Kia Motors Corp. insists its $1.2 billion plant under construction in West Point, GA, will open on schedule in fourth-quarter 2009 and that no delays are foreseen.
A Kia spokesman at the auto maker’s Seoul headquarters refutes a recent report in the Atlanta Journal-Constitution that construction is behind and production will not begin until 2010.
“It’s just speculation from security analysts,” the spokesman tells Ward’s. “Our official position is that the Georgia plant will open on schedule. Construction is under way, and we’re making preparations to pour the foundations at the plant site.”
The newspaper quotes analysts who say the plant should have been completed within two years of its March 2006 announcement and that production should be starting in 2008, rather than 2009.
Further, they says the construction start was delayed because ofAutomotive Group Chairman Chung Mong-koo and his son, Kia President Chung Eui-sun, both of whom came under investigation in South Korea for corporate corruption. The senior Chung has petitioned the Seoul court to suspend his 3-year prison sentence in the case.
The Kia spokesman says the only thing that was delayed was the symbolic plant ground breaking and that everything else has been on schedule.
“Nobody expected the plant to be operating in 2008,” he says. “We have always stated it would not be completed until 2009. I am not sure about the analysts’ plant construction expertise. I can say that our Slovakia plant took more than two years to build, and we were faster than most competitors who have built plants of that capacity.”
Kim Deuk-ju, director of the treasury group within Kia’s financial division, also says the plant will be completed in final-quarter 2009.
“Mr. Kim is an executive at the director level…and can speak credibly about financing and scheduling of the West Point plant,” the spokesman says.
The newspaper story also quotes a Kia Motors America Inc. spokesman as saying the plant will open in 2009 as scheduled, as well as Georgia Gov. Sonny Perdue’s press secretary, who says the same.
However, one of the analysts quoted in the story contends Kia has extra capacity in Korea and does not need the U.S. plant at this time.
“That is not credible,” the Kia spokesman says. “The analyst obviously doesn’t understand the reasons why it is vital for us to have our own plant located within (the U.S.) market.
“With respect to having open capacity in any of our plants, it would depend on the particular plant and its products and the timeframe,’ he adds. “There is no automotive plant anywhere in the world that can run at full capacity all of the time.”