Is Hyundai considering new U.S. manufacturing plant? CEO won't say
The chief executive of Korean automaker Hyundai's American operations today refused to say whether the company is considering a new U.S. manufacturing plant as demand surges for its vehicles.
Hyundai Motor America CEO John Krafcik, speaking to about 100 reporters at a media event at the company's technical center in the Ann Arbor area, said the company is facing a production capacity crunch with sales surging.
Hyundai Motor America CEO John Krafcik is seen here with the company's Veloster hatchback in downtown Ann Arbor this summer.
Angela Cesere | AnnArbor.com
"Yeah, let me give you the top three sites," Krafcik said, laughing. "Sorry for the facetious response."
After another question about the company's deliberations, he offered this: "It's difficult for us to talk about because they're sensitive internal discussions."
Krafcik's comments come as the company is considering an expansion of the Hyundai-Kia America Technical Center on Geddes Road in Superior Township. Superior Township, in cooperation with the Michigan Economic Development Corp. and Ann Arbor SPARK, is establishing a tax-increment financing authority to help Hyundai pay for electrical improvements at the technical center.
Speculation about the company's manufacturing plans come as Hyundai is managing a sustained rise in interest in its cars. Krafcik said the average Hyundai dealer has 26 days of product supply, compared to an industry average of 58 days.
He said he spends much of his time explaining to dealers why the company can't produce more cars right now.
Hyundai's U.S. retail sales have increased by 31 percent this year as the company expects to sell more than 640,000 cars in the U.S. The automaker's retail market share is 5.7 percent, up from 5.1 percent a year ago and 2.5 percent in the first quarter of 2008. Analysts say Hyundai has grown because of its quality improvements and an intense focus on fuel efficiency and affordability.
Krafcik said the company boosted production capacity at its Alabama plant by 10 percent this year, from about 300,000 to about 330,000. The cars made at that plant — including the popular Sonata sedan and redesigned Elantra compact car — are sold in the U.S.
Without providing details, Krafcik said the company would find ways to sell more U.S.-made vehicles in the U.S. in 2012.
"We’re an optimistic company," he said. "We always find ways to get more and do more, even though right now we don’t know the answer."
In recent years, Hyundai has shifted its strategy from a focus on pure volume to a focus on quality, Krafcik said.
"The focus is building great cars, the focus is more on excellence for the consumer," he said. "From that will come profit and growth for the future. It’s a very thoughtful strategy."
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
braggslaw
Sat, Nov 12, 2011 : 12:57 p.m.
Hyundai will never build a manufacturing plant in Michigan. There is no way they give any foothold to the UAW.
wereintroubl
Sun, Nov 13, 2011 : 4:11 a.m.
I drive by the Chrysler, Ford, and GM operations in this state a lot. They employ a lot more people.
Dave
Sun, Nov 13, 2011 : 3:04 a.m.
Obviously wereintroubl has not driven by the Hyundai or Toyota facility. Last I checked, they pay workers in U.S. dollars, too.
wereintroubl
Sat, Nov 12, 2011 : 2:42 p.m.
I don't think it is the UAW as much as it is politics. When the transplants build a plant in the South, they are also buying the senators and representatives from that state. If you look at the spread of transplants, there are usually not more than one or two in any given state, unlike the concentration of the Big Three here. Also, the way these transplants are set up are very similar to a UAW plant including fixed wage scales and an internal greivance system which amounts to a company union. Back to the topic: I think the state should not be giving Toyota or Huyndai taxpayer dollars unless they are willing to build signifficant operations in the state, not a little office here and there. Unless these companies are going to build a manufacturing plant- the investment that is a real economic generator- there should be no incentives for what amounts to a token investment. Ford, GM, and Chrysler design, engineer, and build vehichles in this state and their economic generation is exponetially greater than Hyundai's and Toyota's. If anything, the state needs to continue feeding these businesses, not giving Toyota and Hyundai everything but the kitchen sink in the hopes that one day they will award the state with a real economic prize in terms of a manufacturing plant.
wereintroubl
Fri, Nov 11, 2011 : 6:02 p.m.
Who cares unless the plant is built in Michigan, although I did hear a rumor one of the closed GM plants in Pontiac is being retrofited for another automaker. If it is not in Michigan, I will still keep Hyundai on my "do not buy, do not rent" list.
Dave
Sun, Nov 13, 2011 : 3:02 a.m.
What a rust belt way of thinking. Who would actually want to build a new plant here? As long as this is not a right to work state, we can watch business go elsewhere.
Mick52
Fri, Nov 11, 2011 : 5:42 p.m.
Good news. Too bad the plant, if there is one, probably will not be in Michigan. The state needs to act on the pro union problem and allow companies to move into the state and operate union free. Maybe some foks would rather be unemployed with a union card in your pocket than employed in a non union job, but I prefer employment to unemployment. Maybe another Hyundai plant for Alabama where unemployed Michigan auto workers can move to for a non union job. Or Tennessee, where the VW plant went rather than Michigan.
wereintroubl
Sat, Nov 12, 2011 : 1:18 a.m.
None of the transplants will hire a former Big Three hourly employee. That is why the transplants are a zero-sum game. The only employees from the Big Three the transplants will hire are engineers and managers so they can mine the best practices of Ford, GM, and Chrysler. That is why toyota built their little engineering office in Ann Arbor and Hyundai built their testing building in the area.
Bertha Venation
Fri, Nov 11, 2011 : 9:53 p.m.
Absolutely. Unions drove jobs overseas in the first place. I still like my Hyundai better than any of the "Big Three" I've owned in the past.