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Pundits worry that the labor union strike at Hyundai Motor could delay production, impact exports and sully the automaker's brand image. The automaker said Sunday that because of the union's refusal to work overtime the company has only 23,000 vehicles available for the domestic market, well below the 30,000 units needed.
"A four-hour strike causes us to lose 1,400 units from production a day and a general strike causes 7,000 lost units a day," an executive with Hyundai Motor said. "If deliveries are delayed for more than a month, consumers get frustrated and that would negatively impact future sales." At the moment, 3,400 Avantes, 2,000 Sonatas and 2,000 Grandeurs are awaiting delivery to their Korean purchasers.
Hyundai predicts that if the union extends its partial strike to the end of this month as planned, the time it takes for its vehicles to be delivered to buyers will lengthen from the current 2~3 weeks to 1~2 months. Problems are expected overseas as well. Popular models like the Verna, the Avante and the Santa Fe are backordered overseas by 20,000~30,000 units. The new Avante released in the U.S. in September last year is suffering inventory shortages.
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Hyundai Motor union members stand near flags and tents set up for a strike at the company¡¯s Ulsan plant on Sunday.
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Hyundai is concerned that a slow down in production will tarnish its brand image overseas as demand for compacts like the Verna and the Avante are soaring because of high fuel prices.
Things got more serious at Hyundai's Jeonju truck and bus factory as the company's two-shift production plan collapsed because of union opposition. The automaker said the factory is already behind in export production by a six-month volume and it cannot meet a three-month 5-ton truck order because the two-shift plan was rejected.
Korea's five largest business and trade organizations are to hold an emergency meeting Monday to call for the union to end the strike and seek a government response to the situation, the Korea Employers Federation (KEF) said Sunday. Executive director of the KEF Kim Young-bae, vice chairman and CEO of the Federation of Korean Industries Cho Kun-ho, president and CEO of the Korea Chamber of Commerce and Industry Kim Sang-yeol, vice chairman of the Korea International Trade Association Ryu Chang-moo, and vice chairman of the Korea Federation of Small and Medium Business Jang Ji-jong will meet at the Lotte Hotel in Seoul Monday to discuss the strikes.
"The union's strike itself is illegal and it'll deal a tremendous blow to related industries," a senior official with the KEF said. "The business leaders will meet to call for the union to cancel its strike and for the government to respond firmly."
(englishnews@chosun.com )
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