Hyundai Motor's US Battery Plant Construction Delayed by Several Months After Trump Administration Raid

Last week, after illegal immigration-related raids by the Trump administration, South Korean automotive giant Hyundai confirmed that construction at its battery plant in the U.S. has been delayed by several months.

On Thursday, Eastern Time, Hyundai Motor CEO José Muñoz stated that after a raid by U.S. immigration enforcement authorities, the construction of Hyundai's joint venture battery plant in Georgia, USA, will be delayed by at least two to three months. This delay highlights the direct impact of the Trump administration's large-scale immigration enforcement actions on South Korean companies' investment projects in the United States.

According to CCTV News, on Thursday the 4th local time, the U.S. Immigration and Customs Enforcement and other agencies conducted a raid at the construction site of the joint battery factory of Hyundai Motor and LG Energy Solution in Bryan County, Georgia, USA.

The raid was the largest single-site law enforcement action in the history of the U.S. Department of Homeland Security's Investigations. Federal law enforcement officials arrested 475 workers, most of whom were Korean nationals. This operation has led to serious labor shortages for Korean companies such as Hyundai.

U.S. Commerce Secretary Lutnick said on Thursday that Trump plans to provide short-term visas for foreign skilled workers needed to build new factories. Lutnick said, "I believe he (Trump) will reach agreements with different countries, and when they want to carry out large-scale construction here, he will find a way to provide appropriate work visas for their workers."

Earlier this week, Trump issued a warning to multinational corporations on social media, stating that while investment is welcome, they must comply with U.S. immigration laws. He also promised to provide legal pathways to the United States for "talented and exceptionally skilled individuals."

Modern CEO says still committed to the U.S. market.

Muñoz explained the reason for the delay in an interview on Thursday: "This will cause us at least a two to three month delay because now all these people want to come back. Then you need to see how to fill these positions. And to a large extent, these people are not in the United States."

Muñoz stated that Hyundai Motor remains committed to the U.S. market. He said, "This is a very unfortunate incident, but the strategic importance of the U.S. market to our company will not change. We have been making significant investments in recent years and will continue to do so."

Due to the delay in the construction of the new factory, Hyundai will continue to source batteries from the SK On plant located in Commerce, Georgia. LG Energy Solution stated, "We are committed to our projects in the United States and will continue to address the current situation, with the goal of maintaining necessary investments and business operations."

It is reported that the charter flight for repatriating workers took off from the United States on Thursday and is expected to arrive in South Korea on Friday. The economic impact of this raid may have only just begun to emerge.

Large-scale law enforcement raids shake the industry

On September 4, U.S. Immigration and Customs Enforcement, along with other agencies, conducted a raid at the construction site of the Hyundai and LG Energy Solution battery joint venture plant located in Bryan County, Georgia. Steven Schrank, the head of the Homeland Security Investigations in Atlanta, emphasized that this was the largest single-site enforcement action in the agency's history.

Image source: Energy Storage World

Relevant law enforcement footage shows South Korean workers in yellow vests being handcuffed at the ankles, wrists, and waist during the raid, with helicopters and armored vehicles deployed at the scene. The arrested individuals are suspected of illegal border crossing, entering through visa-free programs that prohibit employment, or overstaying their visas.

The South Korean government expressed "concern and regret" over this action. Foreign Ministry spokesman Lee Jae-yong stated that the economic activities of companies investing in the U.S. and the rights of South Korean citizens should not be unjustly infringed upon during U.S. law enforcement processes.

The multi-billion dollar investment plan is impacted.

This incident has put South Korea's hundreds of billions of dollars in investment commitments in the United States to the test. Hyundai Motor recently pledged to increase its investment in the U.S. to 26 billion dollars, up 5 billion dollars from the previous 21 billion dollars. This investment plan includes 9 billion dollars to increase automotive production capacity in the United States and 12 billion dollars for other projects.

The Hyundai plant located in the town of Ellabell is the largest manufacturing project in Georgia's history, with a total investment of $7.6 billion. It plans to employ 8,500 people by 2031. The state has provided Hyundai with a $2 billion incentive package.

Hyundai Motor Group Chairman Chung Eui-sun expressed at an event on Thursday, "I am really concerned about that incident, and we are very glad that they were able to return home safely. Our government and the U.S. government are working closely together, and the visa regulations are very complicated. I hope we can work together to build a better system."

Visa Challenges Become Investment Barriers

According to a report quoted by Wall Street Insights this week, several executives and industry organization personnel in Seoul admitted that in order to advance multi-billion-dollar advanced manufacturing projects in the United States, Korean companies commonly used inappropriate visas for dispatching employees. Since short-term work visas require several weeks, some Korean companies have sent employees to the U.S. using B-1 business visas or the ESTA visa waiver program.

Although South Korea and the United States signed a free trade agreement in 2012, unlike other trade partners with whom the United States has reached free trade agreements, South Korea has not obtained a targeted work visa program. According to the aforementioned report, a South Korean official stated that South Korea has raised this issue multiple times over the past two decades, but successive U.S. administrations have rejected it.

Chang Sang-sik, head of research at the Korea International Trade Association, pointed out: "The U.S. government is two-faced. It asks South Korea to invest more in the United States, yet treats Korean workers as criminals, even though it is well aware that these projects cannot proceed without them."