Hyundai will soon break ground on a $5 billion EV and battery manufacturing plant near Ellabell.
All this week, Savannah Morning News journalists have explored the infrastructure needs and challenges for the factory site. The following is an excerpt from a “The Commute” podcast interview with Georgia Southern University economist Michael Toma regarding how Savannah and the region prepare for the facility, which is expected to employ 8,100 workers.
Credit: Georgia Southern University
Credit: Georgia Southern University
Hyundai announced its new factory in May. What was your initial reaction?
Michael Toma: “That’s a regional development project that highlights the benefits that we see when our counties and our cities work together. A project like that comes along maybe once in an economic development professional’s entire career, and it’s a win for all the economic development agencies in the region. We got it because we cooperated as a region. So, please keep doing that.”
What do you envision as the economic impact in terms of labor?
Toma: “The typical multipliers for large-scale manufacturing operations are on the order of two- to two-and-a-half times in terms of employment. So, if it’s 8,100 jobs at the site itself, we’re talking about 16,200 jobs with a multiplier of two within the regional economy. That is massive. We’re about to hit 200,000 jobs overall in the three-county area. So, if you add 16,000 jobs on top of that, that’s an 8% burst in employment growth, from one major announcement.
The question remains, where does Hyundai and its suppliers and all the service businesses that grow up around it find those workers?
Toma: “It is stunning the amount of pressure, quite literally, that it’s going to put on our regional labor market. An operation like that Hyundai plant is going to draw labor in from a 60- to 75-mile radius. That’s how far people are going to be willing to drive for the higher wages and opportunities that are created from having that plant there. So, in terms of the labor market, we need to start planning right now. I’m sure planning is already underway.”
Just as the plant puts pressure on Savannah’s labor market infrastructure, all those employees are going to stress physical infrastructure. What needs to be addressed in those areas?
Toma: “People hear infrastructure and they think water and electricity. But that’s not the type of infrastructure we need to focus on. Those things will happen because the plant can’t open without that. Where we’re going to see massive changes is in what western Chatham County, northern Bryan and all of Effingham are going to look like. Those are the areas that will be most convenient to commute to the plant from.
“Where we are going to struggle, and this is typically the case in terms of infrastructure, is that transportation networks tend to lag economic growth. We can't build a new road in six months. It's going to take some longer-term planning and getting the drawings on the boards as soon as possible.”
More traffic, road improvements, new residents … that adds up to additional development in areas that are sparsely populated right now. What do we need to be prepared for there?
Toma: “There certainly will be more stresses on local governments in terms of providing basic public services. Police, fire, waste management, school districts. To think 50% of the jobs related to Hyundai will be filled by people who currently live outside our region is low; we’re probably looking at close to two-thirds. The plant itself is going to fundamentally change this region.”
Full episodes of The Commute are available through mobile device podcast apps by searching “The Commute with @SavannahOpinion". The Commute podcast is presented by National Office Systems.
This article originally appeared on Savannah Morning News: Q&A: Economist marvels at successes, challenges around the planned Hyundai EV plant
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