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June 12, 2022

Truckers Strike Threatens To Hit Hyundai, Kia Vehicle Supply

Production at Hyundai Motor Group’s biggest factory complex fell by half because of a shortage of parts caused by a trucker’s strike in South Korea. The automaker’s Ulsan Plants—which assembles vehicles such as the Tucson (see lead photo) is operating at about 50 to 60 percent capacity.

According to wire reports, trucks have become unavailable because of the strike leading both Kia and Hyundai to seek alternative ways to transport their vehicles. At Kia, employees were reportedly spotted driving newly-produced cars on the streets to warehouses.

Meanwhile, Hyundai has confirmed that they are experiencing partial production disruptions at its Ulsan plants but refused to elaborate any further.

Thousands of South Korean truckers have been on strike this week to protest the surge in fuel costs, disrupting production, slowing activity at ports and posing new risks to a strained global supply chain.

It’s uncertain how long the strikes will continue, but a prolonged dispute threatens to have ripple effects across the globe, probably including Hyundai Philippines’ planned re-launch in July.

It must be remembered that the revamped Hyundai Motor Philippines (HMPH) plans to source its products only via South Korea and Indonesia. Among the launch vehicles planned, the Staria, Tucson, Santa Fe, and Kona are all assembled in South Korea. Only the Creta is currently assembled in Indonesia.

South Korea is a major supplier of semiconductors, smartphones, autos, batteries, and electronics goods and the strike further raises uncertainty over supply chains already disrupted by China’s strict COVID restrictions and Russia’s invasion of Ukraine.

At the port for Ulsan, the industrial hub where much of the strike action has occurred, container traffic has been completely suspended since Tuesday.

At Busan port, which accounts for 80 percent of the country’s container activity, traffic was down to a third of normal levels on Friday, a government official said.

Some 7,500 members, or about 35 percent of the Cargo Truckers Solidarity union joined the strike.

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