South Korean companies in China have been smashed by Beijing’s upset reaction to Seoul’s decision to deploy a U.S. anti-missile system, however the boycotts and regulatory pressure on companies like Hyundai and Lotte are rebounding on their Chinese employees and providers.
South Korean companies are a significant employer in China, with firms such as Hyundai, mobile phone producer Samsung Electronics, and retail huge Lotte Group directly producing some 700,000 jobs in China, as per a Korea trade promo company, and there are a lot more down the supply chain.
Hyundai, which states its Chinese affiliates and providers alone produce a total of 90,000 jobs, has responded to dropping sales by cutting production.
In Beijing’s industrial residential area of Shunyi, where Hyundai has its biggest overseas manufacturing base, its providers, employees and local sellers who depend upon them are feeling the pinch.
“We have not worked weekends since a month back and don’t know when it will get back to normal,” stated a provider of hub caps to Hyundai.
“We can do nothing but wait while losing cash.”
Hyundai’s Beijing plants, which formerly operated 24 Hr, 7 days a week, are now running just 8am to 5pm on a four-day week, and concerns of more output cuts are unnerving those operating in its supply chain and local stores.
Couriers complain deliveries to Hyundai’s primary plant fell between a half and two-thirds, while the owner of a close-by convenience store stated his company had been hit since wages at the plant were dropped.
The CEO of a South Korean car parts provider having more than 100 Chinese workers stated his factory’s utilization rate fell by 30 percent. He had not laid anyone off yet, but stated the future was uncertain.
