Kia parent company plans second plant in Georgia

Kia parent company plans second plant in Georgia

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Now combined with Rivian, Georgia could boast a pair of EV auto projects within six months, bringing with them combined promises of thousands of manufacturing jobs and supplier spinoffs. The Accords, respectively, would be the two largest ever recruited by the state.

A deal could be formally announced before the May 24 GOP primary, when Kemp faces a tough primary challenge.

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The dirt road leading to the Bryan County mega-site recently purchased by the State of Georgia to attract major economic development deals.

Credit: Greg Bluestein

The dirt road leading to the Bryan County mega-site recently purchased by the State of Georgia to attract major economic development deals.

Credit: Greg Bluestein

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The dirt road leading to the Bryan County mega-site recently purchased by the State of Georgia to attract major economic development deals.

Credit: Greg Bluestein

Credit: Greg Bluestein

States covet auto factories because they bring billions in investment, thousands of middle-class jobs, and the likelihood of spin-off jobs from a network of suppliers. Kia already has a network of suppliers in Georgia that support its existing plant in West Point, where it builds gas-powered Sorento and Telluride SUVs and K5 sedans.

Although electric vehicles account for about 3% of auto sales in the United States, this is expected to grow exponentially as fuel and emissions standards tighten and the costs of building electric vehicles drop. Kemp and his predecessor, Governor Nathan Deal, targeted the sector aggressively.

In December, Rivian confirmed plans to build a $5 billion factory where it will assemble electric trucks, SUVs, delivery vans and battery packs at a site straddling Walton and Morgan counties. Rivian plans to employ 7,500 people at the site along I-20 about an hour east of Atlanta.

As part of the deal, the state has recruited an electric vehicle battery plant from South Korean conglomerate SK Innovation in Jackson County, about an hour northeast of Atlanta along I-85. SK has agreements to manufacture batteries for Ford and Volkswagen.

It’s not immediately clear what incentive package state officials would offer to land the Hyundai Motor Group expansion, but it could rival the record $1.5 billion bonus in benefits negotiated for Rivian. , which includes free land, grants, tax credits, labor training. improvement of the center and infrastructure.

The incentives drew criticism from watchdogs and local residents who slammed the package as overly generous, though economic development officials called it necessary to land a transformative project.

To exploreState and local authorities offer $1.5 billion for the Rivian project

High-tech deals, like Wisconsin’s Big Dreams for Foxconn a few years ago, don’t always pan out.

Georgia would commit public resources to two major automakers in hopes they could create thousands of manufacturing jobs, transform the state’s rural areas and retain the smarts of graduates from Georgia’s top universities in the state.

Conventional automakers like Hyundai, Kia, Toyota, Ford and General Motors are grappling with electric vehicle giant Tesla and a slew of well-funded newcomers such as Rivian and Lucid to perfect plug-in vehicles and claim market share as that analysts expect consumers to increasingly bypass vehicles. powered by internal combustion engines for battery-powered ones.

Last year, Hyundai Motor Group, which includes the Hyundai and Kia brands, announced plans to invest $7.4 billion in the United States by 2025 to expand manufacturing capabilities and boost vehicle production. electric and other mobility technologies.

Hyundai operates an assembly plant near Montgomery, Alabama, where Automotive News recently reported that the company will build an electric crossover for its luxury brand Genesis.

Prime real estate

Kia announced plans in 2006 to build its first US plant at West Point, near the Alabama border. During this period, the West Point plant has grown to employ more than 2,700 people and the business has attracted dozens of suppliers to the state, who collectively employ thousands more.

The factory opened in 2009, when Georgia was still mired in the Great Recession and West Point was still reeling from losses to the textile industry.

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Part of Kia’s sprawling West Point plant.

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Part of Kia's sprawling West Point plant.

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Part of Kia’s sprawling West Point plant.

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The plant has been a resounding success for Kia and operates around the clock with three shifts, producing 340,000 vehicles a year, according to the company. In 2021, Kia sold more than 700,000 vehicles in the United States, up nearly 20% from the previous year, according to data from Cox Automotive.

Vehicles from the Hyundai Motor Group, which includes Kia, Hyundai and Genesis, accounted for nearly 10% of all automobiles sold in the United States last year, ranking fifth among major automakers, just ahead of Honda, according to Cox Automotive, which, like AJC, is a division of Cox Enterprises.

To exploreSome of the biggest job openings in Georgia over the decades

It was not immediately clear which models could be assembled at this new Georgia plant.

Hyundai sells Ioniq 5 and Kona electric crossovers and hybrid versions of its Tucson and Santa Fe crossovers.

