Hyundai's Labor Issues Return as Kona Production Stops Prior to U.S. Launch
Hyundai Motor Company has, once again, found itself at the mercy of an unhappy workforce. No stranger to labor disputes, the company hinted that it might scale back its at-home labor in South Korea — presumably aware that the possible response would be negative, which it was. But the timing couldn’t be worse.
The Kona crossover is believed to be the model that will turn things around for Hyundai in the United States, but a new labor strike has put the export vehicle’s production on hold only a week after it started.
Union officials say they didn’t like the automaker forcing the model onto them. Hyundai has had difficulties reaching agreeable terms since the start of October. Combined with wage disputes and complaints of outsourcing production, labor management has indicated that a much larger strike would not be out of the question.
Union head Ha Boo-young even issued a cautionary statement regarding additional work stoppages “should there be another provocation by management.” The union is clearly very concerned that Hyundai will move production out of South Korea while replacing existing jobs with automation. But Hyundai has its own problems, mainly meeting labor demands.
According to Reuters, requests have been made to install additional windows in existing factories during wage negotiations. The company has viewed those requests as a waste of time. Hyundai Motor President Yoon Kap-han said it was unfortunate that the labor union was disrupting production for a high-demand model at a time when most of its plants were “suffering from the worst sales slowdown.”
The Kona is already selling well in both Asia and Europe. Expectations for North America are also high, but the crossover isn’t scheduled to arrive in the West until early 2018. While the strike won’t delay its appearance at the L.A. Auto Show this week, the rollout could be hampered if Hyundai’s workforce refuses to play ball. Thus far, the automaker has said it has suffered a two-day production loss of around 1,230 vehicles as a result of the strike.
[Image: Hyundai]
Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
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There's one thing about protection workers rights/safety, but then there's being totally unreasonable and time and time again the leaders of the union representing H/K workers have shown to be out of their gourd when it comes to their demands - which are totally counter-poductive. This is exactly why H/K is looking to outside Korea when it comes to expanding production capacity (already build more outside Korea).
Hyundai management has been cut-throat for at least two decades, even on themselves like junior execs who didn't meet ridiculous and unrealistic sales targets. Being the CEO of Hyundai America was about the same as playing musical chairs. You got six to 12 months, and if sales didn't balloon, off on your enforced firing you went. Stability for Krafcik for perhaps six years was only gained by the popularity of the 2010 Elantra and 2011 Sonata. But sure enough, having a brain in his head he saw the writing on the wall and decided to exit himself and off he went to run Truecar. Now that J/K sales have fallen off globally (H much more than K), even mentioned in this article by President Yoon Kap-han, due to a reversion of the company's vehicles to type and thus reduced interest from consumers, we get mush like "H/K doesn't have enough crossovers", when any dolt could see they had three models, much like Honda. Misdirection works so well most of the time, because nobody bothers to check and soon it becomes accepted as true. With their backs against the wall, Hyundai management has reverted to the snarling pack of yore, so it's hardly surprising the workers are in revolt. What we haven't been told is exactly how nasty they're getting. I suppose if I had a simple mind that said automatically unions = bad, I could write silly one-sided comments like the ones I see here. But having worked in industry in management for 40 years and seen reality, I'm not stuck in an ideological closed corner as a defeated serf repeating capitalist dogma as if they were truisms and making their case for them.