"Imbalance in Factory Shipment Volumes"... Is Hyundai Motor's Labor-Management Relations Becoming a New Issue?

Domestic-Focused vs. Export-Focused Factories Show Growing Operation Gap Post-COVID
Prolonged Shutdowns Lead to Wage Differences, Increasing Resentment

Hyundai Motor Ulsan Plant Main Gate (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Concerns are emerging that the imbalance in production volumes between factories could ignite new tensions in labor relations at Hyundai Motor Company. As the global spread of the novel coronavirus infection (COVID-19) shows no signs of abating, a significant disparity in operating statuses between domestic-focused factories and export-focused factories has persisted for over three months. Differences in production line operation statuses inevitably lead to wage disparities, creating a growing sense of resentment, especially among lines experiencing continued shutdowns.

According to industry sources on the 11th, the union at Hyundai Motor's Ulsan Plant 4, Line 1 decided on the 9th to refuse weekend overtime this week following a production volume meeting with management covering weeks 2 to 4 of this month. The reason cited was that management unilaterally changed factory operation plans, including the operation of "gongpichi" (running the production line with an empty conveyor belt) and overtime work during discussions. Currently, Palisade and Grand Starex models are produced together on Ulsan Plant 4, Line 1.

Industry analysis attributes this conflict to the imbalance in production volumes between factories that has intensified since the spread of COVID-19. Due to a sharp decline in exports and increased uncertainty in parts supply caused by the global spread of COVID-19, Hyundai Motor has responded since April by shifting from monthly to weekly production planning. Labor and management at each factory finalize production plans through volume meetings considering inventory status and order volumes. Through this system, factories with high production volumes conduct weekend overtime, while those with lower volumes implement shutdowns.

This month, shutdowns were implemented on some lines within the Ulsan plant, such as Plant 4, Line 2 from the 1st to 5th and Plant 3 on the 11th and 12th. Even if the factory doors remain open, production volumes are adjusted by controlling the ratio of gongpichi operation. Conversely, factories producing popular domestic models like Grandeur, Palisade, and GV80 are conducting full weekend overtime, resulting in completely different atmospheres within the same plant. For example, within Ulsan Plant 4, Line 1 producing Palisade and Grand Starex continues weekend overtime, while Line 2 suffers from a shortage of production volume to the extent that shutdowns are feared even in July. It is reported that voices of dissatisfaction have emerged on Line 2 due to the absence of gongpichi operation and overtime, unlike Line 1.

Last April, Hyundai Motor Ulsan Plant Export Shipping Dock (Photo by Yonhap News)

Recently, Hyundai Motor's union has attracted attention for prioritizing overcoming the COVID-19 crisis, showing a different stance from the past when it focused solely on confrontation. However, as the differing operating statuses between factories continue, sporadic internal conflicts of varying scales are emerging.

The union is also taking this situation seriously. At the Employment Stability Committee held last month, the union emphasized the imbalance in production volumes as a key issue alongside mid- to long-term workforce management measures in preparation for the electric vehicle era.

Senior Research Fellow Lee Hang-gu of the Korea Institute for Industrial Economics & Trade said, "Due to the impact of COVID-19, the imbalance in production volumes between factories has deepened, with some Hyundai factories operating at rates as high as 70%, while others are only in the 10% range. Fundamentally, the volume gap between lines producing vehicles aligned with market trends and those producing models that are not is inevitable, so discussions on this issue will continue even after the COVID-19 crisis."

This content was produced with the assistance of AI translation services.