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Hyundai Motor Manufacturing Alabama

John Mohr, Auburn University
Located in Montgomery, Montgomery County, Hyundai Motor Manufacturing Alabama (HMMA) was the first automobile manufacturing facility established as a subsidiary by the South Korea-based Hyundai Motor Company in the United States. At the HMMA facility, workers complete the final assembly of both engines and complete vehicles. HMMA employs approximately 3,000 full-time and 450 part-time workers, and, as of April 2014, the plant has built a more than 2.5 million vehicles. The facility has an annual production capacity of approximately 400,000 vehicles and more than 700,000 engines. HMMA began regular production of the Sonata midsize sedan in 2005. Currently, it builds the Sonata and Elantra midsize sedans for North American markets.
Hyundai Groundbreaking
Hyundai officials selected Montgomery for an assembly plant as part of a strategy to increase manufacturing capacity and expand sales in North America. Other factors included Alabama's status as a so-called "right-to-work" state, meaning it discourages organized labor activity. Prior to the selection, Gov. Don Siegelman's administration lobbied to convince Hyundai to choose Alabama. He and Alabama House Speaker Seth Hammett visited the company's South Korean headquarters during the Thanksgiving holiday in 2001. According to media reports at the time, their actions impressed Hyundai executives, who understood the importance of the American holiday. Bob Riley, then a U.S. congressman who was running against Siegelman in the gubernatorial election, also visited South Korea in a separate delegation.
Hyundai Factory in Montgomery
Ultimately, the incentive package offered by Siegelman and the state, worth about $253 million, also was a key factor in Hyundai's decision. The package consisted of $55 million to buy the land and prepare the site, $76.7 million in tax abatements, $61.8 million to train workers, $29 million for improving roads and other transportation facilities, and $12.1 million to cover advertising and other miscellaneous expenses. In addition, private companies contributed $18.2 million, in the hopes of attracting Hyundai as a business partner. The state paid for 51 percent of this incentive package with taxpayer funds, with local governments contributing 37 percent of the incentives, and private industry 12 percent. After a lengthy selection process, the location of the new plant was announced in April 2002, with Alabama edging out Kentucky, which only offered $123 million in incentives.
Critics complained that this incentive package was overly generous and an example of corporate welfare. Some were also unhappy that the state government steered Hyundai towards Montgomery, rather than Opelika in Lee County. Hyundai executives eliminated the city during the final site selection process because they were concerned that the area would not have enough workers to staff the plant. After the selection, however, Montgomery's Industrial Development Board encountered some problems when acquiring the land for the plant. A group of landowners sued the board in 2006 after they discovered that one person had been paid significantly more for his land than the others. This dispute was settled in May 2014, with the board agreeing that the former landowners share $3.45 million in compensation. The lawsuit did not delay the completion of the plant.
Hyundai Paint Shop in Montgomery
The various facilities at the HMMA site occupy 3.2 million square feet, situated on 1,744 acres of former pastureland. The plant includes separate facilities for stamping, welding, painting, general assembly, and engine production. The stamping facility hosts two high-capacity industrial presses that create car body parts. The welding and painting facilities are fully automated, using a computer-controlled production system and more than 400 industrial robots. General assembly takes place in a separate facility, with more than 7,000 linear feet of self-adjusting conveyor belts. In addition, the plant has a 2.3 mile test-track and a high-pressure water test booth for initial quality testing.
The first production and maintenance workers for the new plant were hired in fall 2003. Test production of the Sonata sedan began in July 2004, and regular production of retail vehicles began in spring 2005. The following year, the Santa Fe midsize sport utility vehicle was added to the production line at Montgomery. Hyundai officials also expanded the plant to accommodate Theta four-cylinder engine production, which began in November 2009. In 2010, production of the Santa Fe was moved to Kia Motors Manufacturing Georgia in West Point, Georgia. HMMA continued to produce the Sonata and began assembly of the Elantra compact sedan as well.
Hyundai Headquarters
The Hyundai plant has attracted a large number of automotive parts suppliers to Alabama that have constructed plants in the surrounding counties. HMMA utilizes approximately 30 Tier 1 suppliers, which are companies that provide parts directly to Hyundai for the assembly of new vehicles. These suppliers form a large portion of the total economic impact of Hyundai in Alabama. A 2011 study performed by researchers at Auburn University in Auburn, Lee County, estimated that the plant has contributed as much as $3.8 billion to Alabama's economy, including 7,000 jobs with direct suppliers. The same study reported that as many as 34,000 full-time jobs have been created in the state as a result of the plant and estimated that Hyundai and its suppliers have contributed approximately $61.3 million in tax revenue to the state on a yearly basis. Overall, the plant accounts for around two percent of Alabama's gross domestic product (GDP).
Hyundai's workforce in Montgomery is currently not unionized. To date, there have been no major campaigns to organize workers at the plant. This contrasts with Mercedes-Benz U.S. International Inc. (MBUSI) in Vance, where the United Auto Workers (UAW) union has conducted an ongoing campaign. Some automotive suppliers in the state have been organized by the UAW or other unions. However, no final assembly plants for automobiles are represented by unions in Alabama, including MBUSI and Honda Manufacturing of Alabama (HMA) in Lincoln, Talladega County.
Published:  February 6, 2015   |   Last updated:  February 17, 2015