Bozeman Landed Hyundai’s New Horizons Studio R&D Center. Now Montana Is On The Hunt For More Manufacturing

(L to R) Stephanie Gray, Dean, Gallatin College, Abraham Kim, Executive Director, Council of Korean … [+] Americans, Todd O’Hair, President and CEO, Montana Chamber of Commerce, John Robb, President, Hyundai Kia America Technical Center, Inc. (HATCI), Governor Greg Gianforte State of Montana, John Suh, Founding Director, New Horizons Studio, HATCI, Scott Osterman, Director, Montana Department of Commerce, Jason Carter, Vice President of Economic Development and Research, Montana State University, Mark Sharpe, Director, MSU Innovation Campus, celebrate the Hyundai New Horizons Studio Bozeman R&D Center opening in Bozeman, Mont. on May 5, 2022.

Photo courtesy Montana Chamber of Commerce

The state of Montana has a wealth of riches to draw in newcomers, including four full seasons offering a wide range of outdoors activities, no traffic, a low cost of living, and friendly people, to name just a few.

Now a consortium of government, academic and business leaders in the state, including the Montana Manufacturing Association under the Montana Chamber of Commerce, has been working for the past few years on a collection of other attractions to draw one specific kind of newcomer to Big Sky Country: manufacturers. While Montana already has over 4,100 manufacturing companies with over 21,400 employees generating $3.8 billion in economic output, state leaders see a lot more opportunity in that sector.

“We’re leaning into our state’s strengths with our western lifestyle, entrepreneurial spirit and high-quality education system that is nimble and responsive to evolving workforce needs,” explained Todd O’Hair, President & CEO of the Montana Chamber of Commerce. “We’re targeting businesses that not only have synergies with these growing sectors, but who also want to become a part of the fabric that is Montana. This is a relationship state, and we want businesses that desire to be part of our community.”

Scott Sehnert, Vice President of First Security Bank and Board Chair of the Montana Manufacturing Association, agreed. “Our manufacturing base and growing hi-tech industry is creating centers of excellence across the Big Sky State,” he added. “We’re seeing close collaborations to address challenges across the industry, such as workforce, cyber security, housing, and the supply chain. In the past 18 months, we have experienced significant investment and M&A activity in Montana-born companies. There’s a lot of optimism for our continued growth.”

Hyundai Motor Group’s New Horizons Studio (NHS) is a perfect example of the kind of businesses they’re going after. Last May the Silicon Valley-based unit of the Korean automaker announced it would build its R&D center in Bozeman, on Montana State University’s Innovation Campus, taking a definitive step toward actual production of the Ultimate Mobility Vehicle (UMV) concept the team had been working on since 2020.

The Elevate Ultra-Mobility Vehicle concept as revealed in Las Vegas, Nevada at the Consumer … [+] Electronics Show in 2019.

Image courtesy Hyundai

It was four years ago at the Consumer Electronics Show (CES) that Hyundai introduced its UMV concept. Named Elevate, it was the product of the company’s Center for Robotic-Augmented Design in Living Experiences (CRADLE), its venture capital accelerator. The display at the 2019 CES featured a one-fifth scale model of the UMV, envisioned as an EV with motors at each wheel, with the wheels mounted on five-jointed legs that could convert the vehicle from a rolling one to a walking one on the fly. The intent was to make a vehicle capable of traversing terrain no existing vehicle could navigate, for purposes including urban emergency response and mountain search and rescue.

In September 2020, the concept was turned over to the freshly minted NHS, established in Silicon Valley to focus on the real-world development of UMVs. John Suh, the Hyundai Vice President who had led CRADLE, took over leadership of the new organization. Forbes first covered the story at that time, but back then actually producing the Elevate was still just a wish. “Full-size test timing? Hard to say,” said Suh at the time. But now, with its new $20 million center in Bozeman, NHS is focusing on production of vehicle prototypes and eventually end user commercial production as well.

“Montana is quickly becoming a hub for high-tech companies and entrepreneurs with a growing talent pool of skilled labor in the fields of engineering, quantum computing research and natural science,” said Suh, who now serves as Vice President and Founding Director of NHS. “Montana also has the 4th highest rate of new entrepreneurs in the U.S. This hot market is attracting new budding talent that gives New Horizons Studio and Hyundai Motor Group the best opportunity to grow our UMV business with fresh and innovative thinking in new hires.”

What’s remarkable about Bozeman landing the NHS R&D Center is that the deal involved no special incentives, such as the tax breaks or loan guarantees that now routinely play a significant factor in companies’ decisions about where to locate new facilities. Instead, there were other major considerations that drove the NHS location selection. Chief among those is the availability of high-skilled, technically oriented people–both student researchers and full-time worker graduates–from Montana State University. Another is the ready availability of extremely rugged trails and off-road terrain for testing the UMV. And a third is the collection of pro-business and pro-manufacturing initiatives the business consortium has already delivered, such as an increase in the business equipment tax exemption from $100,000 to $300,000 that the state legislature passed in 2021.

Montana Governor Greg Gianforte celebrates the opening of the New Horizons Studio R&D Center with (L … [+] to R) Mark Sharpe, Director, MSU Innovation Campus, Dr. Abraham Kim, Executive Director, Council of Korean Americans, and Matt Olson, Director of Network Development for the Montana Chamber of Commerce.

Image courtesy Montana Chamber of Commerce

“When Hyundai Motor Group chose Montana for its New Horizons Studio, it sent a message to job creators and innovators around the world that Montana is open for business,” said Montana’s Governor Greg Gianforte. “With our business-friendly environment, booming hi-tech sector, and unmatched quality of life, we’re making the Treasure State the best place in the country to do business.”

Now Gianforte and the state legislature are working with business groups on another round of manufacturing-friendly reforms to be prioritized in the legislative session just kicking off. That lengthy list includes another increase in the business equipment tax exemption, this time to $1 million. Also part of the package are product liability reform, protections against third-party litigation financing, holding losing parties responsible for environmental litigation costs, and incentivizing fair settlement offers for lawsuits.

By going after improvements to the fundamental business environment rather than throwing out one-off “pot-sweeteners” to lure new manufacturing firms, state leaders believe they’ll set up a more consistent, sustainable, and long-lasting draw for industrial businesses. It’s an approach that certainly sets Montana apart from many of its competitors. “With personalized support and close collaboration with our business partners, academic and government leaders, we accelerated the expansion of Hyundai Motor Group to and relationships in Montana,” said Scott Osterman, Director of the Department of Commerce for the State of Montana “The research and production of their UMVs will provide new opportunities for Montana companies hungry to grow and innovate.”