Hyundai employees cease constructing SUV forward of U.S. launch as labor row escalates

SEOUL (Reuters) – Hyundai Motor (005380.KS) employees in South Korea have stopped constructing the Kona sport utility car this week forward of a U.S. launch – a protest in opposition to what the automaker’s labor union says are plans to trim meeting line headcount.

The emblem of Hyundai Motor is seen throughout the 2017 Seoul Motor Present in Goyang, South Korea, March 31, 2017. REUTERS/Kim Hong-Ji

The union, which can be in annual talks with administration over pay, warned wider strike was potential.

Hyundai has been in discussions with its labor union since October on manufacturing plans for the Kona, a key mannequin that it hopes will reverse a U.S. gross sales stoop.

The union contends that the automaker desires to introduce extra automation and outsource extra meeting of key sections to half makers – plans that it’s vehemently against. Hyundai administration argues that the union is making “irrelevant calls for” comparable to requests for further home windows within the manufacturing facility as a part of the manufacturing discussions.

The automaker’s resolution to start out manufacturing of the Kona on a brand new meeting line final week was made with out session with the union and was unacceptable, union chief Ha Boo-young mentioned in an announcement, including wider strike was potential “ought to there be one other provocation by administration.”

The transfer comes forward of a deliberate unveiling of the U.S.-production model of the Kona on the Los Angeles Auto Present on Wednesday with U.S. gross sales slated to start early subsequent yr. The Kona is presently offered in South Korea, the place it has confirmed to be a well-liked mannequin, in addition to Europe.

The 2 days lack of manufacturing thus far this week is equal to 1,230 autos, Hyundai mentioned in an announcement.

Hyundai Motor President Yoon Kap-han mentioned it was regrettable that the labor union was disrupting manufacturing for a high-demand mannequin at a time when most of its vegetation have been “affected by the worst gross sales slowdown.”

Hyundai Motor’s international gross sales fell 6 % from January to September in contrast with the identical interval a yr earlier, as a scarcity of SUV fashions hit gross sales within the U.S. market and a diplomatic row between Seoul and Beijing harm gross sales in China.

Reporting by Hyunjoo Jin; Enhancing by Edwina Gibbs

Our Requirements:The Thomson Reuters Trust Principles.

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