HMMA 2014 Economic Impact Study Released – Impact Up $1 Billion since 2010
MONTGOMERY, Ala., August 6, 2015 — Hyundai Motor Manufacturing Alabama (“HMMA”) today announced the findings of an economic impact study that it commissioned quantifying the automaker’s impact on the economy of the State of Alabama in 2014. Conducted by M. Keivan Deravi, Ph.D., Dean of the College of Public Policy and Justice and professor of economics at Auburn University at Montgomery, the study finds that HMMA and its suppliers generated a total impact of $4.82 billion to Alabama’s economy in 2014, accounting for 2 percent of the state’s Real Gross Domestic Product. Additionally, HMMA and its suppliers were responsible for more than 38,000 full-time equivalent jobs statewide in 2014, 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 located in Alabama during the past 16 years, including two other automakers and Northrop Grumman. “HMMA has contributed to a 15.2 percent growth rate in manufacturing employment in the Montgomery Metro Area since the plant broke ground in 2002.”
Specific to public fiscal impact, the study estimates that HMMA and its suppliers yielded $80.7 million in total tax revenue to state and local governments in Alabama in 2014. HMMA’s local tax impact was approximately $10.7 million, while HMMA and its suppliers generated an estimated $70 million of tax revenue for the state.
“Hyundai Motor Manufacturing Alabama could not be more pleased with our contributions to Alabama’s economy and employment,” said J.H. Kim, 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.”
Key findings of the report include:
Earnings and Employment
- As of 2014, HMMA employed 3,732 people (full-time and temporary) and had an annual payroll of $260 million, $44.1 million of which was benefits ($216 million payroll).
- HMMA’s Tier 1 and 2 suppliers collectively employed 8,900 in Alabama, with an annual payroll of $225.5 million in 2014.
- Combined, HMMA and its Tier 1 and 2 suppliers provided direct employment of 12,634 and produced a direct payroll of $441.4 million in 2014.
- HMMA’s earnings and employment impacts in 2014 were $676.6 million and 14,436 employees, while its Tier 1 and 2 suppliers’ impacts were $691.3 million and 23,855 full-time equivalent jobs.
- Combined, HMMA and its suppliers were responsible for more than $1.4 billion in earnings (payroll) and more than 38,000 full-time equivalent jobs in 2014.
- Of HMMA and its suppliers’ total economic impact in 2014, 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 $1.8 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 2014, HMMA spent a total of $6.3 billion to support its manufacturing operation and maintain its facility and investment, with approximately 49 percent of this total spent in the form of purchases from Alabama-based businesses.
- HMMA spent $2.5 million on capital acquisition, construction, building improvement and development costs in 2014.
- In 2014, HMMA purchased $3.1 billion in goods and services from Alabama-based businesses.
- HMMA’s Tier 1 and 2 suppliers had total sales of $5.2 billion in 2014, 50 percent of which were accounted for by HMMA purchasing.
- HMMA’s Tier 1 and 2 suppliers’ non-payroll expenditures were $1.0 billion in 2014, 56 percent of which ($557.8 million) was purchased from Alabama-based businesses.
- HMMA and its Tier 1 and 2 suppliers were directly responsible for a total of $2.1 billion of net additional demand for goods and services in Alabama in 2014.