SEOUL -- South Korean police have entered a factory run by auto parts supplier Yoosung Enterprise Co. to disperse striking workers who occupied production lines after failing to agree on new wage and shift systems, according to news reports today.
The weeklong strike at Yoosung, which provides 70 percent of the piston rings used in vehicles made by Hyundai Motor Co. and Kia Motors Corp., crippled Hyundai's production of SUVs and diesel engines this week.
After police moved in, Hyundai said it expects to be able to resume output at two closed engine lines, according to The Wall Street Journal.
A spokeswoman at Yoosung told the Journal that production will resume soon, but could not give specifics.
All clear at U.S. plants
Meanwhile, Hyundai and Kia manufacturing operations in the United States are operating on normal schedules.
Hyundai’s U.S. manufacturing plant in Montgomery, Ala., has not changed its vehicle or engine production schedule as a result of the labor dispute in Korea, according to Robert Burns, spokesman for Hyundai Motor Manufacturing Alabama.
The plant assembles all the Sonata mid-sized sedans sold in the United States and most of the market’s Elantra compacts.
The plant also produces Hyundai’s four-cylinder Theta engine used in the Sonata, as well as the Santa Fe SUV and in the Kia Sorento SUV built at Kia’s plant in West Point, Ga. The Theta engine uses parts from Yoosung, but the engine line at Hyundai’s Alabama plant has enough parts to continue production for 60 days, Burns said.
Hyundai Motor Manufacturing Georgia imports the 1.8-liter Nu engine used in the Elantra from Korea. Burns said he did not know if Yoosung parts were used in the Elantra’s engine. He said he also did not know how many engines were in inventory at the Alabama plant.
Production at Kia’s plant in Georgia has not been affected, according to Corinne Hodges, a spokeswoman for Kia Motors Manufacturing Georgia.
Kia’s plant in Georgia imports V-6 Lambda engines from Korea for Sorento and Santa Fe production. It’s unclear whether the engines use parts from Yoosung, and Hodges declined to comment on the current inventory of V-6 engines at the Georgia plant.
Combined, Hyundai and Kia had the leanest inventory of any automaker in the United States with a 25-day supply as of May 1, according to the Automotive News Data Center.
If the supply of Korean-built vehicles is interrupted, or if Hyundai and Kia U.S. plants see their assembly lines idled because parts shortages, it could slow the red-hot sales momentum of the brands.
Hyundai sold 204,374 new vehicles in the first four months of the year, up 31 percent from the same period in 2010. Kia boosted sales 42 percent to 151,848 vehicles in the same period.
The chairman of Hyundai’s dealer council said he has heard few details from Hyundai’s U.S. officials.
“The only thing I know is that HMA is in communication with HMC to understand what’s going on and that HMC is working with the supplier,” said Scott Fink, chairman of Hyundai’s dealer council and owner of three Hyundai dealerships in Florida.
Fink says Hyundai dealers can’t keep enough cars in stock to keep up with demand.
He added, though, that labor disputes in South Korea are a nearly annual occurrence.
“We’re hopeful that this situation winds up being nothing,” he said. “I talked to a couple of dealers, and the dealers are not going to get their heart rate up until they hear from HMA.”
Ryan Beene and Reuters contributed to this report.