"Let's Make Batteries Ourselves" Union Demand Puts Management in a Dilemma

Company Side "Trillions Won Investment Low Profitability" Reluctant

Hyundai Motor Ulsan Plant
[Image source=Yonhap News]

[Asia Economy Reporter Changhwan Lee] The Hyundai Motor labor union has demanded that the company directly produce batteries for electric vehicles. The company has expressed reluctance, citing the enormous investment required and the limited practical benefits.

Critics point out that the Hyundai Motor union is overstepping its bounds in company management by pushing for retirement age extension and the withdrawal of investment plans in the United States, focusing solely on securing jobs for its members.

According to the automotive industry on the 24th, the Hyundai Motor union, currently negotiating wages and collective agreements this year, has presented direct battery production as one of its separate demands.

The union urged direct production, arguing that even leading automakers like Germany's Volkswagen are moving to direct production to ensure stable battery supply, and that if Hyundai Motor remains as is, it will be limited to a simple assembly plant. They also claimed that to enhance competitiveness as a global company, a system must be established to directly produce not only batteries but also semiconductors and electronic components.

The company expressed a difficult position. They said they might consider it if there is proof that profitability and production costs are significantly better than external procurement, but currently, such points are not certain.

Hyundai Motor currently sees the automotive industry as one where finished car manufacturers and IT and battery companies are engaged in strategic partnerships, and premature business entry could lead to production disruptions and quality issues due to backlash from existing companies.

The company also stated that there is a significant gap in basic battery-related technology between battery specialists like LG Energy Solution and Samsung SDI and Hyundai Motor, and that securing in-house personnel is also limited.

The union also stated that core parts for future growth areas such as Urban Air Mobility (UAM) must be produced domestically. They cited avoiding labor-management conflicts, creating new jobs, and employment stability as reasons.

In response, the company said that since it will take more than 10 years from product development to mass production, it is premature to decide on domestic factory production at this stage.

Additionally, the union is simultaneously making difficult demands such as extending the retirement age, withdrawing investments in the United States, and reinstating dismissed workers. This has become a situation where it is not a simple wage negotiation but interference in the company's inherent management rights.

Professor Hogun Lee of the Automotive Department at Daeduk University expressed concern, saying, "The global management situation of the domestic automobile industry is becoming increasingly difficult, and the union's unreasonable demands could ultimately weaken the company's competitiveness."