Hyundai Motor is facing global sales challenges and external uncertainties, leading to a halt in production at its domestic facilities due to labor disputes. Jose Munoz, president of Hyundai Motor, recently pointed out to employees that production disruptions are one of the causes of poor performance and emphasized the need to accelerate new vehicle launches. However, production of the Genesis line has been halted for two consecutive days due to conflicts surrounding the introduction of new models.
According to industry sources on November 3, the Genesis assembly line at Hyundai's Ulsan Plant No. 5 has not resumed normal operations for the second day in a row. This line typically starts operating at 6:45 a.m., but production was suspended due to unresolved disagreements between labor and management.
The conflict arose during negotiations over 'man-hours' related to the mass production of the Genesis G80 hybrid and the G90 facelift model. 'Man-hours' refer to the labor and workforce required to produce a single vehicle. As new models are introduced, the processes and workload change, necessitating discussions between labor and management on appropriate staffing levels.
Hyundai's collective bargaining agreement stipulates that labor and management must discuss related matters 90 days prior to the mass production of new models. However, local union representatives have expressed concerns about potential reductions in workforce after the introduction of new models, leading them to oppose the negotiations.
Union representatives held a meeting the previous evening to discuss man-hour issues but failed to reach any conclusions. As negotiations between labor and management drag on, the timeline for normalizing production remains uncertain. If this conflict persists, it could impact not only the production of existing vehicles but also preparations for future new model launches.
As Hyundai faces performance challenges due to external uncertainties, the suspension of domestic production lines adds to the company's operational burdens. Munoz has also highlighted production disruptions as a major business risk in recent communications with employees, stressing the need to strengthen internal competitiveness.
In an email to employees following the announcement of third-quarter results, Munoz stated, "This is one of the most challenging times in the automotive industry since I started working in it." He cited supply chain constraints due to conflicts in the Middle East, ongoing increases in raw material prices throughout the year, intensified competition in European and South American markets, and production disruptions as compounding factors.
He urged the company to focus on areas that can be improved internally, emphasizing that while factors like tariffs, steel prices, and regional tensions in the Red Sea are beyond their control, aspects such as vehicle quality, the speed of new model launches, cost management, and customer experience can be influenced by their efforts.
* This article has been translated by AI.
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