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Seoul flagged issues with Hyundai’s US investment plan

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By Reuters
  • Published KST
  • Updated KST
Vehicles move on the line at the Hyundai Motor Group Metaplant America in Ellabell, Ga., March 26. AP-Yonhap

Vehicles move on the line at the Hyundai Motor Group Metaplant America in Ellabell, Ga., March 26. AP-Yonhap

Korea's industry minister said on Monday that the government had expressed concerns over Hyundai announcing multibillion-dollar U.S. investment plans at the same time that Seoul was involved in delicate trade negotiations with Washington.

"We told Hyundai that (its) conduct was deeply regrettable, especially considering that our efforts have been made for the sake of Hyundai and Kia's industry," Industry Minister Kim Jung-kwan told the National Assembly in response to questions.

"I believe that Hyundai now fully understands the Korean public sentiment," Kim said. He declined to comment on how Hyundai had responded to his concerns.

Hyundai did not immediately respond to a request for comment.

Independent lawmaker Kim Jong-min earlier criticized Hyundai for trying to gain favour with the Trump administration, thereby weakening Korea's leverage during the trade talks. The Korean carmaker announced last month it would raise its U.S. investment plan by 32 percent to $11.6 billion, only two weeks after its new electric car battery factory in Georgia was raided by U.S. immigration authorities.

The raid led to the arrest of hundreds of workers and sent shockwaves across Korea, which is a key U.S. ally and a major investor in the country.

Seoul has also locked horns with Washington over $350 billion in U.S. investments, as part of talks aimed at cutting tariffs on cars, Korea's key exports to the U.S.

"Isn't the Korea–U.S. tariff negotiation essentially a negotiation concerning Hyundai?" the lawmaker asked. "Since Hyundai is the main player in this issue, I believe that the way Hyundai responded was not helpful to the negotiations."

Hyundai Motor's parent group in March announced a $21 billion investment in the United States with President Donald Trump at the White House. Later that month, Trump unveiled a 25 percent tariff on imported vehicles.

In August, Hyundai announced plans to increase the investment to $26 billion, following Trump's summit with President Lee Jae Myung.

Two weeks after the raid, Hyundai Motor co-CEO Jose Munoz announced plans to produce more than 80 percent of the vehicles it sells in the United States in the U.S. by 2030 in response to U.S. tariffs, as it ramps up its Georgia plant's capacity.