Hyundai Motor Faces Renewed Risks from Unmanaged Suppliers

Passed the labor agreement hurdle, but partner company strike causes sudden halt
If negotiations fail by the 15th, additional strikes on the 16th and 18th are expected

Hyundai Motor and Kia, having tentatively reached a wage negotiation agreement between labor and management, are now exposed to union risks from their partner companies. A strike by Motras, a parts supplier that delivers modules, has halted some production lines of finished vehicles. Since this company plans to carry out additional strikes next week, further production disruptions seem inevitable.

According to explanations from Hyundai Motor Group and the union on the 11th, Motras has decided to conduct additional strikes if negotiations with management remain stagnant by the 15th. On the 16th, they plan to stop the lines for 4 hours each during day and night shifts, and on the 18th, for 8 hours each during day and night shifts, similar to the previous day.

On the afternoon of the 10th, the finished car parking lot at Kia Autoland Gwangju Plant 2 in Seo-gu, Gwangju, appeared quiet.
[Photo by Yonhap News]

Motras is a production subsidiary of Hyundai Mobis, a parts affiliate of Hyundai Motor Group. It manufactures chassis modules, which are vehicle frames pre-assembled with hundreds of parts such as engines and transmissions, considered key semi-finished products, as well as cockpit modules covering the entire driver's seat area including the instrument panel. The modules produced here are immediately transferred to Hyundai Motor and Kia’s final vehicle assembly lines, where the finished products are completed.

Finished vehicle production operates through a complex supply chain working in real time. Generally, when a strike is anticipated within the parts supply chain, stockpiles can be secured in advance to mitigate impact; however, modules are bulky and, due to the nature of the process, it is difficult to stockpile them. This is why Motras’ strike during the recent Metalworkers Union general strike caused Hyundai Motor and Kia’s final assembly lines to halt for several hours.

The strike by the partner company is an unexpected variable arising after Hyundai Motor’s labor and management tentatively agreed on a wage negotiation deal without strikes. Hyundai Motor’s labor and management expected that finished vehicle production would not be affected by strikes this year following the tentative wage agreement. The Hyundai Motor and Kia unions did not directly participate in the recent Metalworkers Union general strike. Under these circumstances, the strike by the parts supplier has directly impacted finished vehicle production.

On the morning of the 10th, participants are performing at the Metal Workers' Union General Strike Rally for Gwangju and Jeonnam held in front of Motras Gwangju Factory in Jingok Industrial Complex, Gwangsan-gu, Gwangju.
[Photo by Yonhap News]

Motras was established in 2022 and is conducting its second round of wage and labor negotiations this year following last year. Negotiations have been ongoing since May but are reportedly facing difficulties. The union is considered strong, proposing a base pay increase (184,900 KRW) higher than Hyundai Motor’s, making it difficult to narrow the gap between labor and management. Motras has separate branches for each of its nine workplaces, and negotiations with management are reportedly conducted by the higher-level organization, the Metalworkers Union central body. During last year’s wage negotiations, strikes also occurred, causing Hyundai Motor and Kia workplaces to miss overtime work.

The Metalworkers Union’s strong demands for amendments to Articles 2 and 3 of the Labor Union Act also pose a burden. The proposed amendments to the Labor Union Act face deep divisions between labor and management and are considered difficult to reconcile even within the political sphere. Although passed under opposition party leadership in the 21st National Assembly, the bill was ultimately vetoed by the president and discarded. Similar developments are occurring in the current 22nd National Assembly. The Metalworkers Union has threatened to carry out second and third rounds of strikes if the government does not change its stance.

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