MONTGOMERY, Ala., October 19 — Hyundai Motor Manufacturing Alabama (“HMMA”) today announced the findings of an economic impact study quantifying the automaker’s impact on the economy of the State of Alabama in 2010. Conducted by M. Keivan Deravi, Ph.D., special assistant to the Chancellor and professor of economics at Auburn University at Montgomery, the study finds that HMMA and its suppliers generated a total impact of $3.8 billion to Alabama’s economy in 2010, accounting for 2 percent of the state’s Real Gross Domestic Product. Additionally, HMMA and its suppliers were responsible for more than 34,000 full-time equivalent jobs statewide in 2010, according to the study.
“Hyundai has dramatically improved the manufacturing sector of central Alabama’s economy,” said Dr. Deravi, who has completed similar studies for all of the mega industrial projects recently located in Alabama, including two other automakers and Northrop Grumman. “While the greater United States experienced a contraction of manufacturing jobs, HMMA contributed to a 21 percent growth rate in manufacturing employment in the Montgomery Metro Area between 2002, when Hyundai began construction of their plant, and 2006 after its first full year of hiring.”
Specific to public fiscal impact, the study estimates that HMMA and its suppliers yielded $61.3 million in total tax revenue to Alabama in 2010. HMMA’s local tax impact was approximately $8.3 million, while HMMA and its suppliers generated an estimated $53 million of tax revenue for the state.
“When we recruited Hyundai, we knew their presence would be a game-changer for central Alabama and the River Region, but little did we realize how significant it would be,” said Montgomery Mayor Todd Strange. “Hyundai’s impact and that of their suppliers has far surpassed our expectations and we greatly appreciate the confidence they placed in us.”
“Hyundai’s culture and work ethic are an inspiration to us and we are honored to be the home of this world-class company, making world-class vehicles with a world-class workforce,” added Strange.
Key findings of the report include:
Earnings and Employment
- As of 2010, HMMA employed 2,760 people and had an annual payroll of $218.5 million, $30.1 million of which was benefits ($188.4 million payroll).
- HMMA’s Tier 1 and 2 suppliers collectively employed 8,953 in Alabama, with an annual payroll of $231.3 million and benefits of $23.5 million in 2010.
- Combined, HMMA and its Tier 1 and 2 suppliers provided direct employment of 11,620 and produced a direct payroll of $419.7 million in 2010.
- HMMA’s earnings and employment impacts in 2010 were $517.7 million and 10,300 employees, while its Tier 1 and 2 suppliers’ impacts were $566 million and 24,000 full-time equivalent jobs.
- Combined, HMMA and its suppliers were responsible for more than $1 billion in earnings (payroll) and more than 34,000 full-time equivalent jobs in 2010.
- Of HMMA and its suppliers’ total economic impact in 2010, 69 percent of the output impact, 67 percent of the earning impact and 57 percent of the employment impact was specific to the manufacturing sector in the state.
Investment and Purchasing
- To date, HMMA has invested a total of $1.5 billion in its Montgomery plant, while its more than 40 Tier 1 and 2 suppliers have made a total capital investment of more than $650 million in Alabama.
- In 2010, HMMA spent a total of $5.1 billion to support its manufacturing operation and maintain its facility and investment, with approximately 54 percent of this total spent in the form of purchases from Alabama-based businesses.
- HMMA had $211 million in capital acquisition and expansion costs in 2010. From this sum, $203 million was spent on machinery, equipment and computer software, while the remaining $8 million was used for construction, building improvement and development costs.
- In 2010, HMMA purchased $2.7 billion in goods and services from Alabama-based businesses.
- HMMA’s Tier 1 and 2 suppliers had total sales of $5.0 billion in 2010, almost 50 percent of which were accounted for by HMMA purchasing.
- HMMA’s Tier 1 and 2 suppliers’ non-payroll expenditures were $879.7 million in 2010, 54 percent of which ($474.7 million) was purchased from Alabama-based businesses.
- HMMA and its Tier 1 and 2 suppliers were directly responsible for a total of $1.7 billion of net additional demand for goods and services in Alabama in 2010.
“Hyundai Motor Manufacturing Alabama could not be more pleased with our contributions to Alabama’s economy and employment,” said Y.D. Lim, president and chief executive officer of HMMA. “We are proud of our track record as an important and rapidly growing Alabama employer, and as a manufacturer of high value, high quality and high efficiency vehicles for American consumers.”
Hyundai Motor Manufacturing Alabama, headquartered in Montgomery, Alabama, is an independent manufacturing operation of Hyundai Motor Company, based in Seoul, Korea. HMMA currently produces the 2012 Elantra and Sonata sedans. Hyundai cars and sport utility vehicles are distributed throughout the United States by Hyundai Motor America and are sold and serviced by more than 900 Hyundai dealerships across North America.