Kia’s Got Georgia on Its Mind
“Kia Motors has entered an aggressive growth phase in the U.S and the decision by KMC to build a manufacturing facility in West Point, Troup County, Georgia is the latest example of the company’s commitment to the marketplace,” said Euisun Chung, President and CEO, Kia Motors Corporation. “Kia has made tremendous investments in design and engineering to better meet the needs and desires of American consumers, and this new plant will produce high quality, well-styled vehicles with the safety features and affordability that customers expect from Kia.”
The West Point manufacturing facility, to be built on 2,200 acres, will have the capability of building up to 300,000 vehicles per annum once production begins in 2009, and create about 2,500 local jobs. Additionally, between five and six suppliers are expected to set up operations around the plant in Troup County, resulting in another 2,000 jobs.
Truly, the reality Georgia is facing, losing up to 5,100 jobs from two members of the Big 3, only to gain what looks to eventually become a similar number back from an imported brand and its associated suppliers, reflects on the entire industry. Yes, despite the doom and gloom in Detroit, the new vehicle market is stronger than ever, and is expected to grow further in upcoming years. The growth, however, is driven by brands such as Kia and its sibling-nameplate Hyundai, as well as rival imports Toyota, Honda, Nissan, Mazda, and the list goes on. Only Mitsubishi has seen its sales slide in recent years, although it looks to be making a slow and steady comeback. On the other hand, only Chrysler Group, now owned by German automaker DaimlerChrysler, previously Daimler-Benz, parent company to Mercedes-Benz, is profitable amongst domestic automakers.
Kia, specifically, has enjoyed amazing success since coming to the American market 12 years ago (7 years ago in Canada), when it sold only a single model, the compact Sephia sedan, later joined by the first-generation Sportage compact SUV. Now, after 12 years of consecutive sales records, capped off with 275,871 vehicles sold in 2005, it has expanded to a full product line of vehicles. February 2006 sales were record-level again, up some 3.2 percent compared to February of last year. Kia expects its North American sales, in both the U.S. and Canada, to increase by 15 percent to 350,000 units in 2006, plus grow beyond this mark to 800,000 units by 2010. Ambitious? For sure. Probability? Likely.
Georgia, despite Kia’s announcement which buoyed spirits across the state, isn’t planning to achieve the same level of growth that its newest corporate partner should enjoy in coming years, but it would be nice for its employment rate to stay even with today’s numbers, which is currently benefiting, over the short term at least, from GM and Ford’s presence. This in mind, will Kia’s decision to invest $1.2 billion USD in West Point cause rival import brands to overlook other states and Canadian provinces and choose Georgia when setting up new manufacturing plants, thereby potentially offsetting every job lost from the closure of the two GM and Ford plants? For Georgia to think this, as its leading newspaper has suggested, seems a bit naïve, or at the very least, a little too “blue sky”. There were no doubt many reasons why Kia chose West Point, Georgia over other reported front-runners, such as Lauderdale County, Mississippi; Chattanooga, Tennessee; Aiken, South Carolina; Hopkinsville, Kentucky and Decatur, Alabama.
Those jurisdictions, however, are now lamenting what would never become reality, at least with Kia, and therefore weren’t celebrating the news being announced from Seoul, delivered by KMC President and CEO Euisun Chung and Georgia Governor Sonny Perdue. No doubt the fight between states, and Ontario, to maintain current levels of auto sector employment and possibly even grow the segment, will continue. A civil war in the making? At least the South, on the whole, can take some confidence in knowing that the Rebs won one over on the Northern Yanks.
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