Mercedes-Benz is a multinational corporation (MNC) division of DaimlerChrysler AG (DCAG), which manufactures automobiles. It was established by Karl Benz and Paul Daimler on June 28, 1926. The head office of Mercedes-Benz is located in Stuttgart, Baden-Württemberg, Germany. With the slogan "Das Beste oder nichts" (English: "The best or nothing"), the company focuses on the production of luxury cars, buses, coaches and trucks. The United States of America (USA) is the largest foreign direct investment (FDI) country. with 1953 projects from foreign companies since 2002. As a result, the United States generates the largest flow of FDI. For example, an inflow of $13.90 million in investments facilitates the country. On the other hand, multinationals derive many advantages from the United States. The American South is aggressively offering incentives and packages to multinational corporations because economic growth is the southern government's top priority. Alabama is a state in the southeastern United States, with an estimated population of 4,833,722 in 2013. Mercedes-Benz US International (MBUSI) is the name of the Mercedes-Benz manufacturing plant located in the Tuscaloosa County, Vance, Alabama. The subsidiary was established in 1993. Not only Mercedes-Benz, but also Honda, Hyundai, Toyota and more than 300 companies have invested in the state. Instead of location and labor considerations, Mercedes-Benz's FDI flow decisions are affected by the difference in exchange rates and tax rates between the country of origin. origin and host country. In short, financial incentives and international opportunities abroad are the factors for establishing an MBUSI subsidiary. This article mainly analyzes the impact of FDI to Mercedes-Benz and the state of Alabama. Additionally, the author focuses on risk management and cost-benefit analysis of MBUS...... middle of paper ......Alabama. Alabama has proven to be a suitable location for many automobile manufacturers, particularly Mercedes-Benz. . The FDI maintains a mutualism in symbiosis with Alabama and Mercedes-Benz. Mercedes-Benz benefits from tax incentives, gains from non-union labor, logistics and aggressive state support. Alabama is a right-to-work state, while Germany is heavily unionized. On the other hand, Alabama enjoys economic growth, increased employment rates, better infrastructure, and a developed rural area. Exchange rate, interest rate, government policies and price fluctuation have created challenges and opportunities for Mercedes-Benz. Risks can be avoided by using derivative hedging instruments, such as futures contracts, interest rate swaps and currency options. The opportunity can be captured by continuing to improve on current standards, such as government policies and supplier risk management for better procurement..