Tag: Hyundai

OM in the News: America’s Newest Auto Plant Is Full of Robots

Hyundai uses robotic dogs in assembly lines

At Hyundai Motor Group’s ultramodern new auto plant, robots perform a stunning array of tasks. They move materials, attach doors and do almost all of the welding. Dog-like robots, their snouts laden with cameras, prance across the floor to inspect partially built Ioniq electric vehicles.

The factory, which opened near Savannah, Ga., late last year, deploys 750 robots, not counting the hundreds of autonomous guided vehicles that glide across the floor. About 1,450 people work alongside them. That roughly 2-to-1 ratio of humans to robots compares with the U.S. auto-industry average of 7-to-1, writes The Wall Street Journal (Aug. 25, 2025).

The human workforce is sparse in much of Hyundai’s plant. Metal arms move slabs of steel through presses that stamp them into components of the frame. An array of robots weld those parts together without a person in sight.

Human beings are still in the driver’s seat for some jobs. But it isn’t until the frames emerge from the paint shop that people take over. Hundreds are stationed along two assembly lines where seats, dashboards and other components are added. They spot burrs that must be smoothed and bits of trim that need replacing. They snap fabric door panels into place with grommets, push electrical connectors together until they click and duck into places robots can’t reach to bolt down seats and attach shock absorbers.

The factory was designed so that robots do tasks that are dangerous, repetitive or physically demanding. People are left to troubleshoot, monitor quality and bring craftsmanship to the manufacturing process. “We’re not trying to minimize human involvement—we’re trying to maximize human potential,” said the CEO.

“But the minute humans become more expensive, more recalcitrant, the more automation you’re going to get,” said an industry expert. The auto industry today is heavily robotized, particularly in Hyundai’s home country of South Korea. The country has one of the world’s lowest birthrates, helping to drive its adoption of the machines.

A complete robot takeover is decades away. Robots still struggle to handle fabric and other limp materials, and performing the most complex jobs will take technological breakthroughs that aren’t yet on the radar.

Classroom discussion questions:

  1. Will robots ever take over 100% in auto manufacturing?
  2. What are the OM implications of the 2 to 1 ratio?

OM in Action: Hyundai Workers’ Graveyard Shift Demands

Union members, left, wearing head bands saying “Unity Fight”

Our discussion in Chapter 10 about work schedules, incentive systems, and employee motivation can certainly be enhanced by The Wall Street Journal’s article (Aug.16, 2012) called “Hyundai Strikers Demand End to the Graveyard Shift.”  With a  strike  set for today, the company’s  union demands an end to night-shift work. Hyundai now runs two 10-hour shifts at its domestic assembly plants. But union leader  Moon Yong-moon is pressing for two 8-hour shifts. Mr. Moon has brought a decade long fight to end night-shift production to a head with a series of strikes that have cut Hyundai’s output so far this year by 40,000 vehicles worth $712 million.

While major car makers including GM run plants into the night—as do all of South Korea’s auto companies—Mr. Moon argues that night-shift work is unhealthy. “Working through the night has caused chronic fatigue, sleep disorders and indigestion for workers,” he said in an interview. “In some cases, it is also to blame for family troubles.”

His proposal to replace the current 10-hour shifts with shorter, daytime-only schedules is opposed by Hyundai. Its counter proposal would include 8 and 9-hour shifts each day tied to higher worker productivity. The union wants the company to add workers to maintain output volumes and insists the company agreed in principle in 2005 to end night work and hasn’t matched its promise with any action. Alongside an end to night work, Hyundai workers want a monthly pay increase of $134 and for 30% of the company’s net profit to be used for performance-based pay.

The company and union remain far apart.

Discussion questions:

1. Make the case for each side in this conflict.

2. What are the downsides of graveyard shifts?

OM in the News: Alabama’s Incentives to Lure Hyundai–9 Years Later

It was April, 2002 when the State of Alabama announced that Hyundai would be opening a new billion dollar plant in 2005 in economically distressed Montgomery. I recall the headlines at the time about whether the $253 million in industrial incentives were sound business or public policy decisions. Indeed, in Chapter 8 we debate the merits of such incentive programs.

OK, so let’s look back with the benefit of 9 years of hindsight. The New York Times (Feb.18,2011) reports that Hyundai and its sister company, Kia (which just opened a plant nearby) have brought 1,000s of high-paying jobs to the region—and have even nurtured a little Korean culture in Montgomery. Hyundai is running its plant flat-out, with 2,650 workers staffing 3 shifts  24 hours a day. The jobs pay about $20/hour and there is so much overtime that workers make more than their unionized colleagues in plants up North.

 Kia has hired 600 workers to ramp up a second shift at its Sante Fe brand SUV plant and plans to add 1,000 more for a 3rd shift. The presence of Hyundai and Kia have kept Alabama’s unemployment rates among the lowest in the SE—this despite the closure of 12 textile mills that had formed the area’s economic base for decades. Most of those textile jobs went to mills in China and India.

More good news: rarely do a few weeks go by without another parts supplier hiring up. Alabama now lists 138 suppliers that support the Hyundai plant, directly or indirectly.(Some also do business with Honda and Mercedes near Birmingham and Toyota in Huntsville). More than 50 companies have followed Hyundai from Korea to Montgomery, bringing 3,000 Koreans to the area. Finally, near the car plant, a Hyundai subsidiary that makes electrical transformers is building a factory that will create another 1,100 jobs.

Discussion questions:

1. Evaluate the incentive program today, nine years later.

2. What are the hidden benefits of attracting a major manufacturer like Hyundai?

3. Why is the company doing so well in this economy?