Wealth, jobs sparked local anger in US state before raid on Hyundai plant

Atlanta – Before the immigration raid on a battery plant in Georgia that has upended relations between the US and South Korea, there was growing resentment from locals who felt left out of the jobs, economic opportunities and wealth created by the factory, part of a massive US$7.6 billion (S$9.7 billion) manufacturing complex anchored by Hyundai Motor. 

In the nearby port city of Savannah, where more than half the population is black and most elected officials are Democrats, leaders questioned how jobs were being filled at the battery plant, a joint venture by South Korean companies Hyundai and LG Energy Solution, and other nearby factories.

Georgia Governor Brian Kemp, a Republican, and local politicians had touted the development as a boon to the entire region, eventually offering more than US$2 billion in taxpayer-subsidised incentives.

“First we’re told to support this because it will create jobs – then we’re told ‘because you’re not trained, I’ve got to bring these other people in’,” said Savannah State University Adjunct Professor Jamal Toure, host of a radio show and podcast, where the topic has been discussed.

“How do we benefit from this? For the average citizen, the average African American here, they don’t see the impact.”

Some 40km west of the city, the sprawling industrial complex that Hyundai calls Metaplant sits in once-rural Bryan County, where more than 70 per cent of residents are white and President Donald Trump and other Republicans have received strong support. The politics and demographics are different, but the concern over who wins from the surge in economic development is similar.

The fallout from the raid last week that saw 475 people, mostly South Koreans, rounded up by Immigration and Customs Enforcement agents and accused of working illegally is still playing out in Washington, Seoul and in corporate boardrooms around the world.

The South Korean workers flew home on Sept 11 after the countries’ top diplomats met in Washington in a bid to alleviate the tension between the governments.

Among local opponents, who run the gamut from activists focused on jobs for underserved communities to anti-development forces who broadly oppose change, there is often confusion about how the various factories operate and the difference between temporary jobs needed to set up a plant and longer-term roles once operations begin.

But as Mr Trump pushes for more foreign investment to fuel a manufacturing renaissance in the US, tensions like those seen around the electric vehicle (EV) battery plant outside Savannah are a risk for his ambitions. 

Indeed, Hyundai chief executive officer Jose Munoz said in an interview that construction work at the battery plant is being delayed by at least two months as the companies involved grapple with worker shortages.

South Korean firms from LG Energy to SK On are building some 22 plants in the US, but the companies say the projects hinge on moving trained engineers quickly across international borders – a practice being undermined by visa bottlenecks and heightened immigration scrutiny. 

Asian companies dominate the market for EV batteries, having developed the technology in their home countries for decades. Automakers looking to bring the expertise to the US have formed joint ventures to build new plants, and it is common for tensions over language, workplace culture or intellectual property concerns to arise during the process, according to two US battery manufacturing executives, who asked not to be identified discussing sensitive issues.

The manufacturers typically hire American companies for construction of the buildings that house production lines. But when it comes to specialised equipment, they rely on employees of the companies that sell it – typically South Korean, Japanese or Chinese – to work in the US temporarily to install the equipment at the plants. This is because they are trying to replicate a finely tuned system where tiny flaws, like a leak or loose pipe, can contaminate an entire line, causing defective batteries.

Once the equipment is up and running, local people are trained on the technology to fulfil permanent jobs, the executives said.

Other Asian manufacturers with plants in the US have tapped their overseas personnel for some technical roles during construction, but those specialists typically numbered in the dozens not in the hundreds, according to people familiar with their operations.

An executive at a Savannah-area staffing firm, who asked not to be identified for fear of disrupting her business, said Hyundai’s suppliers largely draw labour from firms in the area owned by fellow South Koreans.

To cope, the firm’s owner, who is not South Korean, began partnering with a staffing agency owned by South Koreans, supplying workers to the firm which otherwise did not have its own pipeline of talent, the executive said. 

She added that many workers in Savannah have soured on Hyundai and its suppliers because of strict work rules that can lead to quick dismissal for minor infractions. BLOOMBERG