(The Montgomery Advertiser posted the following story by Brett Clanton on its website on July 3.)
MONTGOMERY, Ala. — Officials with CSX Transportation are hoping Hyundai will depend heavily on area railroad lines to distribute vehicles made at its Montgomery plant. But Hyundai has not yet made its plans clear.
“(The Hyundai business) will hopefully be significant,” said John Sanford, director of industrial development for a Birmingham office of CSX Transportation. “I would anticipate the vast majority of their outbound vehicles will be transported on rail lines.”
Hyundai has said it will produce 300,000 vehicles a year at its $1 billion assembly plant now under construction in south Montgomery. While the South Korean automaker has said the cars will go to U.S. dealerships, it has not said whether the vehicles will be distributed by truck or rail.
Bill Lang, spokesman for Hyundai Motor Manufacturing Alabama, said company engineers still are working on a logistics plan.
Meanwhile, CSX still is waiting to see whether it needs to hire more area workers and add more rail cars. “I would hope we’d know something before the end of the year,” Sanford said.
Last year, when Hyundai leaders were scouting sites for their first U.S. plant, they made it clear to area officials that rail access was key, said Ellen McNair, director of corporate development and recruitment for the Montgomery Area Chamber of Commerce, who helped recruit the automaker.
“The fact that the rail line was at our site was a big advantage,” she said.
A CSX line runs along the western edge of Hyundai’s 1,700-acre plant site.
Sanford said CSX will build a 9,000-foot spur at the site to serve the plant.
Generally, automakers in the state use rail lines to move vehicles and depend on trucks to bring parts into the factory, said William Killingsworth, director of the office of economic development at the University of Alabama in Huntsville. But he said, “It’s my knowledge that no one has a definite picture of the logistical picture within the state’s automotive industry right now.” UAH is working on such a study that will be released next year, he said.
Jacksonville, Fla.-based CSX is the largest freight railroad in the eastern United States and the only carrier with lines in Montgomery. Company trains transport 6 million automobiles annually, or about one in three cars made in this country each year.
“General Motors is our largest customer. Period,” said Dan Murphy, a spokesman for CSX, which last year reported $424 million in net income.
The company’s nearest automotive handling facility is in Birmingham. That rail yard receives shipments from Ford, General Motors, Honda, Isuzu, Chrysler and Mazda. Mercedes Benz, which builds its M-Class SUV in Tuscaloosa, uses CSX for outbound shipments.
Hyundai will have a massive parking lot with room for 13,000 cars next to its area plant. But Lang said the idea is to move the cars, one way or another, as soon as they leave the plant.