Months after he took office in 2003, Sonny Perdue trekked to South Korea to talk jobs with overseas executives. Nathan Deal touched down in Seoul to drum up business for Georgia in his first year as governor.
So it’s no surprise that Gov. Brian Kemp is following that well-worn path to the Asian nation for his first trade mission, a trip that starts Saturday and runs through Friday. He told the Atlanta Journal-Constitution in an interview that it made a “natural fit” for his first overseas job safari.
South Korea has fast become a major source of investment for the state, with $2 billion in projects announced in Georgia over the past year and several more major initiatives in the pipeline.
From humble beginnings – Georgia opened its first fully-staffed trade office in South Korea in 1985 – the state’s presence there has grown. South Korea is now the ninth-largest purchaser of Georgia goods and is the state’s fifth-largest import market. Atlanta enjoys daily Delta Air Lines and Korean Air flights to Seoul, vital links whose value is immeasurable, recruiters say.
Those numbers don’t tell the whole tale. A spate of recent investments, headlined by the $1.7 billion factory from battery-manufacturer SK Innovation, has transformed South Korea into what Georgia economic development guru Pat Wilson calls the state’s “hottest investment market.” Kemp’s trip, he told the AJC, is part victory lap, part recruitment mission.
“We want to say thank you. We want to let them know that we continue to stand by them. We feel like they’re going to continue to grow,” Kemp said. “And we’ll be visiting some prospects and meet with other people who will open up new markets to our existing Georgia businesses.”
A turning point in the relationship was the state’s recruitment of a Kia Motors factory a decade ago, an effort Perdue put at the forefront of his 2003 trip overseas weeks after the collapse of a deal with DaimlerChrysler to build a $754 million plant near Savannah.
At the time, he was urged by some economists to back off his courtship of the car makers, given the global glut of auto factories and the difficulties in wooing the industry. But he and trade officials were intent on winning a foreign car plant to revive a sector of Georgia’s manufacturing business.
That Kia project was consummated with a weekend trip by Perdue in 2006 to pave the way for a $1 billion plant in West Point that helped revitalize the state’s auto industry after the losses of Ford and General Motors factories in metro Atlanta.
The Kia deal came together in 11 weeks, a rapid negotiation for such a complex and expensive project. But the project has led to spinoff jobs from suppliers who now also serve automotive plants across the Southeast – and a $1.6 billion Kia expansion announced in 2012.
State officials hope to soon see SK Innovation’s battery suppliers pick the area around the factory for new investments, giving a much-needed jolt to the northeast Georgia economy.
“We’re seeing interest because of SK,” Wilson said. “We’re putting marketing dollars into [Korea] to leverage that even more.”
Sunny Park, president of the American Korean Friendship Society, said that’s smart. Smaller Korean companies can’t afford to study all 50 states to find the best fit for U.S. expansion, so they look to giants like SK or Kia as stamps of approval.
“They follow the big guys,” Park said. “For Kia, if it’s a good thing, they’ll just follow.”
Work the map
The trip continues a tradition for Georgia governors to look overseas to court big business through a mix of in-person visits and attractive incentives.
With the Great Recession still hampering Georgia, Deal traveled to Canada, England and Germany on state business in his first six months as governor. And Perdue trekked abroad 13 times his second term. Kemp plans to embark on several other overseas missions in the next year to hunt for jobs, and mentioned possible upcoming visits to Europe, Israel and Japan.
“I have no doubt Gov. Kemp will continue to do what his predecessors — Republican and Democrat — have done, which is work the global map,” said Craig Lesser, who ran the Georgia Department of Economic Development when the state landed Kia.
The missions are designed to recruit coveted projects but also lavish attention on firms that have already picked Georgia. Sometimes the meetings are held behind closed doors — even for the dozens of corporate executives and state officials that accompany the governor.
“Right now in the world we’re in, we’re a very attractive market for a lot of these countries. It’s growing, it’s robust. It’s very competitive here,” Kemp said. “But it’s important for us to be on their turf, so we understand their culture and build those relationships.”
During Deal’s trips to Brazil and Israel, he visited the headquarters of companies that put outposts in Georgia to thank executives and headlined meet-and-greets with local business associations to answer questions about the state’s economic climate and quality of life.
He also left the delegation for quieter meetings with executives to hash out specifics of deals, some that were announced days or weeks later and others that never became public because they fell apart.
“That’s the essence of these international economic development opportunities,” Lesser said. “It’s all about relationships.”
South Korea has become a particularly strong target, thanks to close diplomatic relations with the U.S. dating back to before the Korean War and the spate of high-tech innovators spawned in the skyscrapers of Seoul. Decades of diplomatic and military ties have made each side comfortable with the other.
There are at least 24 Georgia companies with operations in South Korea, and the state is home to 113 Korean facilities that employ more than 9,000 Georgians.
“When people talk about Asia they too often talk about China because of the size,” said Roger Tutterow, a Kennesaw State University economist. “But in a lot of ways, the Korean economy and political landscape fits with our local economy.”
Another thing Korean firms, particularly manufacturers, like about Georgia — it’s largely non-union and a right-to-work state, Park said.
Kemp told the AJC he hopes to make the most of the flurry of “dinners, meetings and selling Georgia” - along with a meeting with Prime Minister Lee Nak-yon - that awaits.
“This gives us more time — more than we get in an hour meeting here in Georgia — to sit down with them and get to know them, to solve the problems they have and the issues they need to address,” he said. “It’s quite invaluable.”