What's next for Hyundai?

AP-Mongomery, Al.-Monday's announcement that Hyun­dai Motor Manufacturing Alabama will expand its engine plant is good news for the area. It means 214 new, well-paying jobs and a $173 million capital invest­ment. But, because Hyundai has been balancing record sales with capacity limitations, the question remains: What's next for the motor company, and its only U.S. production plant?
Montgomery Mayor Todd Strange said Monday that Hyundai is not ready to talk about other, bigger, expansions.
"It's a great sign," the mayor said about the engine plant announcement. "But that conversation (about additional possible expansions) is a bit premature."
When the company is ready to talk, Montgomery will be too, the mayor said.
But it's safe to assume that so will a lot of other cities and states. The mayor said that there were other cities that wanted Monday's announcement for themselves.
"(The engine plant expan­sion) says to the community and world that Hyundai has confidence in us," the mayor said. "That just keeps us at the table for any other op­portunities they will have."
HMMA spokesman Rob­ert Burns said Monday that any major expansion deci­sions will come from South Korea.
"Hyundai Motor Company has control of our long-term plans, but this is a positive sign, no question," Burns said.
He also said that with more than 1,700 acres, the Montgomery facility has plenty of space to grow.
"I just don't know what that growth may be," he said.
HMMA President and CEO Y.D. Lim said Monday that the expanded engine plant is another example of Hyundai's effort to make products close to its assem­bly plants. The Hyundai San­ta Fe is made at the Kia plant in West Point, Ga.
"It will also provide us the opportunity to implement new manufacturing technolo­gies," Lim said.
Of the $173 million to be spent on the engine shop ex­pansion and modification, $10 million will add 16,400 square feet of space to an existing building and prepar­ing the site for $163 million in new equipment and tech­nology.
Construction of the ex­panded plant is expected to be done in the fall, and pro­duction is expected to begin March 2012.
The expansion will allow for the local production of the four cylinder, 1.8 liter Nu engine, used in the Mont­gomery-made Elantra. Cur­rently, all Elantra engines are imported from Korea.The engine plant expan­sion also will increase HMMA's capacity to pro­duce its 2.4 liter Theta en­gines for the Montgomery-made Hyundai Sonata, as well as the Hyundai Santa Fe and Kia Sorrento at the Kia Motor Manufacturing plant, which is Hyundai's sister company. After the expan­sion, the plant is expected to build about 300,000 engines each year, Burns said.
The Nu engine will re­place the production of the Lambda engine, which is used in the all-wheel drive versions of the Santa Fe and Sorrento. That engine will be made in Korea, Burns said.
Burns said the entry-level jobs at Hyundai will pay about $16 an hour and offer benefits.
Hyundai draws workers from up to 60 miles away from the plant off of I-65, but most are from the River Re­gion, Burns said.
"We are confident that there is a skilled workforce that meets our needs," Burns said.
In March, the unemploy­ment rate in Montgomery County was 9 percent -- two-tenths of a percentage below the state average.
The state provided $2.5 million in incentives to Hyundai for the expansion while the city and county to­gether offered $750,000.
The announcement comes after weeks of speculation about the 2,600-employee plant that began production in May 2005.
The $1 billion factory in south Montgomery is Hyun­dai's only U.S. plant.
In April, Hyundai Motor America sold 61,754 vehi­cles, up 40 percent compared to April 2010. The two Mont­gomery-made cars were the top sellers with 22,100 Elan­tras and 21,738 Sonatas sold. Last month, the Montgomery factory built 11,222 Elantras and 17,180 Sonatas.
The Sonata Hybrid is made in Korea, and thou­sands of additional Elantras have been shipped to the U.S. to meet demand.