Immediate Evacuation and One-Week Shutdown for Employees... Major Corporations Like Samsung, LG, and Hyundai Go on High Alert [US-Iran War]

Shutdown of Local Operations and Crisis in Middle East Expansion

Immediate Evacuation by Home Appliance and Auto Industries with Regional Bases

Close Monitoring of Volatility in Logistics, Exchange Rates, and Oil Prices

Consideration

Amid the airstrikes between the United States and Israel against Iran, Korean companies with subsidiaries and business sites in the region now face the risk of shutdowns. Corporations such as Samsung Electronics, LG Electronics, and Hyundai Motor Group have immediately evacuated their employees from sites in Iran and Israel and are closely monitoring the situation. As the Middle East has recently emerged as a promising market, industry insiders anticipate that prolonged instability will inevitably disrupt business operations for these companies.

According to industry sources on March 3, Samsung Electronics quickly evacuated employees from its subsidiaries in Iran and Israel—which are at the heart of the conflict—to neighboring countries such as Dubai, Egypt, and Jordan. Employees at subsidiaries in Saudi Arabia and Jordan continue to work on site as usual, while those in the United Arab Emirates (UAE), Qatar, and Iraq have switched to remote work. The company is considering several future measures depending on how the situation develops, including transitioning to remote work, evacuating to a third country, or repatriating employees.

A bird's-eye view of Hyundai Motors' Saudi production corporation (HMMME) factory. Hyundai Motor Group.

LG Electronics, which also operates businesses in neighboring regions, has begun evacuating employees as well. Korean staff and their families working at the Israel site have been evacuated according to guidance from the local embassy. It has also been reported that a Korean employee who had been working in Iran was able to leave the country last week. Additionally, LG Electronics is advising its employees in Middle Eastern countries to stay alert and limit travel for their safety.

Hyundai Motor Group, which is currently constructing a production plant (HMMME) in Saudi Arabia, is also keeping a close watch on developments. While the local airport has been closed, workers and staff involved in the plant’s construction continue to report for duty and are monitoring the situation. In certain Middle Eastern countries, such as Israel, the company has suspended operations at showroom dealerships and taken additional precautionary measures. The company stated, "All employees in the Middle East remain safe, and we are maintaining emergency contact protocols. We are continuously monitoring the situation in real time and will review further response measures as necessary."

Home Appliance and Automotive Industries, Targeting the 'Global South', Take a Hit

With a prolonged slump in demand, the home appliance industry has recently focused on expanding into the emerging 'Global South' markets. In particular, companies have been strengthening their presence in the Middle East, Southeast Asia, and Central and South America. In the Middle East, Samsung Electronics has focused on targeting the B2B market—especially in the air solution sector. Last year, the company held the "Samsung Middle East Air Solution Day" in China to present solutions to the regional air conditioning industry.

Samsung Electronics primarily operates in the Middle East through the sales of consumer products such as smartphones, TVs, and home appliances. The company has its Middle East and North Africa (SEMENA) subsidiary in Riyadh, Saudi Arabia, and operates a sales subsidiary and a semiconductor research center in Israel. It also has sales offices in Iran and Jordan, among other countries.

However, it has been reported that the company has gradually scaled back its operations in response to ongoing conflict risks, such as Iran’s decision to close the Strait of Hormuz in June of last year. An industry official noted, "Due to continuous international issues in the Middle East, companies have been operating under significant restrictions."

LG Electronics, which has also prioritized its Global South strategy this year, is facing an emergency. The company has its Middle East and Africa regional headquarters in Dubai. While its main subsidiaries and factories are outside the immediate conflict zone, such as Iran, it does operate production plants in neighboring countries—air conditioners in Saudi Arabia and TVs in Egypt—which could be affected.

Last month, LG Electronics hosted the "LG Innofest" in Abu Dhabi, UAE, inviting more than 250 major business partners from the Middle East and Africa to present its local business strategies. This was the first time in seven years since 2019 that the company showcased its key product lines overseas in a comprehensive manner. It is reported that LG Electronics plans to further expand these events to Central and South America and Asia this year, seeking to broaden business opportunities in the Global South markets.

The company is also reviewing alternative logistics routes for its Middle Eastern subsidiaries in response to the closure of the Strait of Hormuz, and is assessing the impact on demand in cooperation with its partners. An LG Electronics representative stated, "We are closely monitoring increased volatility in logistics, exchange rates, and oil prices, and are assessing industry forecasts for our business operations."

Hyundai Motor also commented that if the conflict ends quickly, the plant construction schedule will not face major delays; however, if the situation continues, the company plans to respond by seeking alternative routes. Hyundai Motor aims to complete its first Middle Eastern automobile plant in Saudi Arabia in the fourth quarter of this year and develop it into a regional production hub for the rapidly growing Middle East and Africa markets.

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