Hyundai Motor Group has begun operations at its third U.S. plant in Georgia, two and a half years after breaking ground. The facility is equipped with cutting-edge technology, incorporating artificial intelligence, information systems, and robots to dramatically improve productivity.
The automation rate at the plant is 40%—four times higher than the average 10% rate at other Hyundai factories. Hyundai has concentrated advanced systems and equipment in the facility, backed by a $8 billion investment, making it the company’s largest single-plant project to date.
More than 950 robots have been deployed across production lines capable of producing around 100,000 vehicles, outnumbering the plant’s roughly 880 production workers. However, the use of robots hasn’t reduced job opportunities, as Hyundai employs around 8,500 local workers.
Rather than replacing them, robots are primarily deployed for tasks that are physically demanding or difficult to standardize, while human workers take on more advanced responsibilities, such as programming and managing the digitalized production systems. Together, they form a highly efficient workflow that offers a glimpse into the future of manufacturing.
As Hyundai and Kia ramp up new plant construction and announce major investments in the United States, labor unions in S. Korea have voiced concerns over job security and are demanding more domestic investment.
However, it’s hard to imagine any company pouring billions into advanced facilities and job creation in a country where unproductive unions repeatedly strike for higher pay.
The only new Hyundai plant under construction in S. Korea is an electric vehicle–dedicated facility in Ulsan, slated for completion next year. It will be the first since the Asan plant opened in 1996—nearly three decades ago.
Hyundai Motor Group also plans to invest $8.5 billion to build a Hyundai Steel plant in the United States. Despite that, the Hyundai Steel union is on strike, demanding bonuses equivalent to those at Hyundai Motor.
The group’s shift in investment strategy isn’t limited to car manufacturing. With the steel industry in a slump, Hyundai Steel’s Incheon plant is set to suspend operations for a month in April.
Even so, the union is pressing for more money, raising questions about whether its tactics are simply misguided or deeply out of touch. Actions like these are driving companies to shift investment overseas instead of staying in S. Korea.
The Hyundai Steel union has asked whether the company has money to build a steel plant in the U.S. but not to pay out performance bonuses. But even a basic grasp of corporate finance would make the difference clear.
Investments are funded through means such as corporate bonds or the sale of idle assets, with the expectation of generating future revenue and profit.
Performance bonuses, on the other hand, require immediate profitability. Given such union behavior, it’s almost surprising that factories in S. Korea are still managing to run at all.
