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Hyundai and Kia Allocates $760 Million Over Engine Fire MattersOn Friday, Hyundai Motor Co and partner Kia Motors Corp have held in reserve a total of 900 billion won ($757.86 million). This move aims to settle the U.S. class action hearing. Moreover, to address engine-related matters in the United States and South Korea. According to Hyundai Motor and Kia Motors, they will reproduce about 600 billion won. This decision has something to do with engine problems in July to September. Meanwhile, affiliate Kia Motors has laid by about 300 billion won. In a statement, the automakers stated the latest settlement offers the installation of a software update to lift safety. The clearing is together with the performance, cash compensation options, lifetime warranties, free inspection, and repair of the covered engines. Hyundai and Kia models have equipped a total of 4.17 million. In the meantime, as the U.S. settlement will be ongoing, the Theta II gasoline direct injection (GDI) engines will be affected. Automakers Recall Addressing Possibility of Engine Fires The two giant brands, together with the world’s fifth-biggest automaker by sales, has prompted nearly 1.7 million vehicles in the United States. The recall is to remind automakers to address the possibility of engine fires. Now, the U.S. safety regulator is inspecting whether the recalls protected enough vehicles and came into effect promptly. The examination comes after Kim Gwang-ho, then an engineer at Hyundai, flew to Washington in 2016. Moreover, the travel was to tell the National Highway Traffic Safety Administration to companies recall more vehicles over the problem, citing an internal report. In November, a news report indicated that the U.S. federal prosecutors had launched a criminal investigation. The investigation is to see if the recalls had been conducted properly. Hyundai and Kia stated they anticipated the U.S. District Court for the Central District of California to evaluate the proposed settlement. The reimbursement is for the preliminary approval before the end of October.
KRX:005380
by Financebroker
Hyundai Workers on Lowest BonusesThe unionized workers of Hyundai Motor Co. in South Korea on Monday voted to accept the lowest bonus given in almost two decades. And this was due to the widespread restructuring in the auto industry and the harmful trade war with Japan. On Tuesday, Hyundai announced the approval. And the firm successfully avoided a walkout by workers for the very first time in eight years. Aside from that, in all but four years since the creation of union in 1987, South Korean workers of Hyundai have staged strikes. As a result, it had drawn media and public criticism for threatening to walk out even though they have a relatively high annual wage of 92 million won or $75,866, on average as of 2018. And this does not yet include benefits and job security. In addition to that, the deal happened at the same time with tightened export curbs by Japan’s warning to damage Asia’s fourth-biggest economy. And this weighs on the auto industry who’s already struggling with production cuts. Also, it was facing job losses due to a slowdown in exports to the United States, Europe, and other countries. Hyundai and Other Automakers Meanwhile, U.S. automaker General Motors Co. closed one of its South Korean factories and reduced headcounts last year. And also, Renault’s South Korean unit is preparing for possible production cuts. Then, South Korea accounts for 37% of Hyundai Motor’s total production as of last year. And the automaker reduced its exposure to domestic production in favor of overseas output. Moreover, other automakers are bracing for intense annual wage negotiations. And this year, GM wants to freeze a base wage for two consecutive years. But South Korean union opposed to this plan saying it could cause a full strike this month. Also, Renault Samsung plans to cut production starting next month.
KRX:005380
by Financebroker