Hyundai's Ulsan plant halts production over supplier's strike

Hyundai Motor has halted production at the Ulsan No. 1 plant as it suffers from the fallout from a labor union strike at supplier Hyundai Transys.

Hundreds of Hyundai Transys workers stage a protest in front of Hyundai Motor's headquarters in Yangje, southern Seoul, on Oct. 28. [JOONGANG ILBO]

Production was partially suspended at Hyundai Motor’s Ulsan plant on Tuesday due to a shortage of auto parts caused by a monthlong labor union strike of a supplier and the prolonged slowdown in EV demand.

It's first time the plant, the country's largest carmaking facility, has stopped production in six years.

The Korean automaker said the halt of the Ulsan No. 1 plant will last four days to Friday due to a cut in auto parts impacted by Hyundai Transys's monthlong labor strike.

Another EV line at the plant was also halted on Tuesday, with Hyundai citing an "adjustment of production in alignment with weak EV demand." The stoppage will last until Nov. 18.

The affected models are the Ioniq 5 EV and Kona SUV.

Hyundai Transys, a transmission and car seat maker 41 percent owned by Hyundai Motor, has faced a labor strike since last month after its union failed to reach a consensus with management in salary negotiations. The union went on partial strike on Oct. 8 in its transmission plant in South Chungcheong, and expanded it to an across-the-board strike on Oct. 11.

The labor union is demanding a basic salary increase of 159,800 won ($116) for next year and 2 percent of the company's total sales as incentives.

The company refused the demand, citing a low operating profit margin. Two percent of the total sales amounts to 230 billion won, double the company's total operating profit last year.

Hyundai Transys reported 117 billion won in operating profit last year, while its sales stood at 11.7 trillion won. The average annual salary of a Transys worker was 107 million won.

Hyundai Motor and Kia are responsible for some 80 percent of Transys's sales.

BY SARAH CHEA [chea.sarah@joongang.co.kr]