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Kia's New Plant

Kia breaks ground on a new $1 billion plant in Georgia expected to open in late 2009 with an annual capacity of 300,000 vehicles

For several hours last Friday, the population of West Point, Georgia swelled – albeit temporarily – by over 500 people who had come for the official ceremonial groundbreaking of Kia’s $1 billion factory.

Actual groundbreaking was already underway. A small army of cranes, back-hoes and bull dozers could be seen as they cleared 3,200 acres of land for the new plant.

A little more than an hour drive from Atlanta, the special media bus drove onto the property off I-85 and Webb Road through what will be the front gate. Ahead, two pristine white temporary structures and a landscaped reception area were visible.

One of the structures had been outfitted as a presentation center complete with two jumbo television screens, a huge podium backed with a special banner, a ceremonial area, several stations of silver shovels and white gloves.

Row upon row of white folding chairs had been set up on temporarily carpeted floors, risers for photographers and video news crews, theatrical lighting, audio visual gear, and lots of potted plants and flowers. The other structure we learned was for the special luncheon following the ceremonies.

As the invited guests, speakers and Kia executives were gathering for an impromptu news conference – E.S. Chung, Kia’s CEO and son of Chung Mong-Koo, chairman and CEO of Hyundai-Kia Automotive Group said the company “had not yet decided what vehicles would be built in the new plant but some of them would be for the export markets in Central and South America.”

Chung Mong-Koo, chairman and CEO of Hyundai-Kia Automotive Group

Chung also said the factory would help Kia attain its goal of selling 650,000 vehicles in the U.S. by 2010 – slightly less than the 800,000 units previously mentioned as a sales goal.

His father, Chung Mong-Koo, noted in a dual language speech:

"The establishment of the U.S. plant will serve as a springboard for us to achieve our ultimate goal of firmly establishing Kia as a truly world-class global automaker. Kia Motors will do our best to secure jobs and sustain financial growth in the area and will strive to become a responsible corporate citizen who contributes to the local community and preservation of the environment."

A large contingent of executives from Korea were present along with several state and county government executives including, Sonny Perdue, governor of the Peach State.

“Today’s ceremony marks the beginning of a long-term partnership between Kia Motors and the state of Georgia,” Perdue said during a speech that hailed the numerous rewards for the state of Georgia. “We are looking forward to many years of cooperation as Kia’s new plant in West Point creates thousands of jobs and sets the standard for the automotive industry."

When questioned about sales in the U.S., Len Hunt, COO of Kia in America commented, “We want to double our volume in America by 2010.” The new Kia factory is expected to open in late 2009 with an annual capacity of 300,000 vehicles.

News reports from Georgia media have said the state paid over $34 million for the property – 36 different negotiations were necessary – with rates paid averaging 2.5 times fair market value. One 5 acre site sold for $160,000, while a 75 acre piece of property brought $970,000. Sources indicated that if the offer were declined the state could impose eminent domain law to acquire the property. If done, this would have meant the land owner would receive fair market value only.

In addition to the cost of land acquisition, the state of Georgia is spending additional millions for a special Kia interchange that is expected to exceed the $30 million expenditure due to increased material costs.

When fully operational the new plant will employ between 2,500 and 3,000 local workers. An additional 2,000 workers will come from Kia suppliers who will relocate to the area. At least three Kia suppliers have already broken ground or announced plans to build facilities in Georgia or nearby Alabama to serve both Kia and Hyundai manufacturing plants.

Provided by American International Automobile Dealers Association—The Ultimate Online Resource for the Automotive Retail Industry

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