Hyundai Tier Supplier Mobis Expands in Alabama

---

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated, Houston, Texas). Tier supplier, Hyundai Mobis' new Alabama plant, Mobis Alabama (Montgomery, Alabama) (Plant 1060088), which was just completed in August of last year, is expanding, this time doubling its original size. The original plant, constructed by James N. Gray (Birmingham, Alabama), was scheduled to be 400,000 square feet, employing 430 employees, with plans for an eventual expansion. However, Mobis recently found itself in fast-forward mode and decided that an immediate expansion doubling its original size and adding 550 employees would be necessary, after it was awarded a second contract from Hyundai Motor Manufacturing Alabama (Montgomery, Alabama) (Plant 1057265).

The contract to make injection molded parts, such as instrument panels, center consoles, and bumpers for two Hyundai models, the 2005 Sonata, and the 2006 Santa Fe, has an interesting history. The contract had been awarded in February 2003 to Venture Industries (Fraser, Michigan), which declared bankruptcy about the time the steel went up on a new $100 million, 670,000 square foot plant it was building in Prattville, Alabama. Despite all efforts, Venture was unsuccessful in its attempt to save its Venture Alabama LLC plant (Plant 1061129), in spite of the fact that it was a separate legal entity incorporated in the state of Alabama.

In November, Hyundai appealed to the court to rescind the previously awarded contract with Venture, worth about $200 million a year. When court permission was granted, and after careful consideration, Hyundai, which makes no secret of demanding that its suppliers hold up their end of the bargain by not delaying Hyundai's eminent production schedule, opted to award the contract to an old and trusted compatriot (and nearby) supplier, Hyundai Mobis.

Other frontrunners for the contract were Collins & Aikman (NYSE:CKC) (Troy, Michigan) and Canadian giant, Magna International (NYSE:MGA) (Aurora, Ontario), through its exterior plastics division, Decoma International Incorporated (NASD:DECA) (Troy, Michigan) and its interior plastics group, Intier Automotive Incorporated (NASD:IAIA) (Novi, Michigan). Magna was asked by Hyundai officials to bid on the contract after the automaker became aware of reports about problems in cost and quality at Collins & Aikman.

Original constructor, James N. Gray, will perform the $30 million expansion in two separate phases. Phase 1 will be Mobis Plastics, which will begin almost immediately, and for which bids have already gone out. It will include a paintshop and injection molding equipment, which will come from Korea. Phase 2 will be RDC Mobis, which is expected to begin after Phase 1 is under construction, probably later in the summer.

Hyundai Mobis is South Korea's largest auto parts maker. Mobis intends to set 2004 as the first year of an expansion plan that will boost it into the global Top 10 automotive suppliers, concentrating mainly on the Mobis Alabama LLC and its Chinese interests.

Check out Industrialinfo.com's new Automotive Database, featuring the most recent automotive manufacturing and tier supplier plant and capital project spending data and news coverage.