How Georgia’s Korean connections helped fuel Hyundai EV plant deal

ELLABELL, GEORGIA - MAY 20, 2022: Hyundai Motor Group President and CEO Jae Hoon Chang speaks to during the announcement that the South Korean automotive giant is building an electric vehicle plant in Ellabell, Ga. It is the second major electric vehicle factory announcement in Georgia since December as state economic development officials try to turn the Peach State into an important manufacturing hub for battery-powered automobiles. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Combined ShapeCaption
ELLABELL, GEORGIA - MAY 20, 2022: Hyundai Motor Group President and CEO Jae Hoon Chang speaks to during the announcement that the South Korean automotive giant is building an electric vehicle plant in Ellabell, Ga. It is the second major electric vehicle factory announcement in Georgia since December as state economic development officials try to turn the Peach State into an important manufacturing hub for battery-powered automobiles. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Hyundai Motor Group EV plant announcement near Savannah a deal built on decades-old relationship.

On a sweltering Friday in May, Hyundai Motor Group executives, Gov. Brian Kemp and hundreds of Georgia business and political leaders raised glasses of champagne to toast the biggest economic development project in state history.

Hyundai’s commitment to invest $5.54 billion and hire 8,100 for a sprawling future electric vehicle plant in Bryan County was the result of a fast courtship, state officials have said. But it was a successful recruitment 37 years in the making.

Georgia opened its first trade office in Seoul in 1985. It took 11 long years to land the first Korean manufacturing prospect — an SKC polyester film plant in Covington — and another 10 years before Kia Motors picked Georgia for its first U.S. factory in West Point. Then in 2018, conglomerate SK Innovation selected a site in Jackson County for a multibillion-dollar battery factory to power plug-in vehicles.

Now Korea ranks as one of Georgia’s biggest trade partners. The state has one of the largest Korean-American populations in the U.S. And Georgia officials have said the future EV plant near Savannah could bring thousands more jobs through suppliers, just as Kia’s West Point factory did.

“Our roots really go back a long way with just creating relationships and building trust through our office in Seoul,” said Pat Wilson, the state’s economic development commissioner.

Multiple Georgia governors have visited Korea, from George Busbee to Sonny Perdue to Nathan Deal. Kemp made Korea his first overseas visit as governor, emphasizing the importance of the partnership.

Today, Korea is the 10th largest export market for Georgia, and Georgia’s imports from Korea totaled $8.83 billion in 2021, including motor vehicles tractor parts, bulldozers, engines and fork-lift trucks.

Opening a trade office was “really an investment for the long term,” Wilson said. “Korea has been a strategic focus for a long time.”

The bet is paying off.

“Korean investment is growing at a rate that is eclipsing every other country right now not only In the announcements being made, but also the pipeline coming out of Korea,” Wilson said at a Korea Society event. Even before Hyundai’s announcement, Korea was the No. 1 foreign country investing in Georgia in fiscal year 2020 and the No. 1 country for job creation in Georgia in fiscal year 2021.

Diplomatic visits are key for developing relationships in Korea, said Jae Kim, president of the Southeast U.S. Korean Chamber of Commerce.

“Having a personal touch is important,” he said.

The diplomatic wooing is also bipartisan. Democratic U.S. Sen. Jon Ossoff also visited Korea last year to urge Hyundai officials to invest further in Georgia. And in May, as Kemp and Hyundai officials toasted the future EV factory under a tent at the site near the community of Ellabell, President Joe Biden met with Hyundai officials during his three-day stop in Seoul, part of a recent five-day trip to Asia.

‘Comfortable in Georgia’

Some of the fundamental competitive advantages to attract major factories are already part of the Georgia’s infrastructure: A deep-water port in Savannah to bring in supplies; the busiest East Coast port for shipping finished vehicles in Brunswick; the world’s busiest airport with a joint venture between Delta Air Lines and Korean Air operating flights between Atlanta and Seoul. Georgia is also a “right-to-work” labor laws that translate into low unionization among workers.

Generous state incentive packages also play a role. Officials have not yet said how much in incentives will be given to Hyundai, but the package of local and state tax breaks, grants and land is likely to rival the $1.5 billion offering made to upstart Rivian for an EV factory an hour east of Atlanta.

