November 28, 2017 / 7:33 AM / a year ago

Hyundai workers stop building SUV ahead of U.S. launch as labour row escalates

SEOUL, Nov 28 (Reuters) - Hyundai Motor workers in South Korea have stopped building the Kona sport utility vehicle this week ahead of a U.S. launch - a protest against what the automaker’s labour union says are plans to trim assembly line headcount.

The union, which is also in annual talks with management over pay, warned that a wider strike was possible.

Hyundai has been in discussions with its labour union since October on production plans for the Kona, a key model that it hopes will reverse a U.S. sales slump.

The union contends that the automaker wants to introduce more automation and outsource more assembly of key sections to part makers - plans that it is vehemently opposed to. Hyundai management argues that the union is making “irrelevant demands” such as requests for extra windows in the factory as part of the production discussions.

The automaker’s decision to start production of the Kona on a new assembly line last week was made without consultation with the union and was unacceptable, union leader Ha Boo-young said in a statement, adding that a wider strike was possible “should there be another provocation by management.”

The move comes ahead of a planned unveiling of the U.S.-production version of the Kona at the Los Angeles Auto Show on Wednesday with U.S. sales slated to begin early next year. The Kona is currently sold in South Korea, where it has proven to be a popular model, as well as Europe.

The two days loss of production so far this week is equivalent to 1,230 vehicles, Hyundai said in a statement.

Hyundai Motor President Yoon Kap-han said it was regrettable that the labour union was disrupting production for a high-demand model at a time when most of its plants were “suffering from the worst sales slowdown.”

Hyundai Motor’s global sales fell 6 percent from January to September compared with the same period a year earlier, as a lack of SUV models hit sales in the U.S. market and a diplomatic row between Seoul and Beijing hurt sales in China. (Reporting by Hyunjoo Jin; Editing by Edwina Gibbs)

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