Hyundai has stopped production of diesel engine at its Ulsan plant due to a protracted strike from component supplier Yoosung Enterprise , Yonhap news reported on Tuesday.
Yoosung Enterprise, which supplies 70 per cent of the piston rings used in the engines of Hyundai and its affiliate Kia Motors, halted production from May 18 after union members occupied production lines over disagreements on new wage and shift systems.
Hyundai Motor has already been forced to halt its assembly line for the Tucson ix sport utility vehicle, while its affiliate Kia Motors has been forced to stop the line for its Carnival passenger van.
Because a car is made up of more than 20,000 parts, disruption in supply of any single part will inevitably lead to the halt of operations of 5,000 other parts makers that supply products to automakers here, KAMA said.
The Korea Automobile Manufacturers Association said automakers and suppliers could lose up to five trillion won (US$4.57 billion) if the stoppage goes on until the end of June.
“We urge the labour union of Yoosung Enterprise to immediately end its illegal occupation of plants, considering its negative impact on the auto industry and the country’s economy,” it said in a statement.