South Korea’s finance ministry announced Hyundai Motor Group’s plan for hiring and investing about 23 trillion won ($21.56 billion) over five years after Finance Minister Kim Dong-yeon visited the group’s lab earlier in the day. The group includes flagship Hyundai Motor Co and Kia Motors Corp.
The ministry said the investment will be in areas such as electric cars and self-driving automobiles, but analysts said the sum was not a surprise as Hyundai Motor already spends 4-5 trillion won annually as capital expenditure and has previously indicated it will invest in those areas.
A Hyundai Motor Co spokeswoman confirmed the hiring plan but did not comment on the investment sum. She said the finance ministry’s statement was discussed with the company beforehand. Neither the ministry nor Hyundai provided details on the hiring.
The hiring announcement could be politically driven and seemed unrealistic, some analysts said. Hyundai Motor Co had 68,194 employees and Kia had 34,752 as of end-September, according to the companies.
President Moon Jae-in’s administration, which is less than a year old, has stressed jobs creation and vowed to take a close look at Hyundai’s holding structure.
“It could be a gesture to the administration,” said Kim Yeon-woo, analyst at Hanyang Securities.
“Hyundai Motor is in the process of limiting overtime and other ways to cut personnel costs, I don’t think they are in the position to hire more people,” Kim said.
In August, a Seoul court ordered Kia Motors to pay about 420 billion won in unpaid wages, ruling in favor of workers in a landmark labor dispute which added to personnel costs.
Business groups representing the country’s large companies said in May they would work with the government to create jobs and boost investment after President Moon took power vowing to reform the family-run conglomerates that dominate the economy.
The country’s current antitrust chief told Reuters last year that he had been in talks with Hyundai over its web of cross shareholdings among its group affiliates that resulted in a big governance risk.