Montgomery Business Journal

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Working at Hyundai has its Benefits:

Celebrating Ten Years of Hyundai Production in Alabama

May 2015

By David Zaslawsky    
Photography by Robert Fouts

A production job at the Hyundai Motor Manufacturing Alabama plant in Montgomery is truly not for everybody.

It’s a modern-day factory job. “It’s hard work,” said Rick Neal, senior vice president of human resources and administration for HMMA. It’s not only repetitive working in general assembly, but employees rotate shifts every month and there are three shifts: Days, swing and nights. And employees must be on time because the assembly line is moving.

“The whole process is not easy,” Neal said. “It’s very difficult and not everybody is cut out for it. A lot of folks who get hired think, ‘I’ve got all these great wages and benefits and I’m just going to cruise.’ And then they suddenly find out how difficult it is and they can’t do the work or they can’t follow the policies and pretty soon they are out the door.”

The ones who stay – the ones who can handle the work and policies – are rewarded with top wages and a generous benefit package.

“I don’t think there is a private employer that pays as well as we do or offers the wide variety of benefits that we provide,” Neal said. Of course, a senior Hyundai executive cannot be objective, but don’t just take his word for it. Consider this: The average gross wage last year for a production employee (HMMA calls its employees team members) including overtime and incentives was $67,571.80. The average gross pay last year for maintenance employees, who make sure the machines and robots are running smoothly, was $96,142.41, including overtime and incentives.

That’s right. For enduring a job that is not for everybody and really is hard work, a production employee can make close to $70,000 a year and a maintenance employee can earn nearly six figures. Those who can handle it “have an excellent career,” Neal said.

Those average annual wages do not include a host of benefits that add up to a considerable sum of money, but more on that later.

Neal said those average gross wages were not a surprise. Before adding 877 employees for a third shift, production team members worked “substantial amounts of overtime,” Neal said. Back in 2011, average annual gross wages for production employees were almost $75,000 and just shy of $100,000 for maintenance employees.

That third shift was added to reduce overtime and the fatigue factor on employees as well as increasing production capacity, Neal said. “The company gets more cars and it’s easier on team members,” he said. It’s a win-win for HMMA, which produces the Elantra and Sonata, the company’s top two sellers in the country, which typically account for about two-thirds of all Hyundai vehicles sold in the U.S.

This is a company that pays its employees incentives just to show up to work on time and work their full shift. It’s that critical to producing nearly 400,000 vehicles a year. On the assembly line, all jobs are important and all employees are important and need to show up and perform.

The attendance incentive works like this: If an hourly production employee has zero unexcused absences (tardy or leaves early) they receive an incentive of 2.5 percent of their base wage plus overtime. Close to half of the production employees (44 percent) received that extra money. If a production employee has one unexcused absence, they receive 1.25 percent of their base wage plus overtime. If a production employee has two unexcused absences, they receive 0.6 percent of their base wage plus overtime.

There is also a “Hyundai Attendance Incentive Credit.” The production employees have a 38-hour, 45-minute work week, but receive credit for 1 hour, 15 minutes per week for perfect attendance. The policy was implemented when production went to a three crew, three shift operation in September 2012. “We wanted to make sure that the team members would be made whole for a 40-hour week,” Neal said. Once again, it’s just a matter of showing up on time and working a full shift.

When production employees work the second or third shifts (evenings and nights), the company pays a shift premium of $1.10 per hour.

There are opportunities for those working the last shift of the week, which is the night shift, which starts 10:30 p.m. Friday and ends 6:45 a.m. Saturday. If there was some down production time, those third shift workers may work two hours of overtime. “That’s the only time during the regular work week where there is an opportunity for overtime,” Neal said.

The plant did run 14 overtime days last year and is scheduled for the same number of Saturday overtime days.

Hyundai has a discretionary incentive called an annual achievement award. “It’s based on our productivity and meeting our targets; meeting our quality goals,” Neal said. He stressed that the incentive is not given every year, but was the last two years. Each of about 2,300 full-time production employees received $4,000 in both 2013 and 2014. That runs into the millions of dollars.

In early March, Hyundai employed 3,607, which included 2,902 full-time workers; 657 temporary workers and 48 Korean expatriates. The headcount constantly fluctuates up and down. The Korean automaker’s annual payroll is $260 million.

Let’s talk about health insurance premiums. How does HMMA stack up? Pretty well, by paying 93 percent of an employee’s premium whether it’s for single coverage or family coverage.

