Alabama said to gain from Georgia plant
Official says Kia factory will bring jobs here, too
Tuesday, March 14, 2006
Kia Motors' decision to build a plant in West Point, Ga., will mean more automotive jobs for Alabama as well, according to a state economic development official.
Kia Motors, a South Korean automaker with 12 straight years of U.S. sales gains, selected Georgia for its first North American factory while aiming to double sales in the region by 2010. The $1.2 billion plant will open in 2009, Kia said in a statement Monday. The site is about 100 miles east of affiliate Hyundai Motor's auto assembly plant in Montgomery.
It was reported in December that a site in Decatur was under consideration for the Kia plant. But officials later said that Kia didn't want to locate in the same state as Hyundai to avoid brand confusion. Hyundai Motor owns a 38.7 percent stake in Kia.
Gov. Bob Riley said at a news conference Monday that it had been apparent from his talks with Kia officials for about a year that the Kia plant would not locate in Alabama.
"We worked to make sure it would be as close to Alabama as it could possibly be," Riley said.
State officials said the plant's location is still good news for Alabama.
"It's an unbelievable win for us,'' said Neal Wade, director of the Alabama Development Office, adding that the plant is one mile from the Alabama state line.
"Eight months ago, we told the president of Kia that if Alabama didn't fit their business model, we wanted them next door. For business reasons, they wanted to locate in an adjacent state, not Alabama.''
Kia didn't identify which models will be produced in the U.S. The Georgia factory is intended to produce as many as 300,000 vehicles a year, and employ 2,500 people, according to the statement. As many as six suppliers will set up operations in the surrounding area in Troup County, resulting in an additional 2,000 jobs.
Wade said as many as 800 Alabamians could work directly at the plant. "That's a large number right there of people earning better checks than they have today," Wade said. "And some current Hyundai suppliers could double in their number of employees because of Kia work."
Forty-one Hyundai suppliers came to Alabama after the automaker announced its plans to build a plant in Montgomery. "We're going to be very aggressive in going after Kia suppliers," Wade said. He said that Alabama will hold a business seminar in Seoul next month.
Hyundai and Kia, the No. 1 and 2 automakers in South Korea, are following their Japanese rivals in building U.S. factories as General Motors and Ford Motor, the biggest U.S. manufacturers, lose market share and cut production. Hyundai opened its first U.S. plant, in Alabama, last year. Honda has a plant in Lincoln; Toyota has an engine plant in Huntsville.
"The more concentration of automakers we get in the Southeast, the more Alabama can be competitive for suppliers, research and development or even another assembly plant," Wade said. "We want the whole region to become the automotive center of the U.S."
Kia's plant "will be close to Hyundai's Alabama assembly line so they can share costs and maintain a close cooperative operation," said Chung Doo Sun, who helps manage the equivalent of $700 million in won at Hyundai Wise Asset Management Co. in Seoul.
U.S. sales have increased for Kia every year since it entered the market in 1993. The company sold 275,851 vehicles last year, up 2.1 percent from 2004. Kia expects its sales in North America to gain 15 percent to 350,000 this year and expand to 800,000 by 2010, the statement said.
The Bloomberg News and the Associated Press contributed to this report.
© 2006 The Huntsville Times
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