Hyundai Motor says labor strike has forced it to suspend vehicle exports
SEOUL, South Korea – A partial strike by its labor union has forced Hyundai Motor Co. to suspend vehicle exports, South Korea’s largest automaker said Thursday.Hyundai spokesman Oles Gadacz said the company has about three month’s worth of vehicle inventory already shipped overseas, so there has been no supply disruption to dealers.”There’s no cause for concern at this point,” he said. “We do build up inventories going into a strike.”Walkouts are virtually an annual event at Hyundai, where the company’s labor union has gone on strike every year but one since 1987.Summer is traditionally a period of labor unrest in South Korea, when unions make demands for pay and benefit increases. Strikes are often a part of the bargaining process.Hyundai’s unionized workers have been laying down tools for parts of the day since June 26, demanding a 9.1 percent increase in basic salary, higher incentives and better working conditions. Last year’s strike ended after Hyundai and the union agreed on a 6.9 percent salary increase.The strike has so far cost the company 78,616 vehicles in lost production worth 1.08 trillion won ($1.13 billion), Gadacz said.Unionized workers at Hyundai affiliate Kia Motors Corp. also launched a partial strike Tuesday.The two automakers account for more than 70 percent of vehicle exports in South Korea, where autos account for about 10 percent of total exports.Hyundai produced 1.68 million vehicles in South Korea last year. It also manufactures vehicles overseas at factories in the United States, China, India and Turkey.The automaker has been buffeted by turmoil this year with the April arrest of Chairman Chung Mong-koo on embezzlement and breach of trust charges related to a slush fund scandal. He is currently on trial.Chung, 68, was released from jail late last month on bail and returned to work this week after spending time in the hospital. His absence was considered a blow to decision-making in the Hyundai-Kia Automotive Group, which has ambitious expansion plans.Following Chung’s arrest, Hyundai indefinitely postponed a groundbreaking ceremony for a new plant in the Czech Republic. Kia also delayed a similar ceremony for a factory in the U.S. state of Georgia.Hyundai shares rose Thursday, gaining 2.3 percent to close at 72,300 won ($76).