It was April, 2002 when the State of Alabama announced that Hyundai would be opening a new billion dollar plant in 2005 in economically 
distressed Montgomery. I recall the headlines at the time about whether the $253 million in industrial incentives were sound business or public policy decisions. Indeed, in Chapter 8 we debate the merits of such incentive programs.
OK, so let’s look back with the benefit of 9 years of hindsight. The New York Times (Feb.18,2011) reports that Hyundai and its sister company, Kia (which just opened a plant nearby) have brought 1,000s of high-paying jobs to the region—and have even nurtured a little Korean culture in Montgomery. Hyundai is running its plant flat-out, with 2,650 workers staffing 3 shifts 24 hours a day. The jobs pay about $20/hour and there is so much overtime that workers make more than their unionized colleagues in plants up North.
Kia has hired 600 workers to ramp up a second shift at its Sante Fe brand SUV plant and plans to add 1,000 more for a 3rd shift. The presence of Hyundai and Kia have kept Alabama’s unemployment rates among the lowest in the SE—this despite the closure of 12 textile mills that had formed the area’s economic base for decades. Most of those textile jobs went to mills in China and India.
More good news: rarely do a few weeks go by without another parts supplier hiring up. Alabama now lists 138 suppliers that support the Hyundai plant, directly or indirectly.(Some also do business with Honda and Mercedes near Birmingham and Toyota in Huntsville). More than 50 companies have followed Hyundai from Korea to Montgomery, bringing 3,000 Koreans to the area. Finally, near the car plant, a Hyundai subsidiary that makes electrical transformers is building a factory that will create another 1,100 jobs.
Discussion questions:
1. Evaluate the incentive program today, nine years later.
2. What are the hidden benefits of attracting a major manufacturer like Hyundai?
3. Why is the company doing so well in this economy?
Is the consensus or opinion in favour of the incentive program in hindsight?
Was the incentive program the key factor in winning the business from Hyundai Motors? What other advantages did Montgomery/Alabama have to offer? Talent? Tax Incentives? Geographic location?
Really interesting to hear how this plant, community, business has done so well.
Josh Lee