Questions still linger: Why did Hyundai nix Mississippi?

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Posted 8:48AM on Wednesday, April 17, 2002

JACKSON, Miss. - An influential lawyer who participated in Mississippi's final discussions with Hyundai Motor Co. in South Korea says it appeared the automaker had ruled out the state before the meeting even started. Pascagoula attorney Richard Scruggs joined Gov. Ronnie Musgrove, Mississippi Development Authority Executive Director Bob Rohrlack and other state officials at a Feb. 5 gathering in Seoul with Hyundai President Kim Dong-jin and other company leaders. Scruggs said Tuesday he traveled as part of the delegation at the request of his brother-in-law, Senate Minority Leader Trent Lott, R-Miss., to serve as a liaison between Lott's office and the governor's office. The meeting centered on property near Pelahatchie, a small town some 25 miles east of Jackson that became Mississippi's top offering to Hyundai for an auto manufacturing plant and its 2,000 jobs. Another site near the community of Kewanee in Lauderdale County also was discussed briefly, said Scruggs, who has made millions suing tobacco and asbestos companies. "Dr. Kim seemed to have his mind made up," Scruggs said in an interview with The Associated Press. "He expressed concerns about the Pelahatchie site and even more concerns about the Kewanee site." Mississippi was one of four states Hyundai was considering before narrowing the list to Alabama and Kentucky in late February. Alabama got the nod April 1, and Hyundai broke ground near Montgomery on Tuesday. "If we were going to get this, it was going to be on political muscle," Scruggs said. Political might aside, questions have arisen about how Pelahatchie became Mississippi's leading prospect and how suitable a location it was for the project. Lott, in a conference call with Mississippi reporters last week, said he notified the state in November that Hyundai had problems with the Pelahatchie site. "I never could seem to convince the right people that we needed to look for alternative sites," Lott said. The senator said he didn't know "all the ramifications or details ... but we know for a fact it was not the best site." Scruggs said he served as the liaison between Musgrove and Lott on the Hyundai talks because of "a bit of a misunderstanding" between the politicians' staffs over how to attract the automaker. In Sunday's edition of The Meridian Star, the newspaper cited a confidential memo from Hyundai to Mississippi officials dated Dec. 4, 2001, that raised several concerns about the Pelahatchie site. An article detailing the recruiting effort suggests Musgrove and the MDA continually targeted the Pelahatchie site despite other suitable locations and Hyundai's questions about such things as topography and available labor. Nissan, which is building a $930 million auto plant in Canton that will employ as many as 4,000 people, already had expressed to the state its reservations about another auto manufacturer opening within 80 miles of its plant. Musgrove and Rohrlack strongly deny they steered Hyundai toward Pelahatchie and told The AP that the automaker and its consultants deemed the site acceptable after ruling out seven others. "Economic development is a client-driven process, and we focused on exactly what Hyundai requested," Musgrove said Tuesday. At the Feb. 5 meeting in South Korea -- Musgrove's second visit to the country within two months -- the governor said Kim made clear that Hyundai's "concentration is on Pelahatchie." In a case study of the Hyundai project prepared by MDA, the agency says it initially submitted seven potential sites to Hyundai, each of which was rejected for various reasons. Hyundai's site consultants, at the request of the automaker, then asked MDA to identify a site near the Jackson metropolitan area that fronts an interstate, the study says. That's when Pelahatchie, which is on Interstate 20 in Rankin County, came into play. As a backup, the state also promoted Kewanee and another site. Scruggs, who said he paid his own way to South Korea, praised Musgrove and Rohrlack for their salesmanship during the Feb. 5 meeting. Scruggs has been among Musgrove's campaign contributors. The attorney said Musgrove tried to counter Kim's concerns about the Pelahatchie site by offering to reconfigure the location and even suggesting another one nearby. However, in Scruggs' view, the matter seemed to be moot. Scruggs said Kim confirmed that to him privately at the end of the meeting. He said Kim mentioned that Alabama and Kentucky "were exactly what they wanted" because both had sites that were ready and met Hyundai's tight development schedule. "Dr. Kim wanted to go somewhere he could make cars quickly," Scruggs said.