Kia is currently producing two all-electric vehicles – the EV6 crossover and a Niro EV based on the conventional model. Kia also sells hybrid versions of its Sorento, Niro and Sportage crossovers.

Kia is expected to continue operating its current West Point plant, a person familiar with the matter told AJC.

The 2,200-plus-acre South Georgia site being negotiated for the new plant, near the unincorporated town of Ellabell, is a sprawling sprawl the state once offered to several automakers, including Rivian, Volvo and Jaguar Land Rover.

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FILE – Governor Brian Kemp walks past a Rivian electric truck after announcing that electric truck maker Rivian Automotive will build a $5 billion battery and assembly plant east of Atlanta that is expected to employ 7,500 workers , on Thursday, December 16, 2021, in Atlanta. The state announced Monday, May 2, 2022, that it and local governments have agreed to offer Rivian $1.5 billion in incentives to build a 7,500-job, $5 billion electric vehicle factory. (AP Photo/John Bazemore, File)

Credit: John Bazemore

FILE - Governor Brian Kemp walks past a Rivian electric truck after announcing that electric truck maker Rivian Automotive will build a $5 billion battery and assembly plant east of Atlanta that is expected to employ 7,500 workers , on Thursday, December 16, 2021, in Atlanta.  The state announced Monday, May 2, 2022, that it and local governments have agreed to offer Rivian $1.5 billion in incentives to build a 7,500-job, $5 billion electric vehicle factory.  (AP Photo/John Bazemore, File)

Credit: John Bazemore

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FILE – Governor Brian Kemp walks past a Rivian electric truck after announcing that electric truck maker Rivian Automotive will build a $5 billion battery and assembly plant east of Atlanta that is expected to employ 7,500 workers , on Thursday, December 16, 2021, in Atlanta. The state announced Monday, May 2, 2022, that it and local governments have agreed to offer Rivian $1.5 billion in incentives to build a 7,500-job, $5 billion electric vehicle factory. (AP Photo/John Bazemore, File)

Credit: John Bazemore

Credit: John Bazemore

Rivian instead chose a site between the towns of Social Circle and Rutledge. But the Bryan County megasite has been seen as a tempting property for an electric vehicle factory or other industrial users.

The state of Georgia paid $61 million to purchase the undeveloped property last July.

State Economic Development Commissioner Pat Wilson, Georgia’s top recruiter, told the AJC last year that the Bryan County property was worth the high price because its combination of strengths can’t be found anywhere. anywhere else in the state.

The flat terrain is free of rocky ground and benefits from direct road and rail connections to the ports of Savannah and Brunswick.

A local joint development authority had the site under contract for some time before Georgia stepped in with a grant to complete the sale.

Last year, Trip Tollison, CEO of the Savannah Economic Development Authority, told the AJC that many smaller industrial parks near the new megasite would be good locations for suppliers to a larger factory.

A break in 2022

Georgia is currently experiencing record unemployment. And just like Rivian, Hyundai Motor Group will bet on the state and provide its new factory with workers to run its assembly lines.

Rivian plans to hire 7,500 workers at an average salary of $56,000, according to the incentive program it has entered into with the state. The deal with Rivian was valued at nearly $200,000 per job.

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Georgia Governor Brian Kemp, left, speaks during a Republican gubernatorial primary debate against former Sen. David Perdue, Sunday, May 1, 2022, in Atlanta. (AP Photo/Brynn Anderson, Pool)

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Georgia Governor Brian Kemp, left, speaks during a Republican gubernatorial primary debate against former Sen. David Perdue, Sunday, May 1, 2022, in Atlanta.  (AP Photo/Brynn Anderson, Pool)

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Georgia Governor Brian Kemp, left, speaks during a Republican gubernatorial primary debate against former Sen. David Perdue, Sunday, May 1, 2022, in Atlanta. (AP Photo/Brynn Anderson, Pool)

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The Rivian project has faced intense local opposition from a local network of nearby residents who say Kemp and other state officials have neglected to gain buy-in from nearby residents, to about an hour east of Atlanta.

Kemp’s main Republican challenger, former U.S. Senator David Perdue, criticized Kemp over the deal and his lucrative incentive program. Kemp presented the announcement as a stamp of approval for his economic program ahead of the primary.


A disclosure note

Cox Enterprises, owner of The Atlanta Journal-Constitution, has a roughly 4% stake in Rivian and provides services to the company. Sandy Schwartz, a Cox executive who oversees AJC, is a Rivian board member and personally owns stock. He does not participate in AJC’s coverage of Rivian.

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