[Edaily Reporter LEE YUNHWA ] As HyundaiMotor Company moves forward with plans to transfer the production of 74,000 units per year of the Palisade Hybrid—currently manufactured at its Ulsan plant—to its U.S. facilities by the second quarter of next year, labor and management are continuing discussions regarding measures to secure domestic production volumes and ensure job stability.

As profitability deteriorates due to the prolonged burden of U.S. tariffs, increasing the share of local production in the U.S. has become increasingly necessary. Attention is now focused on how labor and management will coordinate to preserve domestic production volumes and ensure job stability in the face of the overseas transfer of domestic production.

According to industry sources on the 11th, HyundaiMotor is currently in discussions with the union to implement a plan to relocate the production of 74,000 units of the Palisade Hybrid—currently manufactured at the Ulsan plant—to its U.S. plant in the second quarter of next year.

Management had been pushing to shift 200,000 units of domestic production overseas earlier this year, but during negotiations with the union, that figure was reduced to 74,000 units. In addition, the union is demanding that management implement employment stability measures to ensure that the reduction in production volume does not lead to lower capacity utilization rates at domestic plants or job insecurity.

Since April of this year, the HyundaiMotor Union’s executive board has held six to seven meetings with shop stewards from Plants 1 and 4 to gather feedback from the shop floor and is currently conducting working-level discussions with management based on this input. Key demands include securing domestic vehicle models to replace the volume being transferred overseas, maintaining production levels during the restructuring period, and workforce management measures such as job reassignments.

While expanding local production in the U.S. could reduce the tariff burden on finished vehicles produced in Korea for export, it could also lead to concerns about a decline in domestic plant utilization rates and job insecurity. The union’s position is that measures such as securing vehicle models to replace the transferred production volume and redeploying personnel at domestic plants are necessary to address these concerns.

In connection with this, to minimize production disruptions caused by the Ulsan Plant reconstruction and alleviate workers’ employment concerns, the union is also demanding that production volume—equivalent to 80,000 units per year and two monthly overtime shifts—be maintained until the reconstruction of Ulsan Plant No. 4 is completed.

The union argued, “While the reduction in the volume of production being transferred overseas compared to the initial plan is an achievement, it is insufficient to guarantee the long-term production base and employment at domestic plants,” adding, “We must translate the demands from the front lines into concrete measures for employment stability and reach a specific agreement regarding production volume and workforce management.”

With the burden of auto tariffs imposed by the Trump administration in the U.S. persisting, HyundaiMotor—which has already incurred losses amounting to trillions of won this year alone—is in desperate need of shifting domestic production to its U.S. plants. While vehicles manufactured in Korea and exported to the U.S. are subject to tariffs, local production allows the company to avoid them; therefore, to defend profitability, HyundaiMotor has no choice but to increase its share of production in North America. In particular, models with high demand in North America, such as the Palisade Hybrid, have an even greater need for a shift to local production.

Global manufacturing trends are also rapidly shifting toward “production near the point of consumption.” As the U.S. uses tariffs and subsidy policies to pressure companies into local investment, competitors such as Toyota and Honda are also accelerating their expansion of production in North America.

An industry official stated, “Amid this trend, some point out that if the labor union insists solely on securing production volumes for domestic plants, it could lead to a weakening of the company’s competitiveness and damage to the medium- to long-term employment base.” The official added, “I believe the key to labor-management negotiations lies not in the debate over the transfer of production overseas itself, but in how to simultaneously secure new production volumes for domestic plants and implement measures to protect jobs in response to these inevitable changes.”