Sungwoo Hitech will produce stamped metal parts for GM – also vying for electric vehicle battery casing contract
TELFORD, Tenn. (WJHL) – More than 200 jobs are coming to the former Alo building at Telford’s Washington County Industrial Park (WCIP).
South Korean Tier 1 auto parts maker Sungwoo Hitech purchased the 375,000-square-foot building for $8.75 million July 12 and plans to invest more than $40 million to produce car parts that will go directly to General Motors vehicle plants.
It will be the global company’s first U.S. production facility and Northeast Tennessee’s first Tier 1 plant — manufacturers whose products go directly to automakers and not on to another company as lower-level components.
“About March we’ll hire many people,” Sukje “SJ” Lee, the local plant’s CEO, told News Channel 11 Tuesday in an exclusive interview. “At least 100 people next year. In 2023, I’m expecting at least 50.”
TNECD Commissioner Bob Rolfe said the launch of the new plant will boost job availability to local workers. He called Sungwoo “one of the great Korean companies” and said they could have selected any location in the U.S. for their first manufacturing here.
“They down selected to Tennessee and ultimately decided to call this area home and so we’re grateful,” Rolfe said at an announcement ceremony at Sungwoo’s new building Wednesday.
Lee called Wednesday’s official announcement “just the beginning.”
“We have several new programs (contracts) for electric vehicles from General Motors and we are striving to win more business from diverse customers,” Lee said during the celebration. “We really want to build (a) second and third plant and more of Sungwoo Hitech America here and we expect it will happen in the near future.
“Sungwoo Hitech America will make our best effort to successfully grow in the state of Tennessee.”
“Sungwoo Hitech America will pay at least $17 an hour to its workers for an average annual salary of $35,000 as part of an agreement with Washington County for some tax concessions. Sungwoo Hitech will make a great addition to our manufacturing sector. We appreciate the confidence the company has placed in our county and region.”Alicia Summers, Vice-President of Business Development the Northeast Tennessee Economic Partnership (NETREP).
Lee said Tuesday that production on the first GM contract — which is for the electric vehicle market — will begin in November 2022. Work on a second contract will start in January 2023.
SWH has a huge plant in Monterey, Mexico – three times the size of the planned operation here, Lee said. It plans to add to the initial capital investment at its Telford operation. Lee said that’s all new growth and it’s due to things he said set the company apart from competitors.
“I think our production line and efficiency, operation, efficiency for operation and then automation also,” he said. “Everything we thinking we are the best, really.”
The company dates back to 1977. It spent its formative years as a Tier 1 supplier for Hyundai and Kia. It now has a couple dozen locations in 10 countries, with more than $3 billion in annual revenues and 18,000 employees.
Hyundai and Kia have grown over the years, allowing SW Hitech to grow with them. But the company is diversifying its customer base.
“It’s not easy to survive only with Hyundai and Kia Motor,” Lee said Tuesday. “They help us a lot we have very good relation, but we need more customers to grow globally.”
The highly automated plant will use dozens of robots. Sungwoo is vying for another contract with GM and will know soon whether it’s won that — which would mean even more jobs.
Sungwoo is purchasing an option on additional acreage at WCIP and would put an additional building there if that contract comes through, Lee said.
ECD’s Rolfe said the work that went into attracting Sungwoo Hitech America to Tennessee can’t end if Northeast Tennessee leaders want any future expansions to occur in the region.
“When we do everything to bring a great company to our state, that’s just when the heavy lifting starts. It’s making sure that company thrives and is successful and has the workforce and has whatever they need to stand up those plants and make those enormous investments.
“And guess what, the great news is if we do a great job, the community does a great job, when it comes to Phase Two we’re right there in the middle of the conversation.”
Rolfe said that’s critically important. He said about 60 percent of ECD projects involve expansions of companies already in Tennessee.
Average wages are projected at $35,000 annually. Washington County commissioners approved a property tax incentive for the company in April. Lee said local governments and other leaders have been very helpful.
“We are very impressed, working together, especially county people they (are) helping us a lot. To purchase this building, also to start work here.”
Sungwoo captured new market share with GM. They’ll do it in a region of Tennessee that Lee told News Channel 11 doesn’t have a historically large presence in the Tier 1 auto supply world.
“We worried about (that),” he said. “But other than that I think quality of workers, we expect good.”
Lee said the company can look outside the area if it needs to for some of the higher-skilled jobs in the highly automated factory. But he said local workers who show aptitude and interest in some of the highest-paying, most complex production jobs could be trained on the job.
That contract is primarily for what Lee called “upper and lower body structure” for car’s exteriors.
“Most of underbody we build, and then upper body too. This plant (will) start with body structure.”
The company’s also wanted to diversify its product base beyond stamped parts like body structure – doors, quarter panels, etc. – along with bumpers.
Enter General Motors and also parts meant for the burgeoning electric vehicle market.
“Recently we started battery cases for electric vehicles.”
Lee said Sungwoo has always invested a lot in research and development.
“We have a great team in the engineering capability and so that makes us very competitive.”