published Sunday, February 7th, 2010

'Power to surprise'

WEST POINT, Ga. -- Kia Motors executives like to say the South Korean automaker has the "power to surprise."

"We've got hope, and others don't," said Eddie Striblin, owner of the Downtown Diner in West Point, a city of 3,200 where the plant is located.

Residents of this West Georgia city say Kia's new auto assembly plant has offered optimism and trust that its economic promise will help pull the region out of a recession that lingered for years with the agonizing pullout of its former lifeline -- textile jobs.

Kia, whose advertising slogan is "The Power to Surprise," is on track to hire the 2,500 workers it pledged when the project was unveiled four years ago, company officials said.

Production at its first American factory began last November. The plant's current 1,200-strong work force is producing Sorento sport utility vehicles.

Another 850 people are to be hired over the next few months as the plant adds a second line, said Randy Jackson, director of human resources and administration for Kia Motors Manufacturing Georgia.

  • photo
    Staff photo by Patrick Smith/Chattanooga Times Free Press Two Kia Sorento models sit inside the West Point, Ga., plant. The midsize crossover SUV is the first, and so far, only model produced at the facility.

"We've got a second wave of hiring that we'll have in April," he said.

The West Georgia area also has landed 10 or so automotive suppliers, which bring hundreds of new jobs themselves. More suppliers are expected to come to the area that's about an hour southwest of Atlanta.

In addition, about as many suppliers have announced new plants or have expanded existing ones across the state line in Alabama, which is only a few miles away from the massive Kia plant.

Some suppliers serve both Kia and sister company Hyundai, which has an assembly facility in Montgomery, Ala., about 80 miles to the west.

VW IMPACT

While Kia ramps up operations, people in Chattanooga believe Volkswagen's new auto assembly plant, too, will help power this region's economy.

As well as the 2,000 people VW plans to hire, supplier companies are adding jobs. A supplier park next to the plant is to hold about 500 workers and six companies to start.

Another supplier, Gestamp Corp., is building an automotive stamping operation nearby. Also, SL Tennessee last week announced a $35 expansion in Clinton, Tenn., that will create 300 jobs as it supplies VW and other auto companies.

More VW suppliers are expected in the future, though the recession has hurt as many companies struggle to stay afloat and find capital to expand.

VW's plant is slated to start production in the first part of 2011.

Meanwhile, the Kia plant is aiming at making another yet-unannounced vehicle and accelerating production to 300,000 units a year as its head count pushes to the 2,500 mark. The plant's assembly jobs pay between $18 and $23 an hour, Kia said.

DRIVING GROWTH

While Kia is gearing up, so is the economic engine expected to help drive that region's economy.

West Point Mayor Drew Ferguson said the area is just starting to grow as a result of the plant and its suppliers. Unemployment in December 2009 in Troup County, where Kia is located, was 12.7 percent. That's above the state's 10.1 percent jobless rate.

Typically, in other locations that have landed such projects, it takes three years after the announcement before growth sets in, Mr. Ferguson said. He said, for example, the area is starting to have new housing developments.

"There's no substitute for having a good manufacturing backbone," the mayor said. "The opportunities are bright because employment is real and large."

A study by Georgia Tech estimates 20,000 new jobs by 2012 across a nine-county area of West Georgia and East Alabama because of Kia. The economic impact to Georgia is pegged at about $4 billion per year, according to the study.

Bong Kang, a Korean who moved from Atlanta to West Point about 16 months ago to open the Miso Sushi House, said he did so because of the Kia plant.

"I've had a good reception," he said.

TEXTILE jobs

Kia employee Patrick Sands said the area for many years had little but bad news as textile plant after textile plant shut down. But the Kia plant "gave people here hope," he said.

"The country was in recession, but we had great economic news," Mr. Sands said.

Bed and bath textile giant WestPoint Stevens formerly called West Georgia home.

The merging of West Point Manufacturing Co. and Pepperell Manufacturing had produced a business titan that employed more than 23,000 people in 1980. In 1988, the company added much of J.P. Stevens and elevated it to No. 2 nationally in the towel market behind Fieldcrest Cannon.

But growing foreign competition, old plants and a hostile takeover forced the closing of many of its factories across the South and the layoff of thousands of workers.

Now called Westpoint Home and headquartered in New York, the company work force has shrunk to 6,700 employees.

But, the Kia plant and its spinoffs are starting to rev up West Georgia, according to officials.

Automotive suppliers that have located in the region are expected eventually to provide more than 6,000 jobs.

"This area has been very successful," said Ray Coulombe, manager of economic development for nearby LaGrange, Ga., about wooing suppliers. "We're still recruiting suppliers."

He expects more to come over the next several years.

Dong Kon Lee, a Korean consultant for the Development Authority of LaGrange, said the exchange rate is favorable for South Korea's currency over the dollar. When that changes, more Korean business will come to the U.S., he said.

Developer Greater Valley Group recently began ambitious residential, retail and commercial efforts just across the state line from West Point in Alabama.

"The arrival of Kia and the automotive suppliers were definitely a catalyst for our investment and building," said Walter Shealy, chief executive of Greater Valley Group.

It has begun work on two housing developments in which there ultimately will be 377 units. Another development is planned for Troup County.

Also, it has built two new apartment complexes in Chambers County, Ala., adjacent to West Point, which opened in 2008 and are within seven miles of the plant. A third apartment complex was renovated, bringing the number of units available to more than 900.

That being said, the recession has had its impact as well. Some announced projects haven't gotten off the ground yet, officials said.

Mr. Ferguson said the challenge has been to find financing for business ventures.

In addition, the Kia project wasn't without its own costs.

The state and local governments, which won the sweepstakes for the automaker's plant in beating out Alabama, Tennessee and Mississippi, put up financial incentives of about $400 million.

Since then, Tennessee topped that amount when it snagged VW's $1 billion plant under construction at Enterprise South industrial park. State and local governments offered an estimated $577.4 million in tax breaks and direct assistance.

However, workers leaving the Kia plant one afternoon last month said they're grateful to have their jobs.

Jonathan Peacock of Valley, Ala., cited the pay and the hours.

"It's a good deal," he said.

Joey Faulkner, of LaGrange, said he has been working on the assembly line for about six months after having left a sawmill job.

"I'm enjoying it," he said.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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