AutoBeta(AutoBeta.net)03/07 Report--

After the incident of "layoffs" was exposed two months ago, Beijing Hyundai has begun to solve the problems of employee compensation and the first factory. Hyundai Motor said it was considering suspending production plans at the first Hyundai plant in Beijing, one of Hyundai's earliest manufacturing plants in China, according to the latest Reuters report.

As for the shutdown of a plant, Hyundai said it was due to severe overcapacity due to a sharp drop in sales in the world's largest car market. Hyundai Motor also said in a statement that the company is evaluating production, which includes the suspension of production at the Hyundai No. 1 plant in Beijing and a non-permanent closure to enhance competitiveness and profitability.

Hyundai has not yet confirmed the exact timing of the shutdown, while South Korean media reported that the plant shutdown could be officially implemented as early as next month.

Beijing Hyundai has five vehicle production plants, with the first three in Shunyi, Beijing, and one each in Cangzhou, Hebei and Chongqing, with a total annual production capacity of 1.65 million vehicles. The shutdown of a factory in Beijing, the oldest, means that only four Hyundai plants in Beijing are still in production, reducing total capacity and production pressure.

The capacity adjustment also involves 2000 employees. It was said earlier that Beijing Hyundai had laid off staff on a large scale, which officials said was only a routine personnel adjustment. According to Hyundai's statement, about 2000 employees left voluntarily or were transferred to other factories. It is understood that the production front-line staff of the three factories in Beijing have been adjusted. In addition to the departure of employees, some employees have also been transferred to Cangzhou and Chongqing factories to support work.

According to the information we have previously obtained, employees who leave their jobs can receive severance compensation, a subsidy of NT $1 + 8000, as well as 3.5 times the year-end bonus and one month's full monthly salary compensation. Employees who choose to change jobs will receive a placement subsidy of 5000 yuan, and Beijing employees will be reimbursed for round-trip high-speed rail tickets once a month.

It is said that the shutdown of a factory also takes into account the problem of backward production capacity. The first factory was built earlier, the production efficiency is relatively low, and the maintenance cost of aging equipment is heavy. Under such circumstances, production will gradually be transferred to new factories with advanced equipment. For example, the follow-up model of the ix25, which was originally located in the first factory, has been transferred to the Chongqing plant for production in September this year.

The Beijing Hyundai brand has been occupying the market with a high performance-to-price ratio, and its annual sales exceeded 1 million in 2013-2016. With a storm in 2017, Hyundai dropped 31.3% to 785000, and only 790000 in 2018, basically the same as the same period last year. According to the capacity layout of 1.65 million vehicles, more than half of the capacity is idle. Hyundai has set a goal of restoring sales in China to 900000 vehicles in 2019, and even if sales pick up, production capacity is still far higher than market demand.

Hyundai said it will boost sales this year through the launch of a new generation of Sonata, ix25, Shengda and other models, and plans to launch three new energy models.

Nowadays, there is a downward trend in the global automobile industry, especially in China, which is the world's largest automobile production and sales market, the automobile industry has entered a cold winter, and the phenomenon of layoffs and factory closures is particularly prominent. Multinational car companies Ford and General Motors are planning large-scale layoffs and cost cuts, and many domestic car companies, including Beijing Hyundai, have to lay off staff and close factories and cut back on business to cope with the trend of the market downturn.

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