EconSouth (First Quarter 2008)

Q & A

West Point Restarts Its Engines

aerial view West Point
Photo courtesy of City of West Point
West Point annexed 3,564 acres in 2007, an area that includes the Kia plant site. But since Kia announced its plans in March 2006, investors have snapped up another 1,300 acres.

The future of West Point, Ga., is a vast field of red dirt next to the interstate.

In February, more than a dozen con-struction cranes and fleets of earth movers crawled around a treeless 2,200-acre plain with a couple of metal building skeletons on it. Nearby, a huge, sculpted dirt pile will become an overpass spanning Interstate 85. Next to that, a new water tower is rising.

This site is the future home of a Kia Motors assembly plant that promises to create nearly more jobs than West Point now has people. The Korean automaker is scheduled to begin churning out midsized sport utility vehicles in November 2009. Already, the planned factory is transforming this old west Georgia textile town of 3,300 by the Chattahoochee River and the surrounding area known as the Valley.

"Landing these jobs is just fantastic for the economy of the whole area," said West Point City Manager Ed Moon.

With automaking come big changes
The projected impact of the new plant, according to data from a study commissioned by the Georgia Department of Economic Development, is enormous: 2,500 jobs at the plant itself, another 2,500 or so jobs at parts suppliers and other businesses, a $1.2 billion investment, production of 300,000 vehicles per year, and, all told, a $4 billion economic impact.

A land rush has already begun.

West Point city officials have seen development plans that include enough housing to double the city's population. Physically, West Point has already more than doubled: The city annexed 3,564 acres in 2007, an area that includes the Kia plant site. But since Kia announced its plans in March 2006, investors have snapped up another 1,300 acres for potential development, said West Point Planning and Development Director Sammy Osborne. The city has annexed acreage at the request of landowners who want city water and sewer service and police and fire protection, Osborne said.

West Point, Ga.
Population 3,352
Troup County population 63,245
Households 1,354
Median household income $31,886
Sources: Population figures are from 2006 U.S. Census estimates; household and income figures are from the 2000 Census.

West Point's City Council in January 2008 approved the preliminary master plan of a sprawling development that would encompass 756 single-family homes, 82 townhouses, and 10 acres for commercial development. Also, Kia suppliers are already moving in. In December, Georgia Gov. Sonny Perdue announced that parts supplier Sewon Precision of Korea will build a plant in nearby LaGrange that will employ 700 people.

The benefits run both ways
Closer to home, West Pointers are starting to routinely see strangers in local restaurants, such as the crews building the plant, roads, and other Kia-related infrastructure, Moon said. That infrastructure work is no small project.

Indeed, one of the reasons Kia decided to locate its first U.S. plant in Georgia is a $400 million package of incentives from the state and local governments that includes roadwork, a job training center, hefty tax breaks, and water systems, including the tank that will bear the Kia logo. In February, West Point finished designing a $10 million wastewater treatment plant twice the size of its existing facility. The new plant will require expansion as soon as it's finished in 2009, Osborne said.

All told, the city, whose fiscal year 2008 budget is $13 million, is doing about $20 million worth of water and sewer work before the Kia plant opens. Grants and loans from the U.S. Department of Agriculture and the Georgia Environmental Facilities Administration are funding some of those projects. City officials see ancillary development around the plant as crucial.

"We need some revenue and some growth to help pay back those loans and help build the city," Osborne said.

A dozen miles up the road, LaGrange is feeling Kia's presence too. A couple of parts suppliers, Sejong and DaeLim USA, have announced plans to employ a combined 325 people there. And the LaGrange-Troup County Chamber of Commerce recently hired a family support coordinator to help Korean families adjust to American life, said Jane Fryer, the chamber president. She said the staffer was guiding 52 families through such chores as acquiring Social Security numbers, enrolling children in schools, finding homes, and securing driver's licenses. Kia officials requested a non-Korean speaking support coordinator so the newcomers would more quickly learn English, Fryer said.

The likely economic jolt is particularly welcome in the Valley. Over the past 20 years, total employment in the three Valley counties—Troup and Harris in Georgia and Chambers in Alabama—grew a meager 13 percent, according to the U.S. Bureau of Labor Statistics. That growth rate stands in contrast with 60 percent for Georgia as a whole. Since 2000, the Valley counties have added fewer than 1,000 jobs (a less than 1 percent growth rate) while Georgia's employment increased 13 percent.

Facts About West Point
West Point was originally incorporated as Franklin on Dec. 26, 1831. On Dec. 24, 1832, its name was changed to West Point.
Fort Tyler, in West Point, was the last Confederate fort captured by Union forces.
James W. McClendon built the area's first textile mill and was West Point's mayor from 1865 to 1871. The mill eventually became part of WestPoint Pepperell, once a major regional employer.

Changing the economic engines
Like many Southern towns, West Point once lived by the loom. Founded by two veterans who fought for the Confederacy in the Civil War, homegrown textile giant WestPoint Pepperell once employed more than 10,000 people in the Valley, including hundreds at the corporate headquarters in downtown West Point.

"Most everybody over the years worked with WestPoint Pepperell in some form or fashion," said Osborne, whose parents lived across the street from one of the company's mills. "That's what kept everybody around here going for years. So Kia couldn't have come at a better time."

WestPoint International, as the company is now called, employs virtually no one in the Valley today, Moon said.

WestPoint Pepperell's fortunes, and by extension those of the Valley, have taken many turns in the past 20 years. After a highly leveraged hostile takeover in 1988, the company landed in Chapter 11 bankruptcy. It emerged from bankruptcy protection in 1992 only to end up there again in 2003.

The transformation of the U.S. textile industry exacerbated the firm's challenges. During the 1980s, thousands of manufacturing jobs throughout the textile industry began moving to lower-wage countries, a migration that continues. WestPoint International closed the last of its Valley plants over the past couple of years. Finally, in 2007, the company's New York-based parent, Icahn Enterprises, which bought the firm out of bankruptcy in 2005, shuttered the downtown West Point office building.

As the town's longtime economic bedrock slowly crumbled, most former textile workers in the Valley found jobs farther from home, in Columbus, Atlanta, LaGrange, and elsewhere.

WestPoint Pepperell wasn't just the area's biggest employer. It owned houses in mill villages and held mortgages that its employees paid. The company even once owned the West Point municipal water system, according to numerous reports.

Today, the city is hastily expanding that water system to serve the new company in what will once again be a company town. Only this time, the company is coming from far away.

This article was written by staff writer Charles Davidson.