Published 13:55 IST, February 7th 2020
World's most productive factory shuts down amid Coronavirus outbreak
Amid the unprecedented outbreak of deadly coronavirus, the world's most productive car factory, South Korea's Hyundai suspended its operations on Feb 6
Amid the unprecedented outbreak of deadly coronavirus, the world's most productive car factory, South Korea's Hyundai suspended its operations in the Ulsan complex on February 6. As the nationwide crisis intensifies with the escalating death toll of the virus, the country's industrial output is also taking a toll. The factory which reportedly makes 1.4 million vehicles annually, reportedly fell quiet on Friday due to a lack of parts.
The five-plant network is in a coastal location that facilitates imports and exports of cars globally. Owing to the interconnected nature of the global economy, the supply lines are crucial. Furthermore, the novel virus outbreak in China has also led to the South Korean government to order the border factories to shut their operations in an attempt to contain the spread. As a result, Hyundai along with its affiliate Kia, which ranks as the world's fifth-largest auto manufacturer, has run out of the wiring harnesses which connect the complex electronics of vehicles.
Can cost Hyundai $500 million loss
The suspension of work at Hyundai's factories has made at least 25,000 people forcibly leave their jobs with partial wages. According to international reports, the analysts have said that these closures can also be the first example of a phenomenon that rolled out around the world. The shutting down South Korean plant will also take a toll on the company which could be as high as $500 million.
Kia will also suspend three plants for a day on Monday while South Korean unit of French automaker Renault is also considering to suspend work at its factory in Busan next week. Certain analysts have also warned of the greater troubles that might arise if Beijing extends the Lunar New Year holiday further as the deadly coronavirus has killed 636 people with more than 31,000 infected. An economics professor at Korea's Inha University has reportedly said that the 'biggest challenge' is nobody knows how the outbreak will unfold.
Updated 13:55 IST, February 7th 2020