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Hyundai Motor's Overseas Manpower Reaches a New High
Korean Auto Workers Price Themselves out of Market
Hyundai Motor's Overseas Manpower Reaches a New High
  • By Jung Min-hee
  • July 13, 2018, 11:48
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Hyundai Motor’s overseas production is increasing compared to domestic workplaces suffering from chronic high wages and low productivity.
Hyundai Motor’s overseas production is increasing as its domestic plants suffer from high wages and low labor productivity.

Hyundai Motor Company’s overseas labor force has hit a record high once again. The trend is expected to continue as production is increasing overseas in comparison to domestic plants that suffer from high wages and low productivity.

According to the “2018 Sustainability Report” released by Hyundai Motors on the 12th, the number of overseas employees among the total number of employees (122,217) increased by 1,911 to 53,341(43.6%) last year, a record high. Domestic labor force stood at 68,876, 1,055 employees more than previous year. The number of overseas employees, which was at 29,125 in 2011, increased by more than 83% for the last six years and is continuing to record a new high every year. During the same period, the number of domestic employees increased only by 20% (11,573).

This is because Hyundai Motor has increased production in the US, China, and Europe versus Korea which has low productivity. Hyundai Motor Company’s Korean plant’ Hours Per Vehicle (HPV) is over 26 hours, which is significantly less productive than those of the US (14.7 hours) and China (17.7 hours). On the other hand, the labor cost is 15% of the total sales, which is much higher than competitors that have less than 10% labor cost ratio. For this reason, Hyundai Motor has increase the Chinese plants’ production capacity from 600,000 units to 1.65 million units after 2012 and increased the US production capacity in 2011 from 300,000 units to 370,000 units. The Turkish plant production capacity increased by 200,000 in 2013, and the Czechs plant production capacity increased in 2014 from 200,000 units to 330,000 units.

Last year, Hyundai Motor’s US manpower surpassed the 10,000 mark for the first time with 10,942 employees and European manpower drew 9,955 employees with 3,300 additional workers, which was due to the impact of Turkey joining the European region from other region last year, a Hyundai Motor official explained.