Hyundai says battery plant delayed after US immigration raid

DETROIT – Construction on a Hyundai Motor-LG battery plant in Georgia that was raided by US immigration authorities is being delayed as the companies face labour shortages.

The work is being set back by several months following last week’s disruption, Hyundai chief executive officer Jose Munoz said in an interview on Sept 11.

“This is going to give us minimum two to three months’ delay because, now, all these people want to get back,” he said. “Then you need to see how can you fill those positions. And for the most part, those people are not in the US.”

The comments show the growing fallout from the Sept 4 raid in which US federal agents

detained 475 workers,

mostly South Koreans, at the battery plant site that is jointly operated by Hyundai and LG Energy Solution. With images of detainees shackled at the wrists, waist and ankles, the shock operation has reverberated throughout the industry and strained diplomatic ties between Seoul and Washington.

With the new plant delays, Hyundai will continue sourcing batteries from an SK On plant in Commerce, Georgia, Mr Munoz said.

LG said in a statement that it is “committed to our projects in the US and will continue to navigate the circumstances with the aim to continue necessary investments and business”.

A chartered plane carrying more than 300 workers from the plant who were detained during the raid

left the US on Sept 11,

bound for South Korea.

The economic ramifications are potentially just beginning.

The operation has cast doubt over billions of dollars of future investment in the US by South Korean companies. Construction has been disrupted at multiple LG Energy Solution sites across America, while some South Korean staff are baulking at assignments over fears of being caught in similar crackdowns. Hyundai pledged recently to increase its investment in the US to US$26 billion (S$33.3 billion) till end-2028, up from the US$21 billion it had promised in March. That earlier plan included US$9 billion to increase US vehicle production and US$12 billion on other initiatives, including a new steel mill in Louisiana.

“I’m really worried about that incident and we’re really glad they’re returning home safely,” Hyundai Motor Group chairman Chung Eui-sun said on Sept 11 at the Automotive News Congress. “Our government and the US government are working closely, and the visa regulation is very complicated. I hope we can make it, together, a better system.”

The timing of the raid came soon after South Korean President Lee Jae Myung and his US counterpart Donald Trump met to bolster their alliance. 

Commerce Secretary Howard Lutnick on Sept 11 suggested that Mr Trump plans to help facilitate short-term visas for foreign skilled workers needed to build new factories.

“I think he’s going to make a deal with different countries that when they want to build big here, he’ll find a way to get their workers proper work visas – meaning short-term work visas, train Americans and then head home,” Mr Lutnick said in a CNBC interview.

Mr Munoz said on Sept 11 that Hyundai is still committed to the US.

“Even though this has been a very unfortunate incident, the strategic importance of the US market for our company doesn’t change,” he said. “We have been making a lot of investments over the last few years and we will continue.”
BLOOMBERG