Hyundai And Kia Run Out Of Parts

Bertel Schmitt
by Bertel Schmitt

Assembly lines at South Korea’s Hyundai Kia ground to a halt this weekend after the companies ran out of a needed engine parts. Production of Hyundai’s Tucson ix, Santa Fe and Veracruz and Kia’s Carnival has stopped. On Wednesday, production of most of Hyundai’s and Kia’s cars will be affected unless the parts shortage is solved. The Korean units of GM and Renault will suffer, as well as Ssangyong. Do they all get their engines parts from Japan?

They don’t. South Korea’s Yoosung Enterprise delivers 70 percent of the piston rings used in the popular models of Hyundai and Kia, writes Reuters. Yoosung has not been hit by a tsunami, but by a good old strike. Union members occupied production lines on May 18 over disagreements on new wage and shift systems.

“Yoosung’s piston rings account for around 50 percent of the parts used in our engines,” a GM Korea spokesperson said.

“Yoosung supplies all of the camshafts used in our SM5 2.0 models. We have an inventory of four days, but a prolonged strike could affect our production,” a spokesperson for Renault Samsung Motors said.

They better settled that labor dispute. Because as this old video shows, when Korean unions strike, they strike hard.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Highdesertcat Highdesertcat on May 22, 2011

    Hyundai and Kia already suffer from car availability shortages in the US, especially in the Sonata, Elantra, and Sorento models. An extended strike would only worsen an already lean situation. More people every day realize the quality and value the Hyundai and Kia products offer compared to all other auto makers, along with an extended warranty. This strike and resulting shortages is going to hurt sales. You've got to sell in order to make money. Maybe additional parts plants in northern Mexico would be a good strategy to follow. It will also keep the Mexicans home and employed in Mexico instead of coming over here looking for work. With the UAW actively pursuing their goal of unionizing all non-union foreign plants in the US it is just a matter of time before those will price themselves out of the market as well.

  • LXbuilder LXbuilder on May 22, 2011

    Even a moron could watch that video and figure out why workers Unionize. Free enterprise is just the rich screwing the poor if you don't have unions. Funny some folks prefer to be taken advantage of rather than organize.

    • See 2 previous
    • SCE to AUX SCE to AUX on May 23, 2011

      @LXbuilder: Ever consider why some people don't want to organize? Maybe they don't like having their wages 'taxed' by the union, only to line the pockets of the top union brass and furnish posh resorts. Or maybe they think the union's bellicose attitude will backfire and not really protect their jobs in the end. Or maybe they already know that labor laws, safety standards, access to information, and worker mobility today all help the worker in ways unheard of a century ago. Amazing how all those transplant workers in the US can be so stupid as to not organize. If Bob King would only threaten their employers a little more, they might just decide to join the UAW after all! Or not.

  • Inside Looking Out Inside Looking Out on May 22, 2011

    If UAW has a half of brain left and do not strike then it is once-in-a-century opportunity for Detroit 2+ to take US market back. But it is hard proposition since unions did not use their brain for decades. And why do you need functioning brain if US government and union leaders decide everything for you from day you are born?

  • 69 stang 69 stang on May 22, 2011

    Unions exist today to make sure certain people get paid more and have more job security than the majority of workers. They do that by limiting membership and by buying off politicians so they write rules that require union labor. This leads to higher prices and not necessarily improved quality. Even union members understand if all of us were in unions there would be no advantage as everything would cost more so the "increased" pay would not do any good. And if everyone's job was guaranteed we would be like many European countries defaulting on their obligations- oh yeah that is coming soon to this country.

    • Steven Lang Steven Lang on May 23, 2011

      That's a narrow interpretation of what unions do. There are unions that put themselves above all else, including the well-being of the institution that enables their livelihood. On the flip side there are also executives in management that do the exact same thing. There are also unions that enable their members to have a decent wage and healthy working conditions. Much of our recent history and standard of living can be attributed to their work. There are also unions that truly work with management so that everyone involved in the company's work (including non-union) benefit from their efforts. Like all things related to business... the answer as to whether a given union makes a positive tangible difference is always the same. It depends.... We need to have a context of what's taking place before any of us can make a qualified judgment.