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Hyundai Motor and the labor union agreed to reduce the scale of production relocation to the United States, significantly reduce Palisade hybrid production, and position the Ulsan plant as the mother plant to prioritize the production of new generation environmentally friendly vehicles.
south korea Hyundai Motor has reached an agreement with labor unions and decided to reduce planned production of some models in the United States to protect domestic employment and end months of negotiations over factory reconstruction.
The media reported on the 26th that the two parties signed an agreement drafted by the Employment Stability Commission, in which the number of Palisade hybrid SUVs transferred to the United States will be reduced by 63% from the originally planned 200,000 units to 74,000 units.
Hyundai originally planned to use US factory production capacity to reduce tariff costs and meet market demand. However, the labor union is concerned that the large-scale transfer of Palisade production capacity may affect domestic factory capacity utilization and employment stability, so it demands that Ulsan Factory 4 be retained as Palisade’s main production base.
The agreement also covers output and manpower allocation during the reconstruction of Ulsan Plant 1 and the second production line of Plant 4. After the reconstruction, the first factory will stop production of the current Kona small SUV, and the production of Ioniq 5 electric SUV will be transferred to the new electric vehicle factory by September next year.
The Genesis GV70 Extended Range Electric Vehicle (EREV), originally slated to be produced in North America, will also be produced at a new electric vehicle plant starting in March. The next generation of environmentally friendly vehicles, including gasoline-electric hybrid vehicles, will be prioritized for production at Ulsan Plant 4.
Industry insiders pointed out that this wave of production line adjustments shows that Hyundai Motor has positioned the Ulsan plant as the “mother plant”, taking the lead in developing and verifying the latest environmentally friendly vehicle technology, and then promoting it to global production bases.
Summary FAQ
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Its main objective is to balance domestic employment and trade union demands. The union was concerned that transferring large amounts of Palisade production capacity would reduce the Ulsan plant’s utilization rate, so it demanded that the main production base be maintained, and the two sides reached a reduction plan.
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The original plan was to move production of 200,000 vehicles to the United States, but this was eventually revised down by 63% to 74,000 vehicles. This means that although Hyundai Motor will still use US production capacity, the threshold for shifting production is significantly reduced.
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The industry believes that the Ulsan plant will be positioned as a mother plant, which will first develop and verify the latest environmentally friendly vehicle technology, and then promote it on a global basis. Including the Ioniq 5, GV70 EREV and next-generation gasoline-electric vehicles, all of these will be prioritized to be produced here or at new electric vehicle factories.
