Screenshot of promotional video for the Southern Virginia Mega Site.

We’ve all heard about “the one that got away,” be it that big fish we didn’t reel in, or that big game our favorite team couldn’t win.

Now Pittsylvania County can add another: a massive car plant that went to Georgia instead. Last week, the Richmond Times-Dispatch and Danville Register and Bee reported that the 3,528-acre Southern Virginia Mega Site at Berry Hill was a finalist for the $5.5 billion Hyundai electric vehicle battery plant that recently went to a site near Savannah, Georgia – and that the decision was, in the words of one local economic development official, an “extremely close call.”

This is a big loss – Hyundai will create 8,100 jobs in Georgia. How big would this have been? When then-Gov. Ralph Northam announced last fall that a medical glove manufacturer would build a plant in Wythe County, creating 2,500 jobs, that was hailed as the second-biggest manufacturing announcement in Virginia since the state started keeping track of such things in 1990 – and the biggest in rural Virginia. The adjective “massive” barely begins to describe this. The adjective “transformative” got used a lot in Georgia when the project was announced, and it’s easy to understand why.

On the other hand, this isn’t a big loss at all. You can’t lose something you never had. Technically, this is more of a missed opportunity, one that might come around again. The fact that the Pittsylvania County site made it to the finalist stage is encouraging – this suggests it will get strong consideration for other projects. I am reminded of Roanoke’s pursuit of breweries. The valley felt stung when it lost out to Asheville, North Carolina, on the bidding for Sierra Nevada in 2012 – a loss that, in hindsight, helped the valley position itself to beat out Asheville for the Deschutes Brewery in 2016. (Of course, Deschutes has yet to build in Roanoke and many are now skeptical it ever will, but that’s not the valley’s fault – that’s the fault of a changing craft beer market.)

Officials are naturally reluctant to talk about the Hyundai courtship but let’s look at what we do know – and what lessons we can draw from it.

  1. Site development matters. “I don’t think it was but a few small specifics” that made the difference, Del. Danny Marshall, R-Danville, told me. He told the Danville paper that one of those small specifics was that the Georgia site was more graded than the Virginia one. This matches what Hyundai said. The company cited “speed-to-market, workforce, and the state’s ability to meet the company’s carbon neutrality standards” as factors in picking Georgia. I have a hard time believing that Virginia, with its Clean Economy Act, is somehow behind Georgia on carbon neutrality, so that leaves speed-to-market – and workforce – as the key factors. Of the two, workforce is harder to measure while speed-to-market is a more quantifiable figure. Fortunately, this is something that Virginia is trying to work on. Virginia is late to the site development arms race – the Senate Finance Committee was told last fall that Virginia was spending $5 million a year on site development, Georgia $66 million, North Carolina $80 million. The state budget that General Assembly budget negotiators released Sunday raises that to at least $109 million over the next two years. (with the prospect of raising it to $159 million if revenues allow). That’s too late for Pittsylvania County this time, but maybe not next time. A state report released last year found that “in just the last few years, Virginia’s lack of prepared sites has contributed to the loss of projects representing more than 39,000 direct jobs, 75,000 additional jobs, $55 billion in capital investment, and more than $235 million per year in new state general fund revenue.” Sounds like we can add 8,100 more jobs to that accounting. Still, if site development was truly the deciding factor here, we can take some solace in the fact that it’s a problem that’s about to get fixed. Gov. Glenn Youngkin rarely gives a talk about economic development without mentioning the need for more site preparation. This seems a problem he is focused on. Of note: So are other states. The Triangle Business Journal reports that “North Carolina is quickly running short on supply” of so-called mega sites and so wants to build more.
  2. Georgia had some advantages we didn’t. How much of a difference they made, we don’t know, but they are undeniable advantages. First, the Georgia site is adjacent to one interstate (Interstate 16, which links Savannah east-west with Macon) and near another (the north-south Interstate 95). There are no interstates through Danville and Pittsylvania County. Hyundai also already has a presence in Georgia, with one manufacturing plant in West Point, Georgia, and another in Montgomery, Alabama. Savannah fits comfortably within the company’s existing footprint. (Other sites said to be in the running were in North Carolina, South Carolina and Tennessee, so this was very much a Southeast-focused search.)

    The Atlanta Constitution-Journal, in a behind-the-scenes story about Georgia’s courtship of Hyundai, also emphasizes how Gov. Brian Kemp has a longstanding personal relationship with Hyundai Motors chairman Euisun Chung. “Shortly after his election, Kemp traveled to South Korea on his first overseas trade mission as governor, where he spent a day at Kia’s test track and bonded with Chung at an upscale restaurant overlooking downtown Seoul,” the paper reported. “And when Chung was promoted to become Hyundai’s co-chief executive in 2020, Kemp fired off a congratulatory letter that sparked a friendly new series of exchanges.”

