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.
The South Korean Curse: Kia Loses Landmark Wage Dispute With Employees
Seoul Central District Court ruled against Kia Motors on Thursday, ordering the automaker to pay around 420 billion won, or $374 million, in unpaid wages. Kia employees first filed an initial lawsuit in 2011, claiming a 659 billion won wage disparity, following it up with an additional suit in 2014.
However, the automaker claims the final cost will be closer to 1 trillion won, or about $890 million, and could result in a third-quarter operating loss. Interestingly, this is roughly the same amount workers demanded over their six-year legal dispute (after interest).
“The current operational situation is such that the ruling amount is [difficult] to bear,” Kia said in a statement.