Hyundai’s plants in South Korea went ceased operations and went on strike on Monday, affecting the supply of cars by thousands, which could reduce Hyundai’s revenue by up to $1.3 billion (Nam). These cars were planned to be distributed globally to the U.S., Asia, and the Middle East, and includes over 50,000 workers the strike was due to a disagreement between Hyundai and the labor union because compensation increases have declined due to lacking profits (Nam). According to Nam, this year’s strikes at Hyundai could be especially damaging because the company’s profits have declined for the last 10 quarters, and the U.S. might face shortages of some of the more popular models because we are Hyundai’s second-largest market behind China.
Monday, September 26, 2016
Hyundai Workers on Strike!
Wall Street Journal Summary of:
“Hyundai Workers on Strike for First
Time in 12 Years”
by In-Soo Nam September 26, 2016 8:06 a.m. ET
No changes made
From a global marketing perspective, this depicts how economic struggle in an international company affects other major markets. Labor strikes seem to be more common in South Korea than the U.S. Hyundai is an extremely large company that is facing a gradual loss in revenue, and that will certainly affect both foreign and domestic consumers and producers. It will be interesting to see how Hyundai’s marketing efforts change; either reducing them to lower their budget or increasing them to increase lagging sales. Conventional wisdom tells us that they need to step up their game and focus on their market strengths (economies of scale, quality, and price) and get this message out to consumers. Their business model has changed over the years as they now offer several models over $30,000. They have followed a similar path of Honda, which entered the U.S. market at a low price point and emphasized quality, but has become much more expensive of a brand. Hyundai is not yet as reputable as Honda for quality, but the prices are very close; I believe they need to target their market more precisely and decide exactly where and how they want to compete. Maybe then they can pay their workers an acceptable wage and avoid strikes.