ID :
183547
Sun, 05/22/2011 - 07:04
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Shortlink :
https://oananews.org//node/183547
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Labor dispute at major auto parts maker feared to hit automakers
SEOUL (Yonhap) - A labor strike at one of South Korea's leading auto parts makers is feared to threaten vehicle manufacturers here due to a possibly prolonged supply disruption of major engine components, market observers said Sunday.
Unionized workers at Yoosung Enterprise Co., a car component maker headquartered in Asan, about 90 kilometers south of Seoul, started a walkout by occupying its main production plants on Wednesday as they failed to find common ground with their management on working conditions and salaries.
Yoosung Enterprise specializes in producing piston rings, cylinder liners and other key components needed to manufacture car engines. Of its five plants, the company shut down two, located in Asan and Yeongdong, in response to the labor dispute.
The company currently supplies key engine components to all five automakers here, which includes Hyundai Motor Co., Kia Motors Corp. and GM Korea Co., the South Korean unit of U.S. automaker General Motors Co.
In particular, Hyundai Motor and Kia Motors, the nation's two largest automakers, depend heavily on its supply as they receive 70 percent of engine-related components from Yoosung Enterprise. The remainder come from smaller supplier Korea Piston Ring Inc.
Market watchers say that if the strike deepens, local carmakers have no choice but to stop their production as they cannot find alternative supply channels. Korea Piston Ring reportedly has no further production capacity to offset the shortage prompted by the work disruptions at Yoosung Enterprise.
"A prolonged walkout at Yoosung could have a devastating impact on local carmakers, dampening their recent fast advances in overseas markets. It would also have a far-reaching ripple effect on other related industries," an industry official said.
Unionized workers at Yoosung Enterprise Co., a car component maker headquartered in Asan, about 90 kilometers south of Seoul, started a walkout by occupying its main production plants on Wednesday as they failed to find common ground with their management on working conditions and salaries.
Yoosung Enterprise specializes in producing piston rings, cylinder liners and other key components needed to manufacture car engines. Of its five plants, the company shut down two, located in Asan and Yeongdong, in response to the labor dispute.
The company currently supplies key engine components to all five automakers here, which includes Hyundai Motor Co., Kia Motors Corp. and GM Korea Co., the South Korean unit of U.S. automaker General Motors Co.
In particular, Hyundai Motor and Kia Motors, the nation's two largest automakers, depend heavily on its supply as they receive 70 percent of engine-related components from Yoosung Enterprise. The remainder come from smaller supplier Korea Piston Ring Inc.
Market watchers say that if the strike deepens, local carmakers have no choice but to stop their production as they cannot find alternative supply channels. Korea Piston Ring reportedly has no further production capacity to offset the shortage prompted by the work disruptions at Yoosung Enterprise.
"A prolonged walkout at Yoosung could have a devastating impact on local carmakers, dampening their recent fast advances in overseas markets. It would also have a far-reaching ripple effect on other related industries," an industry official said.
