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HYUNDAI SHIFTING GEARS

SHIFTING TO A HIGHER GEAR

Hyundai will add 877 workers, third shift to Montgomery plant

Summer 2012

By David Zaslawsky

The global mandate from Hyundai Motor Co. is squeeze as much production out of each of its existing manufacturing plants rather than build new ones.

The Hyundai Motor Manufacturing Alabama’s (HMMA) facility in Montgomery has been squeezing all it can from a plant with a stated annual 300,000-unit capacity. The manufacturing plant built a record 338,127 vehicles, a 12.5 percent increase from 2010 by using five 10-hour shifts and some Saturdays.

Even that has not been enough to keep up with the demand for the Korean automaker’s Sonata and Elantra, which are both manufactured in Montgomery. These two vehicles combined account for about two-thirds of all Hyundai sales in the U.S. More than 410,000 of Hyundai’s 645,691 units sold last year were Sonatas and Elantras.

This year, demand has been so strong that Hyundai Motor America (HMA), the company’s sales and marketing arm based in California, has increased its sales projection to exceed 700,000 vehicles this year – shattering last year’s record.

John Krafcik, CEO of HMA, told the Automotive News, “We are literally selling cars off the transporters.”

The company announced it is adding a third shift to increase capacity by 20,000 units and hiring 877 workers. That pushes the HMMA work force past 3,000. The third shift will begin in September and is expected to reduce some of the overtime that has been needed the past two years.

The increase in capacity means that the company is expected to manufacture 345,000 units this year, according to Robert Burns, senior manager of public relations and sales for HMMA.

Hyundai is not alone in adding a third shift to its manufacturing plant. General Motors has added third shifts to several plants and closer to home, Kia Motor Manufacturing Georgia added a third shift for its plant in West Point, Georgia; and Mercedes announced a third shift at its Alabama facility in Vance for the first time in its 18-year history there.

“The continued success of Hyundai’s Sonata and Elantra in North America is a direct reflection of the dedication to quality and craftsmanship by every HMMA team member,” Young Deuk Lim, president and chief executive officer of HMMA, said in a statement. “This commitment is the key reason Hyundai Motor Co. chose to continue to invest in the people of Alabama and increase vehicle production in Montgomery.”

Montgomery Mayor Todd Strange recently went to Korea to visit with Hyundai Motor Co. officials along with Alabama Governor Robert Bentley, Alabama Department of Commerce Secretary Greg Canfield, the Montgomery Area Chamber of Commerce, and others. The Alabama contingent visited other Korean companies including Hyundai Heavy Industries to ensure strong relationships. It was Bentley’s first trip to Korea.

Strange said that in the Korean culture it is important for company CEOs to meet with their counterparts and the governor is considered to be the CEO of Alabama.

“It’s not just Montgomery, but the entire River Region that will benefit from this because the people who get those almost 900 jobs are going to come from throughout the entire region,” Strange told the Montgomery Advertiser.

After reporting Hyundai’s best April with 62,264 sales, Dave Zuchowski, executive vice president of national sales for HMA, said in a statement: “Vehicle availability continues to improve and our announcement … of the assembly plant expansion in Alabama will provide much needed production increases for our highly fuel efficient Sonata and Elantra sedans while generating nearly 900 new jobs for the local economy.”

The expected ripple effect will mean additional jobs at the dozens and dozens of Hyundai suppliers as well as retail businesses as there will be more employees spending money.