Hyundai Banking on Montgomery

Aerial view of the Montgomery plant
Aerial view of the Montgomery plant
The next generation Hyundai Sonata
The next generation Hyundai Sonata

The grand opening of Montgomery's 2-million square-foot Hyundai plant is four months away, but WSFA 12 News got a sneak peak at what it will look like. Company officials say the plant in Assan, South Korea is the closest thing to the Montgomery plant.

"Our Assan plant is our showcase plant. It's our newest facility," said Global Public Relations Manager Oles Roman Gadacz.

Inside, almost every job is performed by robots. That's something workers in Montgomery will have to get used to since the Alabama plant is expected to be even more automated.

Hyundai is opening up shop in Montgomery to be closer to American customers, the company's number-one priority. In Korea, the company already has more than 70% of the car market cornered. But in the U.S., only 430,000 Hyundais are purchased each year. With the Montgomery plant, the goal is one million.

"The Montgomery plant can really be our stepping stone to grow in the U.S. Market," said company spokesman Jake Jang.

But Montgomery isn't the first North American city to get a plant like Assan. Hyundai tried first in Canada back in the early 1990's. But that plant failed. It's a mistake Hyundai officials say they won't make again.

"Looking back on that experience, we learned a lot," said Gadacz. "The Canadian investment was premature. We felt that it was the wrong product. The Sonata was too early for the North American market, where we had built our volumes on the Excel, an entry-level car."

The Canadian plant manufactured Sonatas, the same car Montgomery will produce. And like Alabama, Canada offered Hyundai lucrative financial incentives.

Montgomery leaders say they knew about the problems in Canada - 800 jobs lost and a million square-foot facility left empty - but the chamber of commerce is confident the same problems won't happen here.

"The agreements we have with Hyundai have certain claw back provisions, which say that certain thresholds have to be met in terms of job creation and their payrolls and other kinds of things," explained the Chamber's Rick George.

If Hyundai does not meet those thresholds, George says the company would have to pay most of the incentive money back to the government. But he doesn't expect that will happen. And neither do Hyundai officials.

Spokesman Jake Jang said, "the products coming out of the Alabama plant will be the best products in the states."

The Montgomery plant will produce the next-generation Hyundai Sonata beginning in March of 2005 (see photo above). Production of a new model of the Santa Fe SUV will begin about a year later.

Reporter: Mark Bullock