Hyundai Motor Co, South Korea's biggest automaker, said it may shift production of buses and trucks to China after its union twice rejected a proposal to add an extra shift to the company's domestic commercial vehicle plant.
Assembling vehicles in southern China's Guangzhou city "could be an option" if a second shift is not introduced in Jeonju, South Korea, the vehicle maker's commercial division president Choi Han-young said yesterday.
Union strikes, an annual ritual among South Korean companies including Hyundai Motor, cost the Seoul-based carmaker an estimated 1.6 trillion won (US$1.7 billion) in lost sales last year after production of 115,683 vehicles was disrupted. The carmaker needs two shifts to meet the target of nearly tripling its global commercial vehicle sales to 140,000 units by 2010.
Hyundai Motor's factory in Jeonju, south of Seoul, operates at less than half its annual capacity of 125,000 buses and trucks because of the absence of a second shift. The company's two passenger car assemblies in South Korea work double shifts.
The automaker agreed in June 2005 to set up a venture with Guangzhou Automobile Co (
Talks on the venture, which had stalled, are back on and making good progress, the Chosun Ilbo daily said yesterday, citing Hyundai Motor. The Guangzhou plant would be carmaker's first large commercial vehicle plant abroad, the daily said.
The company told the labor union at its Jeonju plant that it may move some bus production abroad after union members voted against the added shift on Feb. 2, Hyundai spokesman Jake Jang said in a phone interview last week.
Hyundai Motor said yesterday it has an order backlog for 5,600 buses.
The Jeonju factory has one nine-hour shift. The carmaker's two other South Korean factories both have two 10-hour shifts.
The union cites deteriorating working conditions as the reason for opposing the additional shift.
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