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Hyundai Motor suffers from strike, typhoon

[THE INVESTOR] Hyundai Motor is expected to suffer further production losses due to the ongoing labor strike, as well as the latest typhoon that halted operations in its assembly lines.

On Oct. 5, Typhoon Chaba swept the southern part of the Korean Peninsula, and Ulsan, home to Hyundai’s five auto plants, was lashed with severe winds and heavy rain.

Two factories immediately halted production following a heavy water inflow into their facilities, with one -- which produces Santa Fe SUV and Avante compact sedan -- yet to resume production. 



It is the second time this year for Hyundai’s Ulsan facility to be hit with natural disaster. Earlier in September, the automaker temporarily shut down parts of its assembly lines following an earthquake in Gyeongju.

Due to the typhoon, hundreds of new cars, including high-end model EQ900, that were parked to go on sale were submerged under water, according to news reports. The damage amount is not yet known.

Hyundai said it will scrap the vehicles that have defects.

Meanwhile, union workers of Hyundai Motor have staged 24 partial and full strikes since July over stalled wage agreement.

According to the Ministry of Employment and Labor, the ongoing walkout resulted in production loss of at least 131,000 vehicles worth more than 2.9 trillion won (US$2.61 billion) this year.

Hit by strike, Hyundai Motor sold 41,548 units in Korea in September, down 20 percent on-year. The outbound shipments of cars produced here also decreased by 20.9 percent in September from a year earlier.

“Domestic sales plunged on the termination of tax cut on car purchases and ongoing strike that affected domestic production,” a Hyundai official said.

The government is reviewing whether to take an emergency arbitration measure that will force workers back to their jobs due the prolonged labor dispute. But the labor union threated the government that it would stage a general strike if the government executes the measure.

By Ahn Sung-mi (sahn@heraldcorp.com)
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