Kia Motors sent an unmistakeable signal Wednesday that its mammoth auto assembly plant in West Point, Ga. — which has been on a fast-paced production roll since its opening three years ago — is here for the long term.
The company, with assistance from several entities in West Point, Troup County and Georgia Gov. Nathan Deal’s office, said it plans to invest $1.6 billion on new machinery, tools, equipment and other production-enhancing technology over the next 16 years to “satisfy demand” for Kia’s vehicles in the U.S.
“It does give Kia long-term stability here,” said West Point Mayor Drew Ferguson. “It does give them the ability to grow their supplier network here, which we think is vitally important, and where we think a lot of new job creation will come from.”
Most importantly, he said, it gives Kia Motors Manufacturing Georgia — the South Korean automaker’s only U.S. assembly plant — everything it needs to remain on the cutting edge of the auto industry, while also improving the surrounding area.
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“Kia has an exceptional track record of growth in our state,” Deal said in a statement. “The wave of economic impact created by Kia’s presence in Georgia goes far beyond the 10,000-plus jobs the company and its suppliers have created and will underpin the region’s economy for generations to come.”
The project — which took nine months to put together — was negotiated by Kia, the city of West Point, the West Point Development Authority, the Troup County Industrial Development Authority, the Georgia Department of Economic Development and Georgia Quick Start, the state said.
Kia Motors spokeswoman Corinne Hodges and Ferguson confirmed the pieces of the deal include $1 billion in bonds to be issued by the West Point Development Authority, and $600 million more by the Troup County Industrial Development Authority.
The city of West Point will receive $800,000 annually for the first five years and about $181,000 for years 6 through 16, Ferguson said. The city’s development authority also gets $650,000 earmarked for economic development.
“The $181,000 is basically an offset for the cost of providing public safety and services to them. The $4 million on the front end has more to do with assisting the city of West Point meet its community development goals,” said the mayor, ticking off better housing and education and more commercial and retail development in the area as prime goals.
Troup County, meanwhile, receives $450,000 on top of a $3 million grant that will be seed money for a new career academy in advanced manufacturing that is now in the planning stages with the county’s school system.
“Our plan is by August of next year to have completed our work, with a community assessment of need, a definition of curriculum, and marrying that curriculum to the school system,” said Troup County Commission Chairman Ricky Wolfe. “We’ve already done a lot of work, but we want to do it correctly and we want it to reflect the true needs of this community.”
Kia, in return for the additional cash to the city and county, will receive 100 percent tax abatements on any capital improvements the automaker makes over the 16 years. The county school board will abate 50 percent for the first eight years and 25 percent for the final eight.
Wolfe said the deal is a win-win situation for all involved — West Point, Troup County, the region and the state. He points to the $1.6 billion figure, which surpasses the original $1.1 billion in investment by Kia to construct the plant.
The mother facility now employs just over 3,000 people, he said, with 20 percent of those workers living in Troup County and 15 to 16 percent in Muscogee County. That translates to more than 450 Kia workers commuting to West Point from Columbus.
“We’re very excited about it. It just shows that the Kia model is working for them and for us,” Wolfe said. “They have blown through their sales numbers, their profit numbers almost every month. This gives them a way to competitively expand and continue to gain share, which is nothing but good things for them and our community.”
Wolfe also points to the alternative to what the area is experiencing now versus what it faced before Kia announced its plans to locate off Interstate 85 near the Georgia-Alabama border.
“Pre-Kia, the city of West Point was basically dying. The textile industry had gone and they hadn’t been able to back-fill it. Downtown was quiet and becoming a ghost town,” he said before praising Ferguson. “Under his leadership and his counsel and with Kia coming to town, it’s going through a transformation.”
Since announcing in 2006 plans to build a manufacturing plant on 2,200 acres in West Point and Troup County — about 45 minutes north of Columbus — and launching production in November 2009, Kia Motors hasn’t looked back. The company has rapidly ramped up hiring and production, with U.S. sales of the Sorento crossover utility vehicle and now the Optima four-door sedan fueling growth. It also makes the Hyundai Santa Fe sport utility in West Point.
In February of this year, the company hit the milestone of assembling its 500,000th vehicle. The behometh plant already has a capacity for manufacturing 360,000 vehicles each year. Hodges said there are no current plans to expand the size of the assembly plant.
Ferguson said the rapid startup and growth of Kia in the area has injected a strong sense of confidence in local people and businesses.
“We look at what’s happened in West Point and it’s truly amazing. Kia is the manufacturing backbone that every community needs,” he said of the community of about 3,600 people that has landed nearly 40 new downtown businesses and Point University since the automaker came to town.
“Now we’ve got a strategic plan and a funding stream to execute our redevelopment plan for the core of our city,” the mayor said. “So just a lot of things have happened in a very short period of time, and we’re awfully excited about Kia’s long-term presence here.”