Hyundai workers resume production of Kona SUV after two-day strike

The logo of Hyundai Motor is seen during the 2017 Seoul Motor Show in Goyang, South Korea, March 31, 2017. REUTERS/Kim Hong-Ji

SEOUL (Reuters) - Hyundai Motor 005380.KS workers resumed production of the Kona sport utility vehicle late on Tuesday, ending a near two-day strike over the company's decision to expand the model's output ahead of its launch in the United States.

The South Korean automaker has halted plans for now to produce the Kona on a second assembly line at one of its domestic factories. Workers worry the production plans will lead to fewer assembly line workers as a result of more automation and the outsourcing of work to parts makers.

The Kona, due to be unveiled at the Los Angeles Auto Show later on Wednesday, is a key model for Hyundai which is looking to reverse a sales slump in the United States. It is currently sold in South Korea and Europe.

A Hyundai spokeswoman said the dispute would not affect its plan to introduce the Kona in the United States in the first quarter of next year. The automaker plans to continue to discussions with the union about commencing work on a second assembly line, she added.

Hyundai Motor shares were up 2.6 percent in early afternoon trade on the news while the wider market .KS11 was flat.

The automaker has said it aims to start Kona shipments to the United States from Dec. 1, but a union spokesman said this schedule could be pushed back depending on the outcome of the discussions about how best to boost production of the model.

Hyundai has accused the union of making “irrelevant demands” such as requests for extra windows in the factory as part of the discussions.

Hyundai Motor’s global sales fell 6 percent from January to September compared with the same period a year earlier, as a lack of SUV models hit sales in the U.S. market and a diplomatic row between Seoul and Beijing hurt sales in China.

Reporting by Hyunjoo Jin; Editing by Stephen Coates and Edwina Gibbs