Report: Police break up Hyundai supplier protest, arrest 500

[Rania Elhoseny]

Labor strife can wreak havoc on manufacturing, even when the workers on strike are miles away from the facility. Hyundai knows this all too well, as Automotive News reports that workers at supplier Yoosung Enterprise Co. occupied the production lines at a Hyundai assembly plant after failing to reach a deal on wages and shift systems. In fact, the sit-in became contentious enough that the police were called in to remove the workers; an action that led to the arrest of 500 disgruntled laborers.

Hyundai claims the engine plant will soon be restarted, but the larger issue is likely whether a deal can be struck. Yoosung supplies 70 percent of all the piston rings used in Hyundai vehicles, and a prolonged strike could result in some supply chain issues, even in the States. While production at the Hyundai plant in Alabama has 60 days of parts in stock, the automaker still imports the 1.8-liter engine used in the Elantra. A spokesperson from Hyundai reportedly told Automotive News that he didn't know if the engine used parts from Yoosung and he also wasn't sure how many engines were in stock.

According to the Chosun Ilbo and Ward's Auto, the disgruntled supplier could also cause disruptions well beyond the house of Hyundai – Yoosung is one of about a dozen companies that hold a 70 percent share of this particular auto parts market. Other companies that could face parts shortages include Kia and General Motors.

While we're not likely to feel the pinch of any piston ring shortages any time soon, this issue could get ugly if a resolution isn't reached. Hyundai currently only has a 25-day supply of these vehicles, so any issue lasting more than a few weeks could result in decreased stock levels.