Hyundao Case

Hyundai

The strike in 2012 has affected Sourth Korean plant's production line, which it delayed of 82000 vehicles and the dispute cost the company record 1.7trillion won in lost production. (Bloomberg, 2012) "Seoul-based Hyundai Motor estimate the dispute cost the company a record 1.7 trillion won in lost production".

Sign new contract: To able to have the plants back in work in order to reduce lost in revenue, Hyundai has compromise with the Labour Union and adjust the working hours and salary. The new contract has increase wages to 98000 won monthly base salaries. It has change from 10 morning and 10 evening shifts to 8 hours morning shift and 9-hour evening shift. The deduction of 3 hours working shift would lead to 15% lost of production in South Korea Plant. Therefore, Hyundai is planning to upgrade the Plants by making 264.6 million dollar investment to making up the 3 hours lost time by increase unit produce per hour. Ethics?

( Bloomberg, 2012)

Overseas Plant: In order to reduce the impact of strike happen back home, Hyundai has started expands its production all over the world since 2000. (See Figure 3)In addition, Hyundai wanted to reduce the heavily reliance on its South Korea Plant. Starting from last decade, the production of capacity has reduce from 93% in 2000, to 60% in 2008 when the strike took place, and down to 46% in 2011(Bloomberg, 2012) (See Figure) FDI?

Automation: To reduce the uncertainty factors such as strikes and mistake minimisation, Hyundai has relied on technology and small number of highly skills engineer and manager, to ensure the production line is in full efficiency and productive. Unlike Toyota which hiring large numbers of skilful workers and made their job as efficient as possible, Hyundai relied heavily on technology by automating as many processes as possible in order to eliminate workers. (Hyung Jea and You, 2011),

upgrade value chain?