    It’s hard to know how much these personal relationships matter – and I’ve been around the news business long enough to know that politicians (and their staffs) often overstate their roles when the real work is being done by civil servants. Still, I have to wonder: Did Virginia’s election schedule hurt us here? The Atlanta paper reports that Georgia’s talks with Hyundai didn’t begin until December and even then the state didn’t know which company it was talking with – early conversations were apparently between intermediaries, which is often customary. In December, Virginia was in the midst of a gubernatorial transition. That wouldn’t have mattered to the Virginia Economic Development Partnership, but it might matter if you have a changing cast of characters in political positions higher up the food chain.

    3. Electric vehicles are a big deal. Politicians can argue all they want about green energy, climate change or anything else, but the free market is settling this argument every day. Electric vehicles are where the action is in the automotive industry. Last fall, Ford announced it’s building three new plants – in Tennessee and Kentucky – all related to electric vehicles. That’s 10,800 jobs. Toyota announced it’s building an electric vehicle battery plant in North Carolina – 1,750 jobs – and expanding production at existing plants in North Carolina and West Virginia. In December, Georgia announced another big “get”: Rivian, a California-based electric car marker, said it will build a plant in Georgia, creating another 7,500 jobs. (More on Rivian to come.) Now Hyundai drops this battery manufacturing plant in Georgia. Every automaker is getting into the electric vehicle market. Volvo, in Pulaski County, recently landed an order for electric trucks. And now CNN reports this: “Google search interest for electric vehicles reached a record high in the U.S in March, as gas prices skyrocketed, though it doesn’t mean consumers are actually buying them. But Volkswagen has already sold out of electric vehicles in key markets this year, reflecting both soaring demand and supply chain constraints.”

There are some ironies in all this. All these plants, you’ll notice, have gone to red states that officially don’t show much interest in green energy. WABE-FM, a public radio station in Atlanta, points out that “while Georgia has welcomed the growth of the clean energy industry, it has done little, politically, to address climate change, and it’s not particularly friendly towards electric vehicle drivers. A state tax credit for people buying new electric vehicles was allowed to sunset, and was replaced with an additional fee charged to EV owners in Georgia.” Nonetheless, Georgia is now becoming a center for electric vehicle plants. You have to wonder when that emerging cluster of electric vehicle makers is going to cause the state’s conservative politicians to decide that maybe electric vehicles aren’t such a bad thing, after all. Speaking of that cluster …

4. This is bigger than a single plant. Yes, this plant is staggeringly huge, but we’re really talking about the growth of an industry cluster in Georgia. In a statement, Hyundai said it “also aims to establish a stable supply chain and build a healthy EV ecosystem in the U.S.” We know that success attracts success. The odds are that Georgia will now see more electric vehicle-related jobs. Virginia has its own transportation cluster centered in the New River Valley that accounts for 79,000 jobs across Southwest and Southside – Virginia Tech is in the running for a $75 million federal grant to help expand it. That grant would be a glorious thing to win, but imagine what a $5.5 billion plant would do. My point is not to get jealous about Georgia (although there is that) but to point out how just a single “win” can translate into other wins. How soon can that site development money get here?

  1. Economic development is bipartisan. Kemp is a Republican, but multiple reports say the state’s two Democratic senators – Jon Ossof and Raphael Warnock – were also involved in talking with Hyundai. And the announcement of the Georgia deal was timed to coincide with President Joe Biden’s visit to South Korea, so that he could personally thank the Hyundai chairman. And that brings us to …
  1. It’s not politically smart to run against jobs. There’s long been a leftist part of the Democratic Party that sees big corporations as inherently evil. Now there’s a rightward fringe of the Republican Party that seems to be coming to the same conclusion, just from a different point of view. In Georgia’s recent Republican primary for governor, Kemp faced a challenge from former U.S. Sen. David Perdue, who was strongly backed by former President Donald Trump. Perdue, oddly, spent much of his campaign running against that Rivian electric vehicle plant coming to Georgia. Yes, here was a politician running against a company that’s talking about creating 7,500 jobs in rural Georgia. “It’s a woke California company whose mission is to turn the world green,” Perdue said. “They aren’t interested in this part of the country. They just want to make money off of us.” Umm, yeah, that’s kind of how capitalism works. Who cares if the company is “woke”? Republican voters – Republican voters – in Georgia sure didn’t. The Rivian plant will span two counties. In Morgan County, Kemp took 68% of the vote. In Walton County, he took 77.9%. As a political observer, I’d love to see the spectacle of some candidate running against a company that wanted to bring 7,500 manufacturing jobs to rural Virginia – it would be quite entertaining.

First, though, it sounds like we need some more bulldozers out at that Southern Virginia site. Here’s an idea for a photo op: Gov. Youngkin should show up to drive the first one. 

Dwayne Yancey

Yancey is editor of Cardinal News. His opinions are his own. You can reach him at dwayne@cardinalnews.org.