South Korea’s top automaker Hyundai Motor feared of a severe production disruption due to the strike by the parts supplier Yoosung Enterprise which affected production. Two diesel engine lines of Hyundai had stopped production by the strike.
The dispute began over pay and working conditions, the strike was started on 16th May. Yoosung employees have been striking on and off since the beginning of the year over pay and shift time disagreements.
The country’s largest piston ring maker with 80 per cent market share stopped working due to the strike by the Union workers of Yoosung Enterprise on May 16 and sit-in strike at the company’s plant in Asan , South Chungcheong Province which started after 2days. Hyundai and its subsidiary car manufacturer Kia Motors are the world’s fifth-largest automaker by sales. They source piston rings for around 70 percent of their vehicles from Yoosung, whose main plant is at Asan, 80 kilometres (48 miles) south of Seoul.
On Friday the diesel version of the minivan Carnival was stopped by Kia at the plant in Gyeonggi Province. And on Monday sport utility vehicles, Hyundai diesel versions Santa Fe and Tucson ix production was reduced.
It could have resulted in loss of 48,000 units if the situation continues and lost revenues by the end of the month will be 827 billion won ($943 million). The Starex van and the light truck Porter are also facing difficulties since they are using these inventories.Piston rings, the key components in car engines are manufactured by Yoosung. Parts to the General Motors and Renault’s Korean unit were also supplied by Yoosung. The production of diesel engines at Ulsan plant was suspended by Hyundai due to the strike. Hyundai is now normalizing the condition affected by the strike.
The production at the diesel engine lines are partially normalized by them. Yoosung restarted production from Tuesday evening after the police broke up the sit-in strike Police were on guard at the plant Wednesday to help non-union members to normalise operations, but it is not clear when production would resume. On Tuesday, officers detained some 500 among 540 employees occupying the factory. 400 workers have been released while 100 are still in custody for questioning