Hyundai Motor to shut down all local production lines

Feb 05, 2020, 09:20 am

AsiaToday reporters Park Byung-il & Lee Sang-won

Hyundai Motor, one of South Korea’s largest carmakers, will temporarily shut down its local production lines due to shortages of parts from China amid the spreading coronavirus outbreak. On Tuesday, the carmaker halted a manufacturing line in its plant No. 5 in Ulsan. All of the company’s domestic plants will stop from February 7 to February 10 or 11.

Hyundai and Kia have been receiving wiring harnesses from local Chinese factories of their Korean partners, but they are having difficulty receiving parts due to the recent production disruptions caused by the new coronavirus outbreak. As a result, Hyundai will close all of its local production for five days starting from Friday.

Hyundai Motor’s management and its union held a meeting at working-level on Tuesday, and agreed to close all production lines in the country on Friday. Based on the agreement, Ulsan No. 5 plant halted production of Genesis’s sedans and Ulsan No. 4 plant suspended production of Porter pickup trucks from Tuesday morning.

All of five Ulsan plants – No. 1-5 as well as Jeonju plant and Asan Plant will take turns to halt production. Ulsan No. 1 plant responsible for Kona and Veloster shuts down from Wednesday.

The move came following a deal between the management and labor unions. Both sides decided to close each business division based on its supply and demand of Chinese parts. They agreed to pay 70 percent of regular wages during the period of closure.

The wiring harness is a bundle of cables used in automobiles’ electrical systems and it’s one of the first parts installed during the assembly of an automobile. Wiring structure varies depending on the vehicle’s model and trim. Hyundai Group has been receiving 75 percent of the wiring harness from Chinese factories through their Korean supply partners, such as Kyungshin, Yura Corporation and THN.

The carmaker plans to work on securing alternative supplies from home and abroad to resume factory operations.

“Hyundai and Kia are setting up various countermeasures in order to minimize production disruptions by expanding parts procurement at home and Southeast Asia while minimizing the time required for suppliers to resume parts production in China,” a Hyundai official said.

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