Due to the car semiconductor supply shortage... Hyundai Motor likely to adjust overtime work

Weekend Overtime Schedule Adjustment Unavoidable from Next Month Due to Parts Supply Shortage

Export vehicles are waiting to be loaded at Pyeongtaek Port in Gyeonggi Province. (File photo)

[Asia Economy Reporter Changhwan Lee] As the shortage of automotive semiconductors deepens, Hyundai Motor Group has also sounded the alarm. Hyundai Motor Group, which has been checking semiconductor inventory daily to cope with the crisis, decided to manage production volume by adjusting weekend overtime schedules at domestic factories starting next month.

According to the automotive industry on the 26th, Hyundai Motor's labor and management recently decided to plan overtime work on a weekly basis. Previously, overtime plans were made on a monthly basis and notified to employees with ample time. However, as parts related to automotive semiconductors became severely scarce, they decided to create production plans weekly to increase response speed.

Inside Hyundai Motor and Kia, it is expected that overtime work will significantly decrease starting next month. It is reported that some factories have already warned employees that overtime will be greatly reduced for several months starting next month. Currently, internal discussions are underway regarding next weekend's overtime, and production plans are expected to be communicated to employees as early as today or by early next week at the latest.

Global Automotive Semiconductor Shortage, Tesla Also Halts Factory Operations

Hyundai Motor and Kia are adjusting overtime due to the recent global shortage of automotive semiconductors. Due to the semiconductor shortage, many global automakers such as General Motors (GM), Ford, Volkswagen, and Toyota have already halted factory operations or reduced production volumes.

In the case of GM Korea, production at the Bupyeong Plant 2 has been reduced by about half. Tesla, the global leader in electric vehicles, also recently suspended Model 3 production at its Fremont, California plant for two weeks due to semiconductor shortages.

Compared to other automakers, Hyundai Motor and Kia have relatively better inventory conditions and have so far responded without production cuts by adjusting vehicle production volumes and delivery schedules. Since the beginning of this year, when the global semiconductor shortage issue emerged, they have not left semiconductor inventory management solely to first-tier suppliers but have checked inventory weekly and directly negotiated with semiconductor makers to secure supply.

However, as the semiconductor shortage has worsened recently, they appear to have started adjusting overtime. There are concerns that if the situation deteriorates further, factory shutdowns for production adjustments may also become possible.

The automotive industry is concerned that the shortage of automotive semiconductors will be prolonged. The Korea Automobile Manufacturers Association expects the shortage to continue at least until the third quarter of this year.

It analyzed that automakers are currently reducing production mainly of low-profit small cars, and the supply of commercial and rental vehicles is significantly decreasing. While minimizing damage through inventory depletion and production cuts focused on unpopular models, it is expected that production disruptions of main models will also occur if supply disruptions continue long-term.

To minimize the impact on the domestic automaker industry, some have suggested that the government should request cooperation from Taiwan, a major production country, to increase automotive semiconductor production. Market research firm IHS Markit analyzed that automotive semiconductor supply disruptions will affect 670,000 vehicles worldwide in the first quarter of this year alone.

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