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America's 'other' auto industry

In the South, host to foreign-owned plants, there is little sympathy held for Detroit.

By Staff writer of The Christian Science Monitor / December 5, 2008

Coming soon: A massive Kia manufacturing plant is going up in West Point, Ga. It aims to turn out its first model in about a year, and some 43,000 people applied for 2,600 positions.

Ace Aerial Photo/AP

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West Point, Ga.

The US auto industry is throwing bolts, but here in Georgia's Chattahoochee Valley a South Korean car company is building a massive new manufacturing plant along the new Kia Parkway, replacing abandoned textile mills. The recently opened Korean BBQ House now vies for customers with Roger's Pit-Cooked Bar-B-Que. And in an indication of just how welcome Kia's nonunion jobs are, some 43,000 people applied for 2,600 positions – with starting wages of $17 an hour – as the plant gears up to turn out its first model next November.

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The expansion of this "other" auto industry – one that's foreign-owned, nonunion, and based largely in the South – stands in stark contrast to this week's dire reports from America's own Big Three, whose CEOs laid out plans for a dramatic downsizing before traveling to Washington to plead for $34 billion in federal aid.

Two-thirds of "foreign imports" are, in fact, built in the United States in nonunion shops, where it costs at least $2,000 less in labor to build each vehicle.

Critics charge that the Japanese, Korean, and German auto companies are taking advantage of desperate communities and a longstanding distrust of unions in the South. But among people in West Point, Ga., the vision of a foreign-owned Southern car industry standing on its own two feet while Detroit teeters comes down to this: the worth of a day's work, and the role – or nonrole – of unions like the United Auto Workers (UAW).

"Workers [in the South] understand that in order for them to have a job these companies have got to make money, because if they don't, they're not going to have a job," says Rep. Lynn Westmoreland (R), who represents this river city in Congress and who could be asked as soon as next week to vote on a bailout to keep Chrysler and General Motors afloat. "That's the first issue [Detroit auto executives] need to address before they come to Congress asking for a bailout or a loan or whatever it is," he says in a phone interview.

Around the South and especially here on Interstate 85 – nicknamed the "autobahn" for the prevalence of foreign-owned car plants along its stretch – the manufacture of foreign vehicles has jumped 450 percent since 1986. While the Big Three have shed more than 600,000 jobs since 1980, foreign automakers have created about 35,000 jobs in the same period.

The gap between union and nonunion compensation is big: Total benefits put union workers at $36.34 per hour compared with $25.65 per hour. The Big Three's "legacy costs," some economists say, push UAW members' total compensation much higher. That gap, moreover, figures into Southern residents' views on Detroit's worthiness to be rescued from the brink of bankruptcy.