The motto of Kia Motors Corporation — The Power to Surprise — certainly resonates in West Point, Georgia. Ordinarily, the motto is about Kia’s automobiles. But in Georgia, it is also about a huge investment by Kia and state and local authorities. Kia is investing $1.2 billion in a new automotive assembly plant. The new facility will employ an estimated 2,893 people, and stimulate suppliers to employ an additional 2,600.
At the anticipated employment of 2,693 jobs, the total state incentive package is worth $258 million, or $89,550 per job. On behalf of the local community, the state negotiated a local incentive package with the company that provides $130 million in property tax abatements over 15 years. The community and utility providers have also agreed to provide about $21 million in infrastructure improvements (water, sewer, gas, power, etc.) for a total local package of $151 million.
Ultimately, the deal is all about jobs, which are especially welcome in an area hard-hit by the decline of the textile industry. At the Kia plant, the average salary is expected to be $50,000, with benefits – a big boost to the local economy, where average per capita income is $17,626. A Georgia Tech study estimates the economic impact to the state of Georgia at approximately $4 billion per year.
In “the most complex deal we’ve ever done as a state,” according to Georgia Department of Economic Development deputy commissioner Chris Clark, the time elapsed from Kia’s first phone call expressing interest to a signed contract was 11 weeks.
Ordinarily, automobiles are assembled according to “just in time” principles. To keep inventories low, assemblers rely on nearby suppliers to produce components as needed. This approach, which assures the timely assembly of many components, was expressed in the deal itself. For example, just one aspect of the deal — securing the 3,300 acres of land Kia wanted — was accomplished in less than two months, even though the state’s team had to negotiate purchase options with more than 30 property owners.