Georgia’s deal with Rivian was the largest-ever for an automaker, according to incentives watchdog group Good Jobs First. State officials have defended the tax breaks and other perks to land Rivian and other high-value targets, but many economists say bountiful incentive packages are often too generous to businesses and come at the expense of other taxpayers.

Georgia is also home to a large Korean American population, with more than 71,000 estimated to live in the state. Metro Atlanta ranks in the top 10 metropolitan areas nationwide with the largest concentrations of Korean immigrants. Korea has had a consular presence in Georgia since 1971.

Little things also make Georgia attractive to Korean companies, including the fact that Korean is one of more than a dozen languages the Georgia Department of Driver Services offers its road rules exam in.

“We prepare them to be comfortable in Georgia for business,” said Sunny Park, president of the American Korean Friendship Society and founder of a national janitorial service company based in Atlanta. “That’s a very good gesture.”

For Georgia economic development officials, the opportunity to gain a piece of the expansion by automakers into electric vehicles — including by Hyundai and U.S. electric vehicle startup Rivian — is a chance to be part of “the fastest change that we’ve ever experienced in an industry, that we’ve ever seen in our economy, dating back to the industrial revolution,” Wilson said.

“It just so happens that Korean companies were some of the early adopters in research and development of battery technology,” he said.

Hyundai’s decision to expand in Georgia will not only draw suppliers to the area, but could prompt other Korean companies to follow, said Park. Hyundai “spends a lot of money on site selection,” so a lot of other Korean companies follow its lead, he said.

“It’s a domino effect,” said Michael Park (no relation to Sunny Park), a past board member of the Korean American Association of Atlanta. After the opening of the Kia and SK battery plants, “people realize that Georgia is a really good place to do business, there’s a big vibrant (Korean American) community around Gwinnett. ... All that plays a role.”

Wilson said one of the most important things Georgia offers to a company like Hyundai is direct help from the state to train workers. For major incentive deals, the state offers to find workers, train them based on the company’s requirements and then turn the workers over to them “the day that you open the facility, so that the day you turn on the lights and you turn on the machines the first time, you have the employees you need to run those machines,” he said.

For Kia, the state sent to Korea a team from its Quick Start program under the Technical College System of Georgia “to understand how they train their people,” then created a curriculum here in Georgia and built a training center on Kia’s campus in West Point, Wilson said.

Now, the plant has about 3,000 workers. Kia Georgia spokesman Rick Douglas noted that West Point and Troup County have gone from being a textile community to “an essential part of our company’s success, by retooling with different skill sets.”

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May 11, 2022 West Point - Kia’s hiring billboard is displayed along I-85 in West Point on Wednesday, May 11, 2022. Georgia is poised to announce its second electric vehicle plant, a massive assembly complex by Hyundai Motor Group, that could bring with it 8,500 jobs to a site near Savannah, people familiar with the matter have told The Atlanta Journal-Constitution. (Hyosub Shin / Hyosub.Shin@ajc.com)

Credit: HYOSUB SHIN / AJC

May 11, 2022 West Point - Kia’s hiring billboard is displayed along I-85 in West Point on Wednesday, May 11, 2022. Georgia is poised to announce its second electric vehicle plant, a massive assembly complex by Hyundai Motor Group, that could bring with it 8,500 jobs to a site near Savannah, people familiar with the matter have told The Atlanta Journal-Constitution. (Hyosub Shin / Hyosub.Shin@ajc.com)

Credit: HYOSUB SHIN / AJC

Combined ShapeCaption
May 11, 2022 West Point - Kia’s hiring billboard is displayed along I-85 in West Point on Wednesday, May 11, 2022. Georgia is poised to announce its second electric vehicle plant, a massive assembly complex by Hyundai Motor Group, that could bring with it 8,500 jobs to a site near Savannah, people familiar with the matter have told The Atlanta Journal-Constitution. (Hyosub Shin / Hyosub.Shin@ajc.com)

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

Infrastructure concerns

But Douglas also stressed that there are “investments needed now to support the needs of families moving to the area for work, such as available housing, high speed internet access, and the educational preparation needed” for advanced auto manufacturing.

