The factory and its popular models have propelled the South Korea automaker and its affiliate Kia into the No. 4 spot in US sales for the first time in 2023, surpassing Jeep and Ram owner Stellantis NV. Its high levels of output, close-knit supply chain and low labor costs have buoyed Hyundai Motor Co.’s profit margins, which are among the best in the global auto industry.
But this crown jewel has been tarnished by its low wages, a major engine recall and lingering fallout from the use of child labor in its local supply chain. And Hyundai’s future success in the US will rely less on its Alabama operation as it plans a rapid shift to electric vehicles despite uncertain demand and government support given the potential return to power of former President Donald Trump.
“Hyundai has to be careful not to grow too fast for its own good,” said Sung Hwan Cho, a former executive vice president at the carmaker and current president of the International Organization for Standardization. “A stalk that sprouts too quickly will tumble over.”
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Like many other foreign automakers, Hyundai has based its manufacturing in southern states with low wages and rates of unionization. The Georgia facility will make a number of electrics for both the Hyundai and Kia brands, while the Alabama plant will continue to produce a single EV.
The Montgomery facility, which has become a model for other factories around the world, boasts one of the lowest ratios of workers per vehicle anywhere — about half that of its mother plant in South Korea. During a recent visit by Bloomberg, robots abounded and few workers were visible outside the confines of the final assembly line.
‘Birthplace of Productivity’
Hyundai proudly calls Montgomery “the birthplace of high productivity.” Nearly 500 robots are used on its assembly lines, speeding up production to one vehicle every 16 hours. That’s faster than the industry average, which can take up to 35 hours, according to JVIS-USA LLC.
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