This paper aims to explain how Hyundai Motor Company has successfully transferred its production system to the United States. When a production system is transferred to another country, it is modified under the influence of different institutional en...
This paper aims to explain how Hyundai Motor Company has successfully transferred its production system to the United States. When a production system is transferred to another country, it is modified under the influence of different institutional environments. The clue to the success of Hyundai Motor Manufacturing America, HMC’s transplant in Montgomery, Alabama, is found in Hyundai’s relatively low dependence on human factor of production system in comparison to its Japanese counterparts. While Japanese automakers had difficulty with hiring high-skilled workers in their American tranplants, Hyundai did not face such a problem because its production system did not require high-skilled workers. Alabama’s favorable industrial relations in the absence of labor union enabled HMMA to more efficiently utilize its workers than its mother plant in Korea, which has suffered from adversarial labor relations. However, the sustainability of HMMA’s early success may significantly depend on how well it can manage employee relations by accepting the collective voices of local workers adequately.