered software systems to this facility will revolutionize an already impressive operation, fundamentally changing the way we distribute products to stores," Ken Caviness, general manager of the Cullman distribution center, said in the release. "This isn't just an investment in our facility, but also in our associates, our community and our future."
In 2021, Walmart announced plans to update 25 distribution centers, but expanded that commitment to include all 42 facilities last year. Cullman Economic Development Director Dale Greer said the local facility — built in 1983 — is the oldest distribution center continuing to operate as designed.
"A lot of other facilities the same age as ours have been scaled down. I just think this just lets us keep them here for the foreseeable future and it's a great deal for this community," Greer said.
Walmart has been ranked among the top employers in Cullman County since it opened — the facility currently employs roughly 1,300 people — and Greer said one of the first questions he asked when discussions about automation began was how it could effect the local workforce. Greer said he had been informed by Caviness that the technology could eventually shift some manual labor jobs to technical jobs in repair and maintenance, but there would be no initial employment lost and he did not foresee any significant layoffs in the future.
"Most of this stuff is not actually replacing workers. Our unemployment rate [in Cullman] is just over 1.5% and the entire state is just over 2%, we've never seen numbers like those. So, their deal is that there aren't enough employees out there and automation is the only way to continue to operate. I think the biggest positive of automation is it uses better equipment so people have to have greater skills to operate those things. I think in the long run they earn more and it provides better opportunities," Greer said.
© 2023 The Cullman Times (Cullman, Ala.). Distributed by Tribune Content Agency, LLC.