Let’s say an employee wants to buy a new Hyundai at Capitol Hyundai. The employee discount is 23 percent to 27 percent off the manufacturer’s suggested retail price (MSRP). That meant in March, an employee could have purchased a 2015 Sonata SE for $16,302 that had an MSRP of $21,150. A 2015 Sonata Limited for an HMMA employee was $19,041 back in March for a vehicle with an MSRP of $26,525. The prices are subject to change.

The program – “Hyundai Circle Plan” – actually permits a HMMA employee to buy up to four vehicles a year for themselves and immediate family members. There is also a discount buying plan for an employee’s other family members and friends.

An employee receives two weeks of vacation after 90 days and adds one vacation day a year starting the second year of employment. It adds up to 20 days (four weeks) after 10 years. There’s more. There are 14 paid holidays a year, which includes up to six days off for the annual winter shutdown. Add three personal days a year and that’s 37 paid days off after 10 years.

“If an individual chooses not to use all their vacation and personal days, they receive that (amount) in the form of a check after the year is complete – usually in February,” said Robert Burns, senior manager of public relations for HMMA.

Most workers buy clothes for their jobs, but not HMMA employees. They receive 10 team wear items – shirts and pants – at no charge. For the production employees, they can replace their team wear each year while administration employees can replace items every 18 months. Hyundai will provide an employee $75 if they are required to wear steel-toed boots.

If you get sick at work or injured in an accident, you visit an onsite doctor or nurse practitioner/physician assistant. No charge for that and the service is available 24/7. Free flu shots are available annually, typically beginning in October.

Hyundai operates two cafeterias – one in the administration building that seats 400 people and one in general assembly that accommodates 700 to 750 people. There is something for everybody and that includes a meat-and-three; salad bar; pizza station; sandwiches; two different soups daily; Korea/Asian station; and hot grilled items. A full meal costs between $5 and $7. “Oftentimes I go down and just get a large bowl of soup and that runs $2.40,” Neal said.

Other employee benefits include:

> A 100 percent match up to a 4 percent 401(k) contribution.

> Life insurance at two times an employee’s base salary at no charge.

> Accidental death and dismemberment insurance at two times an employee’s base salary at no charge.

> A sports complex with a softball field, basketball courts, tennis court, walking trail and children’s playground.

> A fitness center.

> An onsite Wells Fargo branch.

On top of all this, the company gives small gifts to employees. “When the company achieves some milestone event, whether it’s a quality award or a productivity award of meeting some FTT (first time through) target – we like to show our appreciation by providing small gifts,” Neal said. Those small gifts have been HMMA jackets, hats, folding chairs, grills, beach towels, coolers and weather radios.

The company recognizes team members with birthday cards while giving a baby gift for team members’ newborns and bereavement flowers for a death in an employee’s immediate family.

Those are some small things, but HMMA does something unparalleled by sending employees to Korea at an average cost of $5,000 per employee. “I know of no other foreign transplant that sends a group of team members on an annual basis for what amounts to a free, all-expense-paid trip halfway around the world just to experience the Korean culture,” Neal said. The week-long trip is in addition to an employee’s vacation time. The company expects to send three groups of about 30 employees to Korea this year and to date has sent nearly 1,300 employees.

To again show appreciation to its employees, Hyundai provides special meals once or twice a year and those meals are special – filet mignon and grilled shrimp or prime rib and lobster. Those special meals are served to all full-time and part-time employees as well as contractors and vendors. That’s around 4,500 meals of prime rib and lobster. Those are free.

In addition to the special meals, there is the annual “Team Member Appreciation Day,” which Neal said “is for the express purpose of showing our team members how much we appreciate their dedication and hard work.” The event has been held both onsite when HMMA transforms some property into a carnival with inflatables for children; food and drink; and even musical acts. The event has also been held at the Alabama National Fair and team members and their immediate family members receive free admission and a $10 food coupon per person.

Neal stressed that the company’s work environment is “harassment-free, discrimination-free; and violence-free. We don’t put up with any nonsense in that regard.”

Another huge benefit – think of winter and summer in Montgomery – is heating and cooling 3.2 million square feet under roof. “We try to maintain a constant temperature of 74 degrees in the plant so that our team members, while they’re doing hard work … can do it in comfortable conditions. And you know as well as I do, when it gets to be 100 degrees in the summertime, 74 feels pretty good,” Neal said.

It certainly does for the employees and having the plant at 74 degrees feels pretty good to Alabama Power, too. The electric bill is “large,” he said. “I can say that Alabama Power is very happy to have us as a customer.”

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