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Hyundai Motor is mulling a plan to send its commercial vehicle manufacturing base to China to compensate for production losses after its labor union rejected a two-shift work system at its Jeonju plant.
Hyundai Motor signed in 2005 an agreement with China¡¯s Guangzhou Motor Group to establish a 50-50 joint venture company to make commercial vehicles in China. With a total investment of US$430 million, the factory would have an annual production capacity of 200,000 cars. Negotiations for the deal stalled, but Hyundai said Sunday that the talks are back on and making swift progress.
Hyundai is considering having the planned Guangzhou factory assemble complete knocked-down kits to produce some 50,000 commercial vehicles for export if the two-shift work system in Korea doesn't go through.
The plan will likely send repercussions throughout the industry since it means moving the Korean carmaker¡¯s main manufacturing base for commercial vehicles overseas. Further, the employment of 700 workers hired in preparation for the two-shift work system will likely be thwarted.
If it's completed, the Guangzhou plant would be Hyundai Motor¡¯s first large-scale overseas commercial vehicle plant. Hyundai has a factory to produce small commercial vehicles in Turkey, but its production capacity is low and it only assembles components sent from Korea.
The Jeonju plant in North Jeolla Province produces 50,000 buses and trucks a year, a number which Hyundai wanted to increase to 100,000 by introducing a second shift. With the refusal of the labor union, some 5,600 vehicles have not been produced for eight or nine months, making the company unable to receive new orders from Russia, Mexico and the Middle East.
(englishnews@chosun.com )
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