SEOUL -- Labor demands could delay the launch of a Hyundai Motor Co. joint venture with DaimlerChrysler AG to make trucks in South Korea, Hyundai said on Friday.
DaimlerChrysler, the world's fifth biggest auto maker and Hyundai, South Korea's top auto maker, plan to hold a 50 percent stake each in the 400 million euro ($467.7 million) joint venture.
A Hyundai official said talks with unions had continued for months over issues such as a union demand for job guarantees for workers transferred to the joint venture.
"The joint venture is something that has to be realized," the spokesman said. The 10-year job guarantee issue was difficult for management to accept, he added.
"The timing of the launch has not been set in stone and can be delayed," he said.
But no decision had been made on postponing the deal as talks were continuing, the spokesman said.
Moody's Investors Service said on Friday it had upgraded the debt ratings of Hyundai Motor to Ba1 from Ba2 and gave the auto maker a stable rating outlook.
"The upgrade is based on HMC's (Hyundai Motor Co) continuing solid operating performance and improving debt coverage measures," Moody's said in a statement.
The upgrade also reflected Hyundai's growing global presence and dominant market position in South Korea, the statement said.
The venture, which Hyundai has said it hopes to launch in the first half of this year, would strengthen links between the car makers. U.S.-German DaimlerChrysler owns 10 percent of Hyundai.
South Korea suffers regular bouts of labor unrest and there has been rising concern among analysts the administration of President Roh Moo Hyun, who rose to office on a populist platform, has been soft in dealing with unions.
Severance pay and labour involvement in management were also contentious issues, the Maeil Business Newspaper reported.
Analysts have said a delayed launch of the venture would not have a serious impact on Hyundai, since cars, rather than commercial vehicles, accounted for the bulk of its earnings.
But any strained ties with DaimlerChrysler could take some of the shine off Hyundai, analysts said.