Hyundai has been investing in the American South for the past two decades.
The company recently committed to investing an additional $26 billion in the US.
It is now scrambling to contain the fallout from an ICE raid on its largest US project to date.
An immigration raid on a sprawling Hyundai factory in rural Georgia on Thursday has had far-reaching consequences.
One US official described the operation as the “largest single-site enforcement operation” in history, and it detained nearly 500 workers, the majority of whom were South Korean.
It also jolted a company that has invested billions of dollars in the American South, helping to transform the region into a major global auto manufacturing hub. For South Korea, the raid targeted a national champion who has played a long-standing role in strengthening economic ties with its Western ally.
South Korean leaders are now scrambling to contain the fallout, both domestically and in the United States.
According to Gi-Wook Shin, a sociology professor and the founder of Stanford University’s Korean Studies Program, the raid puts South Korean President Lee Jae Myung in a difficult position.
He stated that the Korean leader must strike a balance between his country’s international alliances and its own interests. Back home, Lee faces liberal supporters who, while not enthusiastic about Trump, recognize the importance of working with the United States, according to Shin.
“The Lee Government is really trying to work with the Trump administration to strengthen the alliance and really trying to accommodate Trump’s policy,” Mr. Shin said. “So that’s why what happened now is not good timing, and Mr. Lee will be in a tough position politically inside Korea.”
In recent months, South Korean officials have met with the Trump administration to discuss trade and announced significant investments in the US.
Following Lee’s August summit at the White House, South Korea announced a $150 billion investment in the United States, backed by private companies. Hyundai Motor Group alone announced a $26 billion pledge, with a portion of that going toward a new steel mill in Louisiana.
The Hyundai factory raided on Thursday in Ellabell, Georgia, about 30 miles west of Savannah, is the company’s largest manufacturing operation in the South. The facility celebrated its grand opening in late March with an event attended by Republican Gov. Brian Kemp.
With a joint investment from LG Energy Solutions, the so-called Metaplant has grown into a $7.59 billion investment that is expected to create 8,500 jobs in the state. The raid occurred while parts of the 3,000-acre campus were still under construction.
According to a spokesperson for LG Energy Solutions, approximately 250 affected workers were employed by the HL-GA Battery Company, a joint venture between Hyundai Motor Group and LG Energy Solution.
“For now, our top priority is ensuring the safety and well-being of our employees and partners, and we will commit our best efforts to ensure their safe and prompt returns,” according to a spokesperson.
When asked for comment, Hyundai Motor Group referred Business Insider to the statement it issued on Friday.
“We are reviewing our processes to ensure that all parties working on our projects maintain the same high standards of legal compliance that we demand of ourselves,” a company spokesperson said. “This includes thorough vetting of employment practices by contractors and subcontractors.”
A.J. Jacobs, an East Carolina University professor who has written two books on the Korean automotive industry, told Business Insider that Hyundai has supported nearly 30,000 direct and indirect jobs in the United States.
Hyundai completed its first major US plant in Montgomery, Alabama, in 2005. In 2009, the Korean automaker opened a new plant in West Point, Georgia, about 90 miles away, creating an additional 3,200 jobs.
According to Jacobs, both investments occurred during a period of high unemployment and industrial decline in the regions. Alabama and Georgia were not yet the major auto manufacturing hubs that they are now.
“What it’s done is it brought prestige to their governors and mayors, got them re-elected, and it’s brought some visibility to those states for international investors and foreign direct investment,” according to Jacobs. “To quantify the impact of these investments — I really couldn’t even venture to guess how many billions of dollars have been invested in Alabama and Georgia prior to the Metaplant.”
Because of its deep roots in the South, Jacobs believes there is little that would cause Hyundai to abandon its production facilities there.
“In my opinion, there’s almost nothing that would get them to stop producing vehicles in the United States and stop growing,” Mr. Jacobs said. “They broke the sales record again this month. “Every year they do.”
According to Shin, the Stanford professor, South Korea will most likely be cautious in its response, particularly if the investigation reveals that any of the detainees violated the law.
On Sunday morning, multiple Korean media outlets reported that the president’s chief of staff, Kang Hoon-Sik, had announced a deal to release more than 300 South Korean workers detained during the raid. The official stated that a charter plane will be dispatched to bring the workers home.
There have been no criminal charges announced.
According to White House spokesperson Abigail Jackson, “Trump will continue delivering on his promise to make the United States the best place in the world to do business, while also enforcing federal immigration laws.”
