[Exclusive] "To Increase Palisade Production, Allocate Ioniq 7"… Hyundai Motor Frustrated by Union's Stubbornness

Hyundai Labor and Management Clash Over Hourly Production Adjustment of Palisade
Union Troubles Grow as Popular Model Production Increases
Ulsan 4th Plant Union Requests Allocation of New Electric Vehicles Instead of Increased Volume
Potential for 'Family Feud' Between Plants

The labor and management of Hyundai Motor Company are clashing over the adjustment of the hourly production volume of the popular model Palisade. As the management seeks to increase the production line speed to boost output quickly, and the labor union strives to maintain the current work intensity, red lights have been lit on the Palisade export plans.

According to a comprehensive report from our coverage on the 27th, on the 24th, the labor union at Hyundai Motor's Ulsan Plant 4 held a delegates' meeting and finalized a demand to respond to the adjustment of hourly production volume. The union stated that even if they accept the expansion of hourly production volume, it must be a temporary adjustment for one year. They also requested that instead of increasing the line speed, the Palisade's successor electric vehicle (Ioniq 7) be assigned to Ulsan Plant 4.

Hyundai Palisade

In 2021, Hyundai Motor's labor and management agreed to increase the export volume of the Palisade. They decided to increase Palisade production by 20,000 units at Ulsan Plant 4 in exchange for moving some of the Staria production, which was previously at Ulsan Plant 4, to the Jeonju Plant.

The union is protesting that while the employment stability agreement made at that time includes an agreement on increased production, it does not include increasing the hourly input rate. They argue that raising the production line speed would subject workers to more intense labor, so caution is necessary.

The management is frustrated as the increase in Palisade production is urgently needed. Hyundai previously considered local production in the United States but abandoned the plan due to strong opposition from the union. The Palisade, a large sport utility vehicle (SUV), is a popular model selling more than 80,000 units annually in the U.S. Last year, over 100,000 units were exported worldwide.

Recently, Hyundai has gained momentum in expanding its global market share, especially in the U.S. market. Last year, Hyundai Motor Group ranked third in global automobile sales, following Toyota and Volkswagen. Notably, its U.S. market share surpassed 10% for the first time, reaching 10.3%. The large SUV Palisade, favored by American consumers, is the leading contributor to this market share expansion.

Hyundai has faced difficulties every time it tries to adjust production volumes by model due to union resistance. Not only production volume adjustments but also model assignments by plant and line transfers to overseas plants require union consent, which is criticized for reducing production flexibility.

Additionally, during the 2021 agreement to increase Palisade production, labor conflicts between the Ulsan Plant 4 and Jeonju Plant union executives escalated to physical altercations. Because of this, there are concerns that the current demand by Ulsan Plant 4 to secure the Palisade successor electric vehicle (Ioniq 7) model could ignite another 'internal fight' between plants. With the Ioniq 7 likely to be assigned to Hyundai Motor's Asan Plant, Ulsan Plant 4 has announced it will fight back. A union official at Ulsan Plant 4 said, "If management threatens the employment of union members, we will block it with strong resistance," adding, "We will use both negotiation and struggle as our two cards."