This is the third of eight articles in the Investing in America 2024 special report that will publish in full on Tuesday 10 December
To Daniel Ryu, there are few places more quintessentially American than Kokomo in Indiana. The birthplace of the automobile, the Midwestern city is a factory town, where unions are strong, and locals abide by a “you buy what you build” mentality.
“This is like real America,” Ryu says, seated on the upper floor of the First Evangelical Presbyterian Church. His father, Joshua, uses the sanctuary as a leader of the Glory Church, a Korean house of worship, for services with about 10 Korean attendees.
Ryu, a 25-year-old Korean-American engineer, grew up in Fullerton, California, a town more closely associated, historically, with Asian-American immigration. But he moved to the small town north of Indianapolis last year to take a managerial role at Starplus Energy — a $6.3bn joint venture between Samsung and Stellantis that is poised to transform Kokomo into the battery epicentre of the Midwest.
Soon after arriving, he landed his brother a job and, by September, their parents had joined them to start a church for families like theirs: newly settled Korean-Americans, or Korean expats, working at the battery plant.
“We just want them to know they are welcome here,” says Perry Martinson, a GM engineer and elder at the Presbyterian church, which recently figured out how to display the Korean alphabet on their digital sign. The authorities estimate up to 800 Korean nationals have arrived since Starplus announced the venture in 2022, more or less doubling the town’s Asian population.
Kokomo is one of more than a dozen towns across the US that have been transformed and revitalised by an influx of investment from South Korea.
Korea has become the leading foreign investor in greenfield facilities in the US, led by its auto and electronics manufacturers such as Hyundai, Kia, LG and Samsung, with commitments totalling $21bn last year, the highest level in more than a decade.
But the towns that have benefited are far from the large coastal metropolitan centres where Korean-Americans have traditionally immigrated. In cities like Kokomo, and Savannah in Georgia, and Auburn in Alabama, Korean-Americans have brought their customs and cultures to unexpected corners of the country.
In Savannah, where Korean automaker Hyundai is building its $7.6bn electric vehicle plant, the city estimates it has welcomed hundreds of Korean workers, along with their families. A large Asian grocery store and a couple of Korean churches opened over the summer. Meanwhile, in Taylor, Texas, the economic development agency is in talks with Korean restaurants interested in catering to demand from Samsung’s $40bn chip fabrication plant.
“This is a once-in-a-lifetime opportunity for Korean-Americans to redefine their role in American identity,” says Jae Kim, president of the Southeast US Korean Chamber of Commerce, who has helped “hundreds” of Koreans move to Savannah to work at Hyundai. His cousin, James Chin, moved from Boston with his wife and daughter to manage the plant.
In Kokomo, the transformation can be seen on almost every street corner. Seven Korean restaurants have arrived in the past year in a town where none had previously existed. New hotels catering to Korean expats offer slippers and chopsticks, and the country club is undergoing renovations to attract Korean golfers.
The city’s chamber of commerce has hosted workshops for first responders, hospitality staff and business owners on Korean customs, etiquette and food.
“It’s allowed us to save historical buildings,” says Scott Pitcher, 70, a former Chrysler worker turned real estate developer dedicated to preserving Kokomo’s downtown. “We couldn’t make the math work beforehand but, now, with the rates we’re getting, it’s economic,” he says.
In October, Pitcher unveiled Sute, an upmarket Korean restaurant housed in a once-abandoned warehouse and equipped with a karaoke system, where the mayor had recently done a rendition of a Spice Girls song with Korean executives.
Pitcher wants to build a Korean grocery store and barbershop, along with additional housing in a plan he has dubbed “Kokotown”. His partner is Sean Park, who moved to Kokomo last year from Seoul with his wife and four-year-old daughter after hearing about Starplus.
“Why not build a little Koreatown here?” Park says. “That’s the vision.”
The influx could not come at a more opportune time. The city was hit hard by globalisation, losing a fifth of its manufacturing workforce between 2000 and 2005. That year, Delphi, its second-largest employer and the largest US auto parts supplier, went bankrupt, laying off thousands of workers.
The global financial crisis that followed was even more debilitating. Two of Kokomo’s other major employers — General Motors and Chrysler — also filed for bankruptcy. At one point, 40 per cent of houses were foreclosed and unemployment had soared to more than 20 per cent. In 2008, Forbes declared Kokomo one of America’s fastest-dying towns.
“You never would have thought GM would have closed the way it did,” says Sunah Flores-Guillaume, one of the few longtime Korean residents in Kokomo whose husband had been laid off at Delphi. “You never would have thought [Chrysler] would shut down so many of its factories.”
Sixteen years later, the city is growing, rescued by the US’s 2009 auto bailout and investment from Chrysler’s parent Stellantis. New factories are being built by Starplus and its suppliers from Korea, including Jaewon, Junho and Soulbrain. Flores-Guillaume’s son has just been hired at Starplus.
“It feels like a new era,” says Lori Dukes, chief executive of Greater Kokomo Economic Development Alliance, sitting in her office, a former GM building. Paul Wyman, Kokomo’s county commissioner and real estate developer, puts it more succinctly: “Forbes got it wrong.”
