April 26, 2024

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[THE INVESTOR] Hyundai Motor’s union said on June 19 it will take legal action if the company signs a contract to invest in a local car-manufacturing joint venture proposed by a municipal government.

Hyundai originally planned to sign an agreement with the Gwangju city government to become the second-largest shareholder of the car production JV, which will assemble vehicles under an original equipment manufacturing contract.

But the plan was delayed to next month as the mayor of the city government was replaced in the June 13 local elections, a company spokesman said over the phone. 

Hyundai’s 51,000-member union will bring the company‘s plan to invest about 53 billion won (US$48 million) in the vehicle production JV to court for breach of trust and violation of an existing collective agreement, the union said in a statement.

The Gwangju government has been pushing to build a 700 billion-won car-manufacturing JV with capital of 280 billion won and a loan of 420 billion won and aims to complete the plant by 2020, he said.

Of the 280 billion won capital, Hyundai will foot 53 billion won and the remaining 227 billion won is to be provided by the Gwangju government, making it the biggest shareholder.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)