Hyundai says battery plant delayed after immigration raid
The operation has cast doubt over billions of US dollars of South Korean companies’ future investment in the US
[DETROIT] Construction on a Hyundai Motor-LG battery plant in Georgia that was raided by US immigration authorities is being delayed as the companies face labour shortages.
The work is being set back by several months following last week’s disruption, Hyundai chief executive officer Jose Munoz said on Thursday (Sep 11).
“This is going to give us a minimum of two to three months delay, because now all these people want to get back,” he said. “Then you need to see how you can fill those positions. And for the most part, those people are not in the US.”
The comments show the growing fallout from the Sep 4 raid in which federal agents detained 475 workers, mostly South Koreans, at the battery plant site that’s jointly operated by Hyundai and LG Energy Solution. With images of detainees shackled at the wrists, waist and ankles, the shock operation has reverberated throughout the industry and strained diplomatic ties between Seoul and Washington.
With the new plant delays, Hyundai will continue sourcing batteries from an SK On plant in Commerce, Georgia, Munoz said.
LG said that it’s “committed to our projects in the US and will continue to navigate the circumstances with the aim to continue necessary investments and business”.
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Efforts to repatriate workers are moving forward and the chartered plane bringing them back is expected to depart the US on Thursday and arrive in South Korea on Friday.
The economic ramifications are potentially just beginning.
The operation has cast doubt over billions of US dollars of South Korean companies’ future investment in the US. Construction has been disrupted at multiple LG Energy Solution sites across the US, while some South Korean staff are baulking at assignments over fears of being caught in similar crackdowns.
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Hyundai pledged recently to increase its investment in the US to US$26 billion till 2028, up from the US$21 billion it had promised in March. That earlier plan included US$9 billion to increase US vehicle production, and US$12 billion on other initiatives, including a new steel mill in Louisiana.
“I’m really worried about that incident, and we are really glad they’re returning home safely,” Hyundai Motor Group chairman Euisun Chung said on Thursday at the Automotive News Congress. “Our government and the US government are working closely, and the visa regulation is very complicated. I hope we can make it, together, a better system.”
The timing of the raid came soon after South Korean President Lee Jae Myung and US President Donald Trump met to bolster their alliance.
Commerce Secretary Howard Lutnick on Thursday suggested Trump plans to help facilitate short-term visas for foreign skilled workers needed to build new factories.
“I think he’s going to make a deal with different countries that when they want to build big here, he will find a way to get their workers proper work visas, meaning short-term work visas, train Americans and then head home,” Lutnick said in a CNBC interview.
Munoz said on Thursday that Hyundai is still committed to the US.
“Even though this has been a very unfortunate incident, the strategic importance of the US market for our company doesn’t change,” he said. “We have been making a lot of investments over the last few years, and we will continue.” BLOOMBERG
