Hyundai Velosters on Hold as Workers Protest



Hyundai Motor unveiled the Veloster — a quirky coupe with one door on the driver’s side and two on the passenger’s — with great fanfare early this month.



But other than 52 models produced for pre-sale events, not a single one has rolled out of the auto maker’s assembly lines in its No. 1 plant in Ulsan. Some 3,000 unionized workers have kept the production lines from making the cars.



The workers are protesting recent moves by Hyundai to relocate some of them to four other Ulsan plants that need more employees. Automation at the No. 1 plant has reduced the need for staff there.



“The company guarantees job security for workers moving to other lines. The union is hurting the company’s competitiveness at a time when demand for fuel-efficient compact cars is rising amid high oil prices,” an Ulsan-based Hyundai spokesman told Dow Jones Newswires. “They are killing the company.”



In January, Hyundai stopped producing the Click subcompact hatchback and the Verna subcompact in the No. 1 plant to churn out the Accent subcompact and the Veloster. The plant now makes a small number of Accents, which accounts for a mere 30% of its utilization rate.



Union spokesman Chang Kyu-ho said that the workers “don’t want to leave the plant, as they are like a family.”



Hyundai has clashed with its workers many times before. Since 1987, it has had strikes occur every year except for 1994, 2009 and 2010.



The company said it is in talks with the union to have the workers start Veloster production. About 6,200 Velosters are on order as of Friday, along with 125,500 Accents. Hyundai originally expected to sell 18,000 Velosters domestically this year.



Hyundai spent a lot of money in commercial ads in an attempt to sell 18,000 units this year in its home market but it may end up selling far fewer.



Veloster orders may take longer than expected while the company and union negotiate. The union representative’s reasoning may be a really hard sell.