Coronavirus threat forces world’s biggest car factory to shut its operations
The most productive car factory in the world, South Korea’s Hyundai company has suspended operations at its giant Ulsan complex, hamstrung by a lack of parts with the coronavirus outbreak crippling China’s industrial output.
The five-plant network can make 1.4 million vehicles annually, in a coastal location facilitating importing components and exporting cars globally.
But supply lines are crucial in an ever more interconnected worldwide economy and the coronavirus outbreak in China has seen Beijing order factories closed in several areas as it seeks to contain the epidemic.
As a result, Hyundai — which with its affiliate Kia ranks as the world’s fifth-largest auto manufacturer — has run out of the wiring harnesses that connect vehicles’ complex electronics.
It is having to suspend production at its factories across South Korea, putting 25,000 workers on forced leave and partial wages, healthy victims of the disease outbreak across the Yellow Sea.
“It’s a shame that I can’t come to work and have to accept a pay cut,” said an Ulsan production line staffer surnamed Park. “It’s a very uncomfortable feeling.”
The closures could be the first example of a phenomenon that rolls out around the world, analysts say.
The impact on Hyundai will be eye-watering, with analysts estimating a five-day South Korean shutdown to cost the firm at least six hundred billion won (US$500 million).