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Trying for Kia....

Officials plan on push for Kia plant

By Deborah Willoughby and Sebastian Kitchen
Montgomery Advertiser

Long-simmering rumors about expansion at Montgomery's Hyundai plant came to a full boil Monday with a report that Mississippi is trying to land a Kia manufacturing plant.

The Korea Times reported Monday that Hyundai-Kia Automotive Group said it may build another automobile manufacturing plant in the United States and that Mississippi is emerging as a key contender for the site.

The Korea Times story said research for locating the plant is under way.

Hyundai, which has a controlling stake in Kia, opened a $1 billion manufacturing plant in Montgomery in May. Rumors of expansion on the 1,744-acre site have abounded for months.

Mike Chung, a market analyst with the automotive Web site Edmunds.com, said that although Kia has its own leadership structure, Hyundai deeply is involved in its decision-making.

Chung's take on the news that Mississippi is in the running for a Kia plant is that it would be much more logical for Kia to build its cars in Alabama, a point Montgomery Mayor Bobby Bright echoes.

Bright said he wants Kia officials to know that Montgomery is willing to offer an incentive package to attract another automotive plant to the city.

"I don't want them to look and decide on Mississippi without giving us here in Montgomery an opportunity to discuss it," Bright said. "I'll do everything I can to make it happen. We need those good jobs here in Alabama."

Montgomery's edge is that Hyundai already is here, Chung said.

"A lot of it is a logistics issue. It's a matter of building vehicles across platforms," Chung said. "By sharing components, you get economies of scale and much more efficiency. I would see it as an extension of the current plant. I don't see them spending the capital to create a completely new plant."

Chung said the automotive parts suppliers that are working with Hyundai are another draw for Kia.

"Alabama should have a foothold in Hyundai and Kia in the years to come," he said.

Chung said Hyundai and Kia already have joint ventures in this country, including a proving ground in California and a research and development center in the Detroit area.

Several vehicles produced by Hyundai and Kia are built on the same platform.

"They are literally the same vehicle in terms of structure and mechanics," Chung said.

Few details emerged about what cities and states are doing to court Kia.

Mississippi Gov. Haley Barbour is on a trade mission to Asia, and a visit to Korean automakers was a logical part of the trip, officials said.

Scott Hamilton, director of communications for the Mississippi Development Authority, said, "The governor and MDA officials are meeting with a number of companies that have investments in Mississippi or which we believe have the prospect of making investments here. At this stage, we don't expect any immediate results, but we certainly are actively looking for all sorts of economic development opportunities."

In Alabama, most economic development officials did not offer any information about efforts to bring in a Kia plant.

"We don't discuss projects," said Neal Wade, director of the Alabama Development Office.

The Montgomery Area Chamber of Commerce and Gov. Bob Riley's office said much the same thing, explaining that they don't want to tip their hands to to competitors for any potential development.

"We never comment on projects in the works. Any project we're aware of, we go after hard," said Ellen McNair, vice president for corporate development with the Montgomery Area Chamber of Commerce.

Although Bright does not know anything specific, he said there is movement to talk to Kia officials.

"I am instructing our industrial recruitment folks to stay in contact with Kia officials and let them know we would be serious about discussing them coming to Montgomery, Alabama," he said.

Bright said the city is willing to offer a similar package to the deal with Hyundai. The total incentive for Hyundai, which included contributions from local and state government and private entities, totaled more than $250 million.