Immediate Evacuation and One-Week Shutdown for Employees... Major Corporations Like Samsung, LG, and Hyundai Go on High Alert [US-Iran War]

Shutdown of Local Operations and Crisis in Middle East Expansion

Immediate Evacuation by Home Appliance and Auto Industries with Regional Bases

Close Monitoring of Volatility in Logistics, Exchange Rates, and Oil Prices

Consideration

Amid U.S. and Israeli airstrikes on Iran, Korean companies with local subsidiaries and business sites in the region are facing the threat of shutdown. Companies such as Samsung Electronics, LG Electronics, and Hyundai Motor Group have immediately evacuated employees from their sites in Iran and Israel and are closely monitoring the situation. As the Middle East has recently emerged as a key growth market, it is expected that if the situation is prolonged, business operations for these companies will inevitably be disrupted.

According to industry sources on March 3, Samsung Electronics evacuated employees from its subsidiaries in Iran and Israel, where the conflict is ongoing, to neighboring countries such as Dubai, Egypt, and Jordan immediately after the incident occurred. Employees at subsidiaries in Saudi Arabia and Jordan are continuing to work as usual, while those at United Arab Emirates, Qatar, and Iraq subsidiaries have shifted to remote work. The company is considering further measures depending on how the situation develops, including a full transition to remote work, evacuation to third countries, or even repatriation.

A bird's-eye view of Hyundai Motors' Saudi production corporation (HMMME) factory. Hyundai Motor Group.

LG Electronics, which also has operations in neighboring countries, has taken steps to evacuate its employees. Korean staff and their families working at the Israel site have been evacuated in accordance with guidance from the local embassy. Reports indicate that the Korean employee dispatched to Iran also left the country last week. Additionally, the company is providing safety guidelines and advising employees working across Middle Eastern countries to limit travel.

Hyundai Motor Group, which is currently building a production plant (HMMME) in Saudi Arabia, is also keeping a close watch on the situation. While local airports have been closed, workers involved in the construction and other personnel residing in the area continue to report to work as usual while monitoring the situation. In some Middle Eastern markets, including Israel, showroom operations at dealerships have been suspended as a precaution. The company stated, "All employees in the Middle East are safe, and we are maintaining emergency communication protocols. We are continuously monitoring the situation in real time and will consider additional response measures as necessary."

Home Appliance and Automotive Industries Hit Hard as They Target the 'Global South'

The home appliance industry has been focusing on the emerging "Global South" markets due to the ongoing slump in demand. In particular, companies have been strengthening their presence in the Middle East, Southeast Asia, and Central and South America. In the Middle East, Samsung Electronics has targeted the B2B (business-to-business) market, especially in the air solutions sector. Last year, the company held the "Samsung Middle East Air Solution Day" in China, where it presented solutions to the Middle Eastern HVAC industry.

In the Middle East, Samsung Electronics operates largely through the sale of consumer products such as smartphones, TVs, and home appliances. The company has established its Middle East and North Africa (SEMENA) headquarters in Riyadh, Saudi Arabia, and maintains both a sales corporation and a semiconductor research center in Israel. Samsung Electronics also has sales operations in Iran, Jordan, and other countries in the region.

However, it has been reported that the company has scaled back its business in response to ongoing war risks, such as Iran's decision to blockade the Strait of Hormuz in June last year. An industry official said, "Given the ongoing international issues in the Middle East, we understand that business operations have been carried out in a limited manner."

LG Electronics, which has also placed its Global South strategy at the forefront this year, is now on high alert. The company has its Middle East and Africa regional headquarters (HQ) in Dubai. While its major subsidiaries and factories are not located in immediate conflict zones like Iran, it does have production plants in neighboring countries such as Saudi Arabia (air conditioners) and Egypt (TVs), which could be affected.

Notably, last month LG Electronics held "LG InnoFest" in Abu Dhabi, UAE, inviting more than 250 major business partners from the Middle East and Africa to present its regional business strategy. This was the first comprehensive overseas showcase of its main product lines in seven years since 2019. The company reportedly plans to expand the event to Central and South America and Asia this year, further seeking business opportunities in Global South markets.

The company is reviewing alternative logistics routes for its Middle Eastern subsidiaries in case of a blockade of the Strait of Hormuz and is also checking for potential demand impacts in cooperation with its partners. An LG Electronics official stated, "We are closely monitoring rising volatility in logistics, exchange rates, and oil prices, and keeping a watchful eye on industry outlooks related to our business."

Hyundai Motor also stated that if the conflict ends quickly, there should be no significant disruption to the construction of its plant. However, if the situation persists, it plans to seek alternative routes. Hyundai Motor intends to open its first automobile plant in the Middle East in Saudi Arabia in the fourth quarter of this year, aiming to develop it as a regional production hub for the rapidly growing markets of the Middle East and Africa.

This content was produced with the assistance of AI translation services.