Hyundai Provides 'Stability' | Trade and Industry Development

Hyundai Provides 'Stability'

Sep 27, 2009

Four-cylinder engines move along an assembly line at Hyundai's auto factory in Montgomery. The new engine facility has helped provide stability in the current industry downturn.

As automakers around the world began to feel the strain of a global sales slump last fall, Hyundai quietly unveiled a life preserver of sorts at its Alabama auto factory.

The Korean automaker started up a new $300 million engine plant in September, and workers began building fuel-efficient, four-cylinder engines.

The timing couldn't have been better. While auto sales dropped precipitously across the board, smaller, gas-sipping cars -- such as the Sonata sedan that rolls off Hyundai's Montgomery assembly line -- offered more appeal among budget-minded shoppers.

"When we were impacted by consumers' shift to more fuel-efficient vehicles, we were able to move with the market quickly," said Robert Burns, a spokesman for the Hyundai plant. "We were able to make more 4-cylinders and put them in Sonatas, and we were able to build it all here."

As a result, the new engine plant has been a stabilizing force for Hyundai's $1.4 billion factory, as some workers were shifted from an existing V-6 engine facility on site to make more of the in-demand four-cylinder models.

Production continues to ramp up in the new facility, which has a way to go before it reaches its annual capacity of turning out 286,528 four-cylinder engines.

Also yet to be realized are the 522 new jobs tied to the new engine plant and a related parts-consolidation facility. Hyundai announced that expected jobs total in the spring of 2007 when it unveiled plans for the project. At the time, officials announced state and local incentives of up to $20.5 million.

But more activity for Hyundai's engine-making capability is on the horizon. Hyundai's sister company, Kia, is building an auto assembly plant in West Point, Ga., and the Montgomery plant will ship V-6 engines to that factory, which is expected to start up this fall.

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