Only weeks after Folsom assumed the office, state officials were approached by Mercedes-Benz about the possibility of locating its first manufacturing plant outside its native Germany in Alabama. Over the following months, Folsom led Alabama's efforts to recruit the facility, culminating in an October 1993 announcement that Alabama had beaten 30 other states for the coveted facility. The prestige of the Mercedes plant opened the door for future automotive plants to locate in the state. Within six days after taking office Governor Folsom ordered the removal of the Confederate flag from the state capitol to a memorial. His de facto Chief of Staff was his longtime friend and confidant, Charlie Waldrep, an attorney at Waldrep, Stewart & Kendrick, LLC. Governor Folsom also appointed a number of African Americans and women to his staff. In 1994, he ran for a full four-year term in his own right. Although some regarded Folsom as a popular governor, three candidates challenged him in the Democratic primary, the most serious being Paul Hubbert, the executive secretary of the Alabama Education Association and nominee for governor in 1990. Folsom after a fierce and sometimes nasty primary, fended off Hubbert's challenge with 54% of the vote. But Hubbert's primary challenge damaged Folsom, who in the General Election, was narrowly defeated by former Democratic Governor Fob James, who was running as a Republican. Even though 1994 was a tough year for Democrats and that Folsom was facing a popular former governor in James and had spent a lot of money to win his primary against Hubbert, the result was narrow. In fact, Folsom lost by less than 10,000 votes or 49.7%-50.3% to James. Compared to other prominent Democratic incumbent Governors who lost that year such as Ann Richards in Texas, Bruce King in New Mexico, and Mario Cuomo in New York, Folsom ran much more strongly than they did. He also ran stronger than Democratic nominees in other Southern states with governor's races, such as Phil Bredesen in Tennessee (who eventually was elected there in 2002), Jack Mildren in Oklahoma, and Nick Theodore in South Carolina. Post-governorship and return to politics In 2006, Folsom reentered state politics, running again as the Democratic nominee for lieutenant governor. He won the Democratic nomination unopposed, and in the general election, he narrowly defeated Republican lawyer Luther Strange for a third, nonconsecutive four-year term. Folsom is the longest-serving lieutenant governor in Alabama