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Hyundai to build 2nd plant in Montgomery
Facility will produce engines, create 520 jobs

By Phillip Rawls
Associated Press Writer

MONTGOMERY — Hyundai will build a second engine plant in Montgomery, creating 520 jobs and boosting the company's total employment in the capital city to more than 3,600, officials announced Monday.

Dong Jin Kim, vice chairman of Hyundai Motor Co., joined Gov. Bob Riley and other officials at the Capitol to announce the plant, which will be located adjacent to the company's assembly plant and its other engine factory in southwest Montgomery.

Kim said several states, including Georgia, competed for the $270 million plant, but the company liked what it saw in Alabama.

"We are enjoying great success here and want to continue to grow," Kim said.

Hyundai, the world's sixth largest automaker, picked Montgomery in 2002 for its first assembly plant in the United States. The plant, which started with a $1 billion investment and 2,000 jobs, now represents a $1.4 billion investment and 3,100 jobs.

Hyundai's suppliers in Alabama provide another 6,000 jobs, according to the Montgomery Area Chamber of Commerce. Hyundai officials said the engine plant, scheduled to open by September 2008, will require additional suppliers that could add 400 more jobs.

Hyundai's current engine plant makes the 3.3-liter, six-cylinder Lambda engine. The new plant will produce the Theta 2.4-liter, four-cylinder engine for use at the Hyundai plant and at the assembly plant Hyundai affiliate Kia Motors is building in West Point, Ga., near the Alabama state line. Salaries at the plant will start at $13.50 per hour, company officials said.

Alabama was in the hunt for the engine plant when Riley called the Legislature into special session to expand the state's borrowing capacity for industrial incentives by $400 million. Riley's plan passed without a dissenting vote March 2.

State officials said the state will provide $15 million to Hyundai for site preparation, construction costs, machinery and equipment, plus up to $2 million to train employees. The state will also make road improvements and will provide tax credits and tax abatements that are available to all new industries. For Hyundai, the sales tax breaks could total $11.2 million and the property tax breaks $10.5 million.

The city and county governments will chip in up to $3.5 million for site preparation, roads and other costs and will waive $410,000 in various permit fees. That will bring the total package to more than $43 million.

Kim said Hyundai is considering more expansion in Montgomery. "It depends on the success of our sales in the United States market," he said.

Neal Wade, the state government's top industry recruiter, said the Hyundai announcement Monday follows recent decisions by six Kia suppliers to locate in East Alabama and create 1,600 jobs.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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