Hyundai Motor and its affiliate Kia Motors have seen their shares sliding even further after the automakers’ unions announced the start of a partial strike that would end on September 26.
Hyundai – and its falling shares – took the headlines these days because of its record bid – $10 billion – on a prized land lot in Seoul, to be used as the site of the company’s new headquarters in the near future. Investor resent following the announcement, as well as reports that the carmaker’s board was unaware of the final acquisition price triggered a sharp share drop.
Now, Hyundai dropped a further 2% to close at 191,500 won in Seoul trading, the lowest figure achieved since May 2013. Its affiliate Kia also slid 2.6%.
“The unions’ announcements triggered concerns that the strikes at Hyundai and Kia may take longer than expected,” said Kwon Soon Woo, an analyst at HI Investment & Securities Co. “This will lead to an increase in lost production which may hurt the companies’ third quarter earnings.”
“The companies have proven that they have an abundance of cash through this deal,” commented the unions in separate statements.
According to union spokesman Hwang Ki Tae, Hyundai workers will begin the partial strike today and conclude it on September 26, while Kia’s employees will do the same tomorrow and on Sept. 26.