Mayor reacts to dire warning of possible tariff effects on Hyundai

Updated: Jul. 12, 2018 at 6:16 PM CDT
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MONTGOMERY, AL (WSFA) - The escalating trade war between the United States and China - the world's two largest economies - could have a devastating impact on Montgomery's economy, specifically in regard to the future of the Hyundai vehicle plant and thousands of its workers.

Thursday, the Associated Press reported the labor union for Hyundai Motor Company said a downturn in U.S. auto imports due to President Donald Trump's threatened tariffs could force the company to curtail work at the Alabama factory.

The Montgomery factory "could be the first one to be shut down, putting some 20,000 American workers at risk of layoffs," said a union statement.

Montgomery Mayor Todd Strange called that "a ridiculous claim based on pure nonsense." Strange said Montgomery stands with Hyundai and vice versa.

"Hyundai chose our community and our state for specific reasons, including the expertise and dedication of our workforce, and has thus proven to be one of our strongest community partners," Strange said. Reiterating the commitment, the mayor pointed to the recent $400 million plant expansion announcement.

"All things considered, we feel it would be unwise and uncharacteristic of Hyundai to kill the golden goose that's been the key to Hyundai's success in the domestic marketplace," Strange said.

The union said Hyundai is contractually obligated to idle factories outside South Korea first in the event of a downturn.

When asked about the contract, Hyundai Motor Manufacturing Alabama spokesman Robert Burns said he didn't have any knowledge of it but could speak about potential tariffs.

"Free and fair trade makes the United States a competitive marketplace," Burns said. "Broad restrictions, such as tariffs, on auto and auto part imports will raise costs for American consumers and families. [HMMA] and its suppliers have a significant manufacturing presence in Alabama. Their combined operations are responsible for 38,000 direct and indirect jobs in our state. HMMA and its suppliers generate an annual economic impact of $4.82 billion to the economy of the State of Alabama, accounting for 2 percent of Alabama's Real Gross Domestic Product."

Burns added that "like other automakers, and the broader U.S business community, we hope the Department of Commerce follows the facts and confirms that there is no national security justification for imposing tariffs on imported autos and auto parts."

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