Hyundai pledges to invest more than $10B in US up to 2025
SOUTH Korean carmaker Hyundai yesterday pledged it would invest an additional $5 billion in the United States by 2025 to strengthen collaboration with U.S. firms in advanced technology.
The announcement came as President Joe Biden tended to both business and security interests, as he wrapped up a three-day trip to South Korea.
The investments are for robotics, urban air mobility, autonomous driving and artificial intelligence, the group said.
Hyundai Motor Group, which houses Hyundai Motor and Kia Corp, on Friday announced plans to invest $5.5 billion in Georgia to build electric vehicle (EV) and battery facilities.
The new investment brings its planned U.S. total through 2025 to about $10 billion, above the $7.4 billion it announced last year.
The world’s third-biggest automaker by vehicles sales did not say where in the United States the additional $5 billion would be invested. At a time of high inflation and simmering dissatisfaction at home, Biden emphasized his global mission to strengthen the American economy by convincing foreign companies like Hyundai to launch new operations in the U.S.
“Thanks to Hyundai, we are being part of this transformative automobile sector and accelerating us on a road where we’re going to be handing to the United States of all-electric future,” Biden told a news conference.
“Electric vehicles are good for our climate goals, but they’re also good for jobs,” he said. “And they’re good for business.”
Standing next to him after a meeting, Hyundai Motor Group chairperson Euisun Chung said, “I am confident that this new plant in Georgia will help us become a leader in the American automobile industry with regards to building high-quality electric vehicles for our U.S. customers.”
The auto group said Wednesday it would invest 21 trillion won ($16 billion) through 2030 to expand its EV business in South Korea.
The major U.S. investment by a South Korean company was a reflection of how the countries are leveraging their longstanding military ties into a broader economic partnership.
Earlier in his trip, Biden toured a computer chip plant run by Samsung, the Korean electronics giant that plans to build a $17 billion production facility in Texas.
Biden has made greater economic cooperation with South Korea a priority, saying on Saturday that “it will bring our two countries even closer together, cooperating even more closely than we already do, and help strengthen our supply chains, secure them against shocks and give our economies a competitive edge.”
The pandemic and Russia’s invasion of Ukraine in February have forced a deeper rethinking of national security and economic alliances. Coronavirus outbreaks led to shortages of computer chips, autos and other goods that the Biden administration says can ultimately be fixed by having more manufacturing domestically and with trusted allies.
Hyundai’s Georgia factory is expected to employ 8,100 workers and produce up to 300,000 vehicles annually, with plans for construction to begin early next year and production to start in 2025 near the unincorporated town of Ellabell.
But the Hyundai plant shows that there are also tradeoffs as Biden pursues his economic agenda.
Hyundai’s new EV and battery manufacturing facilities will be based in the “right-to-work” state of Georgia, meaning workers may not be required to join a union or make payments to a union as a condition of employment.
Biden has tried to link the production of electric vehicles to automakers with unionized workforces, and during his trip he called on Korean companies to hire union labor for their U.S. operations.
A Democrat, Biden has described himself as the most pro-union president in history. But the deal, announced by Georgia’s Republican governor, showed the compromises the president may have to make as he woos investment overseas.
There has been no guarantee that the Hyundai Georgia plant’s workers will be unionized.
A senior Biden administration official, who briefed reporters on the condition of anonymity, said there was no contradiction between Biden encouraging investors to embrace union workforces while his administration does “whatever it can” to encourage investment and bring jobs to the U.S.