Hyundai's $21 billion U.S. investment: Korea must enhance Its own appeal

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Hyundai's $21 billion U.S. investment: Korea must enhance Its own appeal

Published: 26 Mar. 2025, 00:00 Updated: 26 Mar. 2025, 17:38

Audio report: written by reporters, read by AI

Hyundai Motor Group Executive Chair Euisun Chung announces a $21 billion investment in the United States as U.S. President Donald Trump, second from right, and Louisiana Gov. Jeff Landry, far right, stand in the Roosevelt Room at the White House in Washington on March 24. [AP/YONHAP]

Hyundai Motor Group has announced a new $21 billion investment in the United States over the next four years. Executive Chairman Chung Euisun revealed the plan during a meeting with U.S. President Donald Trump at the White House Tuesday. As part of this investment, Hyundai Steel will build a low-carbon automotive steel plant in Louisiana. Additionally, Hyundai Motor Group’s Metaplant America (HMGMA) factory in Savannah, Georgia, is set to be completed on April 26.

These projects are expected to create nearly 10,000 jobs — 1,300 at the Louisiana steel plant and 8,500 at the Georgia EV factory. The Georgia plant was first promised during a 2019 meeting between Chung and then-President Trump in Seoul, and its completion coincides with Trump’s second term. During their brief 3-minute-40-second interaction at the White House, Chung and Trump made eye contact 16 times. Trump praised Hyundai Motor, saying it was a “great company” and that it would not have to pay tariffs in the United States.

Hyundai’s continued investment in the United States is, to some extent, a business necessity. Since the automaker’s initial entry into the American market with the Pony 39 years ago, it has sold nearly 30 million cars in the country, with annual sales reaching 1 million units. To accommodate this demand, Hyundai plans to expand the Georgia plant’s production capacity by 200,000 vehicles, raising its annual U.S. manufacturing output to 1.2 million units. This is a strategic investment to bolster sales. The problem, however, is the troubling reality that Korean jobs continue to flow overseas.

Trump’s aggressive “onshoring” policy — using the looming 25 percent tariff hike set to take effect in a week as leverage — is accelerating the hollowing out of Korea’s manufacturing sector. Even GM Korea, which operates plants in Bupyeong and Changwon, is reportedly considering withdrawing from Korea if Trump’s tariff threat materializes. If this happens, what will become of the 11,000 workers at these factories?

Meanwhile, Korea itself is failing to safeguard existing jobs. Hyundai Steel recently had to resort to an extreme measure — locking out the factory — amid a strike demanding wage hikes to match Hyundai Motor’s salaries. The so-called “Gwangju Job Model” for compact car production has also been shaken, as workers broke their initial no-union pledge and joined the militant Korean Confederation of Trade Unions last year, further complicating Hyundai’s labor concerns.

To make matters worse, the main opposition party continues to push anti-business legislation, including stricter enforcement of the 52-hour workweek, amendments to the Commercial Act and the Yellow Envelope Act. These regulatory shackles are making Korea an increasingly unattractive place for investment. Lawmakers must first dismantle these obstacles.

As the Financial Times pointed out Tuesday, investing in the United States is not always the most advantageous option for companies. The country’s weak manufacturing base makes it difficult to secure skilled workers, and labor costs remain high. If Korea can establish a more favorable investment environment, some of these companies will choose to invest domestically instead. It is time for the political establishment to wake up and take decisive action.

Translated using generative AI and edited by Korea JoongAng Daily staff.