US immigration raid at Hyundai sparks crisis for Korean companies
What's the story
South Korea's top conglomerates are scrambling to deal with the fallout of a major US immigration raid at a Hyundai Motor Co.-LG Energy Solution Ltd. battery joint venture in Georgia. The operation could disrupt the electric vehicle (EV) supply chain and jeopardize billions of dollars in planned investments. LG Energy Solution has reportedly decided to delay the launch of its EV battery plant with Hyundai in Georgia, according to Korea Economic Daily.
Delay details
Production delay at Georgia plant
The initial plan was to begin production later this year, with an annual battery output of 30GWh. However, that has now been pushed to the first half of next year. This delay could affect production schedules for Hyundai and its affiliate Kia Corp. An LG Energy spokesperson said they had already postponed the start of production due to market conditions, and it's too early to tell if last week's events will impact operations at the plant.
Cautionary measures
Caution among South Korean companies
Even before the raid, some companies were becoming cautious. In May, Samsung Electronics Co. issued internal guidelines on US business travel under the short-term ESTA visa. The company told employees that trips shouldn't exceed two weeks. Despite these developments, investor reaction has been muted, with LG Energy and Hyundai Motor shares only slightly lagging the broader market due to potential delays at LG Energy being well-flagged in advance.
Diplomatic impact
Diplomatic implications of the raid
The recent raid has become a major diplomatic flashpoint, coming just two weeks after President Lee Jae Myung's meeting with US counterpart Donald Trump. The leaders had showcased their alliance and solidified a new trade pact to support South Korean firms expanding in the US. However, this high-profile operation could deter South Korean businesses' private expansion plans despite their recent promise of $150 billion in direct US investment to strengthen trade ties between the nations.
Presidential reaction
Trump's response and its significance
In response to the raid, Trump urged businesses to respect US immigration laws. He said, "We encourage you to LEGALLY bring your very smart people, with great technical talent, to build World Class products." The Georgia facility is critical for the US's domestic EV supply chain security efforts. However, the delay poses a new risk for automakers relying on battery deliveries to meet production targets.