The South Korean carmaker Hyundai has suspended its operations at its Ulsan complex –the largest productive car plant in the world –due to a lack of parts because of the coronavirus hampering China’s industrial output.
Due to the virus outbreak, multiple auto part companies in China have closed down leading to a shortage of parts. This has led to Hyundai running out of the wiring harnesses that connect vehicles’ complex electronics.
An Ulsan production line worker said,
It’s a shame that I can’t come to work and have to accept a pay cut, and it is a very uncomfortable feeling.
This could be the start of a phenomenon that will be repeated around the globe as per experts. According to analysts, the shutdown will cost the company a staggering $500 million for five days. They aren’t the only company that is halting production as Kia is also stopping production in three plants for a day, Renault is also contemplating halting production next week and Fiat is thinking of doing the same in Europe.
Cheong In-kyo, a professor of economics at Korea’s Inha University says,
The biggest problem is that we don’t know how the outbreak in China will unfold. South Korean companies rely heavily on China for parts and components. The problem is even if just one part is missing, you can’t do anything.
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