Governor Sonny Perdue of Georgia (left) with KMMG and KMA President and CEO Byung Mo Ahn at the arrival of one of the final pieces of the press equipment at the plant.
It sounds like the name of an advertising agency, but KMMG actually stands for Kia Motors Manufacturing Georgia, the first U.S. plant for the Korean-owned automaker, which was founded as a steel tubing and bicycle parts maker in the waning days of World War Two.
The 15-year-old U.S. sales company, Kia Motors of America, has achieved a record market share thus far in 2009, rising nearly 50% to 3.1% through July. Now it’s about to open its first U.S. assembly plant late this fall in what is more than a $1 billion gamble that it can keep the sales momentum going in the worst U.S. auto market since the Great Depression.
“It will be a historic milestone when the first Sorento (sic) rolls off the assembly line at our state-of-the-art manufacturing facility in West Point, Georgia later this year,” said Michael Sprague, vice president, marketing, Kia Motors America.
“Our first domestically-built vehicle, the all-new Sorento will be built by team members who have undergone rigorous training and who have great pride in their newly learned skills,” Sprague added.
The plant, located on 2,200 acres, follows Southern tradition in that it is not unionized. At full production levels, more than 300,000 vehicles will be assembled by about 2,500 workers.
In addition, automotive suppliers who have located in the region as a result of Kia’s presence will provide more than 6,000 jobs it’s estimated. Right now, 43 workers from KMMG are training at Kia’s Research and Development Center in Namyang, Korea.
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These workers are part of three waves that will be heading to Korea for training during the next few weeks. Overall, about 120 KMMG workers will be in these waves, bringing the total number of workers to more than 350 who have experienced (endured a long airline flight and a 180 degree time shift?) overseas training 14,000 miles away in a country that still relies on the U.S. taxpayer supported military to protect it from a hostile communist government in North Korea.
KMMG is currently in what’s called the “T2 Trial Phase” and has more than 900 workers on board. By the end of August, there will be around 1,200 workers.
The Namyang R&D Center is billed by Kia as a “cutting-edge facility that encompasses the whole design process, from pre-design studies, prototyping and full-scale aerodynamic testing to crash testing along the extensive on-site test track.”
As with all Kia models, the Sorento will be covered by a 10-year or 100,000-mile limited powertrain warranty, a five-year or 60,000-mile limited basic warranty, and a five-year or 100,000-mile rust anti-perforation warranty. A five-year/60,000-mile roadside assistance plan is included.
In 1994 when the Sephia compact sedan priced at $8,495 went on sale at four Portland, Oregon, area dealers, that Kia officially entered the U.S. market.
Under Korean industrial policy, the Korean auto market is in effect restricted to U.S. based makers. Korea imposes an 8% tariff on U.S. made vehicles and parts, compared to 2.5% on vehicles sent from Korea into the U.S. Korea also penalizes U.S. vehicles with high taxes on larger engines, U.S. makers complain, but that’s a product choice.
Other critics of Korea point out that the country is now accustomed to shipping more than 800,000 cars annually into the U.S. while fewer than 8,000 cars from the U.S. are sold there. Well, yes, those are the numbers.
In addition, Korea protects its agri-business with subsidies that are among the largest in the world while restricting U.S. farm imports. And, of course, there are non-tariff barriers, as well charges of government agency corruption. As a result, a proposed “free trade agreement” with Korea worked out in 2007 is currently stalled in the U.S. Congress, as members are apparently rethinking a U.S. trade policy that has wiped out whole sectors of the economy by allowing unrestricted access to the U.S. market.
The U.S. remains the only industrialized nation the world without a formal government agency to oversee trade and industrial policy to protect and create jobs. It is politically impossible, in my view, for a Democratic Administration to go ahead with a “free trade” agreement with the U.S. economy at depression levels.