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Kokomo has been helped by Indiana’s economic development agency, which offered Starplus $363mn in incentives and has recruited Korean investors for years before the Starplus deal was finalised.
Other towns in the state are also poised to experience a Korean boom. Two hours north of Kokomo, in New Carlisle, Samsung is building a $3bn battery factory with GM. An hour west, SK Hynix is building a $3.9bn packaging plant for semiconductors. Last year, Indiana ranked second of all US states for South Korean projects and opened an office in Seoul.
Kokomo, and Indiana more broadly, are being helped by the shifting geopolitics of investment policy — much of which is being driven by US concerns about reliance on Chinese suppliers.
The growing alarm about Chinese competition was one of the prime drivers of President Joe Biden’s two signature economic initiatives — the Inflation Reduction Act and the Chips and Science Act — which together offer hundreds of billions in federal incentives for companies to build “clean tech” facilities and semiconductor plants in the US to limit reliance on China.
“The current tension between the US and China is like a protect[ion] for Korean companies to grow without competition with China,” argues Gary Park, chief operating officer at Absolics, a Korean semiconductor parts manufacturer under SK Group, which was preliminarily awarded $75mn from the Chips Act to help construct its $600mn factory in Covington, Georgia.
One of the earliest of the new Koreatowns was established in Georgia’s biggest city: Atlanta. It now has one of the largest Korean populations in the country. The state set up an office in Seoul in 1985 and 11 years later secured its first Korean investment with SK Group, a $1.5bn plant east of Atlanta.
“Then, nobody [was] here; it was the middle of nowhere,” says Absolics’ Park, who helped SK identify the site in the 1990s. Many Americans he met back then did not know where South Korea was.
Since SK’s initial investment, Korean manufacturers have injected billions of dollars into Georgia, including Kia in 2006 and solar panel manufacturer Q-Cells in 2018, both in towns about a 90-minute drive from Atlanta. That same year, SK On announced it would invest $1.7bn to manufacture batteries in Commerce, Georgia, two hours east of Atlanta, later expanding its commitment to $2.6bn and creating 2,600 jobs.
The announcement prompted Robert Kim, who immigrated to Atlanta when he was 14, to open Mr K BBQ to serve lunch to SK workers. When he learnt that Samsung was going to Kokomo, he opened a restaurant there as well, delivering 800 meal boxes a day to its employees. He would make 20-hour road trips every week to deliver Korean groceries from Atlanta, where ingredients such as sesame oil and noodles were better quality. “It’s kind of overwhelming at this point,” said Kim.
Atlanta authorities estimate there are now more than 100 Korean churches and hundreds of Korean restaurants, bars and karaoke lounges in the region. The Korean population in Gwinnett County, part of the Atlanta metro area and hailed as the “Seoul of the South”, has nearly quadrupled since 2000, and many residents, including Park’s wife, can get by without knowing English.
“The big thing is I don’t miss my country that much,” said Sang Hee Jung, a training co-ordinator at SK. Jung finds her Korean community at church, a Korean Baptist congregation recommended by a colleague. Jina Park, a lead engineer at SK, feels the same. Her daughter is four, and she plans to enrol her in Korean language programmes. “I want her to learn my culture and my people,” Park said.
But whether places like Kokomo can replicate Atlanta’s success is open to question. Many workers in smaller towns only come for fixed periods of time. “After supporting operating, then they come back to Korea,” says Matthew Choi, Starplus’ chief procurement officer who moved with his wife and daughter on a four-year deployment. Most of Starplus’ 2,800 jobs will be locally hired.
There are also challenges. Average rents in Kokomo have risen 23 per cent year on year, according to property website Zillow, and many lower-income residents say they are being pushed out of the city.
“People just can’t get back on their feet when you take them out of their house,” says Cassandra Brown, 38, who works as a receptionist at Comfort Inn for $12 an hour. She moved out of Kokomo this year after her landlord raised her rent by $125. Tyler Moore, Kokomo’s mayor, says the city is helping support six housing developments, potentially delivering up to 1,300 units in the next 18 months. Moore estimates the city could grow by 5,000 by 2030.
There have been signs of backlash against Korean arrivals in some quarters, with criticisms that non-unionised foreign workers are undercutting longtime residents.
“They’re sending people from overseas; they’re not creating jobs for us,” says a member of the UAW 686 union, who was recently laid off by Stellantis.
And Tom Harrold, a real estate agent who helped Kim locate Mr K BBQ in Kokomo, wonders how sustainable it will prove. “What happens to Kokomo, Indiana, if electric vehicle battery manufacturing doesn’t work?” he asks. “People are looking for jobs that might be displaced by Koreans.”
There is added uncertainty with the upcoming change in the White House, given President-elect Donald Trump has voiced opposition to EVs and vowed to undo legislation providing subsidies for them. “Only certain thing about Trump, his uncertainty,” warns Huiling Zhou, an EV analyst at BloombergNEF. “Trump could throw South Koreans under the bus.”
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