“We cannot afford to wait or progress will outpace us and find us unprepared,” Douglas added.

Sunny Park also said he’s “a little concerned about the infrastructure we have.”

“We got plenty of land, but we don’t have enough people.... particularly labor,” he said. Multi-family housing is a key element needed to attract enough workers for a plant, he said.

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SK Battery America nears completion of its $2.6 billion plant in Jackson County. The factory will make electric-vehicle batteries for Ford and Volkswagen. It will employ about 3,000 workers.

Credit: SK Battery America

SK Battery America nears completion of its $2.6 billion plant in Jackson County. The factory will make electric-vehicle batteries for Ford and Volkswagen. It will employ about 3,000 workers.

Credit: SK Battery America

Combined ShapeCaption
SK Battery America nears completion of its $2.6 billion plant in Jackson County. The factory will make electric-vehicle batteries for Ford and Volkswagen. It will employ about 3,000 workers.

Credit: SK Battery America

Credit: SK Battery America

SK Innovation came under fire after federal authorities in 2020 arrested 33 Koreans at Hartsfield-Jackson International Airport who were slated to work for contractors at the SK plant without proper visas, then arrested 13 more Koreans who worked for contractors at the construction site in another crackdown targeting illegal workers.

Fox 5 reported that year on a local union that complained about Koreans getting jobs instead of local residents, and Korean workers living together in rental homes in a Braselton neighborhood.

The Atlanta spa shootings last year that killed eight people, including six Asian women, initially raised fears of anti-Asian sentiment. But at a Korea Society conference at the Commerce Club in downtown Atlanta this month, much of the business discussion revolved around companies’ workforce needs and supply chain issues.

SK Battery America executive Steven Jahng praised the attractiveness of Georgia to Korean companies and added: “Southern hospitality is very similar to Korean hospitality.”

While Georgia is working to lure big manufacturing plants to the state, “some counties or local city governments.... (do) not quite like to see outsiders come into the community,” Sunny Park said.

Combined ShapeCaption
ELLABELL, GEORGIA - MAY 20, 2022: Governor Brian P. Kemp and Hyundai Motor Group President and CEO Jae Hoon Chang are among the VIPs under a tent on the site where the South Korean automotive giant is building an electric vehicle plant in Ellabell, Ga. Hyundai plans to build a multi-billion-dollar electric vehicle assembly and battery plant outside of Savannah that eventually could employ about 8,100 workers. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

ELLABELL, GEORGIA - MAY 20, 2022:  Governor Brian P. Kemp and 
Hyundai Motor Group President and CEO Jae Hoon Chang are among the VIPs under a tent on the site where the South Korean automotive giant is building an electric vehicle plant in Ellabell, Ga. Hyundai plans to build a multi-billion-dollar electric vehicle assembly and battery plant outside of Savannah that eventually could employ about 8,100 workers. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Combined ShapeCaption
ELLABELL, GEORGIA - MAY 20, 2022: Governor Brian P. Kemp and Hyundai Motor Group President and CEO Jae Hoon Chang are among the VIPs under a tent on the site where the South Korean automotive giant is building an electric vehicle plant in Ellabell, Ga. Hyundai plans to build a multi-billion-dollar electric vehicle assembly and battery plant outside of Savannah that eventually could employ about 8,100 workers. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Finding workers

At the same time, many companies’ top concern is how to find enough workers to run their operations, and that’s likely to be a big focus for the Hyundai plant. The labor shortage is making it difficult for companies to simply keep up their existing operations, let alone open a massive new facility that requires thousands of new hires.

“Start-up operations, especially in automotive manufacturing, are extremely complex,” according to Douglas.

And a high-tech electric vehicle plant requires skills, knowledge and education that haven’t truly been developed in technical colleges or the workforce in general.

“Just like LaGrange, there wasn’t any expertise in automotive manufacturing [in the] workforce, but we created it,” Kim said. There’s a “similar type of challenge coming ahead. ... It’s going to be a total shift.”

Wilson said Georgia’s Quick Start program played a key role in winning the Hyundai deal, and he expects it can help train the thousands of workers that will be needed.

“It’s something that sets us apart,” he said.