"Hyundai Motor Montgomery Plant Ranks 2nd in Productivity... The Secret Lies in US Incentive Policies and Labor Flexibility"

[Asia Economy Reporter Ki-min Lee] Hyundai Motor Company's Montgomery plant in Alabama, USA, has been ranked second in productivity among automobile factories worldwide. The plant has grown into one of the world's leading automobile production facilities based on various incentives and labor flexibility. It has been pointed out that domestic automobile manufacturing plants must ensure labor and production flexibility to actively respond to market conditions, in addition to government tax and technological support, in order to survive.

According to the Korea Automobile Manufacturers Association (KAMA) on the 11th, Hyundai Motor's Montgomery plant recorded a production time of 24.02 hours per vehicle in the 2021 automobile factory productivity evaluation conducted by the US consulting firm Oliver Wyman. This ranked second globally after PSA Sochaux plant (21.93 hours) and first in North America. This is attributed not only to a high automation rate but also to labor flexibility and incentive policies.

In particular, productivity was maximized through securing labor flexibility such as free employment of non-regular workers and dispatched labor via local workforce support companies in Alabama. Currently, Hyundai Motor's Montgomery plant supplements 7-8% of its total workforce from various workforce support companies to flexibly adjust production of five different models according to semiconductor supply and market demand changes. This contrasts with Korea, where consultations with labor unions are common when adjusting production volumes by model.

The US state government's bold incentive policies have also contributed to productivity improvement. US state governments boldly implement tax exemption or reduction policies when companies make investments. Additionally, as companies face difficulties in workforce supply due to reduced foreign labor inflow caused by COVID-19 and unemployment benefits set higher than the minimum wage recently, state governments actively provide education, training, and workforce support through training centers.

Regarding this, Kim Ui-seong, head of Hyundai Motor's Alabama Montgomery plant, explained at a recent meeting with KAMA Chairman Jung Man-gi, who visited recently, "At the time of new investment, the US government provided incentives such as nearly free land and tax support," adding, "During additional investments, the state government not only offers tax exemptions or reductions but also directly supports education and training through operating training centers during the corporate operation phase."

Chairman Jung said, "To attract domestic investment by companies, it is necessary to create corporate conditions equal to those abroad," and added, "Without distinguishing between new and additional investments, active tax support policies should be implemented, and interest should be paid to creating at least equal conditions with foreign countries in the operational phase, including workforce and technical support." He continued, "To survive in the changed global market after COVID-19, the introduction and spread of smart factories, electric vehicles, and autonomous vehicles are necessary, but more importantly, flexible production in response to market changes is essential," emphasizing, "Our companies must be able to demonstrate production flexibility to actively respond to market condition changes by legalizing the use of non-regular and dispatched labor and the government should strengthen support to actively utilize these."

This content was produced with the assistance of AI translation services.