By on February 25, 2010


Yesterday, we wrote why Hyundai’s unions are unhappy about Hyundai global expansion plans which. For some reasons, the unions think production abroad will harm South Korean jobs.

The unions have reasons for heightened annoyance. Insideline reports that Avtotor may buy the closed down Izhavto plant (Izhavto filed for bankruptcy in August 2009) in Izhevsk, Udmurt Republic, to build Hyundai and Kia vehicles. Avtotor is one of Russia’s largest assemblers of cars that come as kits. And why would that be of concern to Korea’s metal workers?

Before bankruptcy, Izhavto used to build Kia Sorentos and Spectras. Does that mean that Avotors is hunting for more Hyundai? Avtotor Senior Vice President, Alexander Sorokin is keeping his cards close to his chest. His company is “considering a project with a big foreign automaker and seeking new capacity for it,”. Not to mention that a Kia spokesperson has already confirmed that the company is interested in resuming production of Kia vehicles in Izhevsk and, suddenly, the picture starts coming in focus.

The deal is estimated to be worth between $35 – $40 million with an additional investment of $100 million. Avotor already is doing business with Hyundai and Kia. In addition, Hyundai already builds a plant in St.-Petersburg which capacity is up to 100 thousand cars per year. Mass production is scheduled to begin in 2011, says Russia’s Autostadt. Which will just soothe the souls of the unions in Seoul … Come on, guys, it’s SKD production! Just kitting!

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