Hyundai gets cold shoulder from Trump despite charm offensive

So far that looks like a painful miscalculation.

The immigration raid last month at Hyundai’s Georgia production complex, which resulted in more than 300 white-collar Korean workers in handcuffs and shackles, was the culmination of a year in which the world’s third-biggest carmaker repeatedly tried to assuage President Trump—but has little to show for it.

Hyundai instead has become one of the most high-profile corporate examples of the pitfalls of trying to anticipate exactly how the administration will implement its often-chaotic economic and immigration policies.

For Chung, the struggle to get in Washington’s good graces is personally vexing as Korea tries to finalize a trade deal that would ease the pain of U.S. tariffs.

Euisun Chung, executive chair of Hyundai Motor Group, was educated in Silicon Valley and has tried to build deeper ties for the company in the U.S.

In recent years, Chung pushed the Korean carmaker founded by his grandfather to make deeper inroads with American consumers. Hyundai and its sister brand Kia—which had once staked their reputation on decadelong warranties and budget prices—racked up design, technology and quality awards. More than half of the firm’s operating profits today come from the U.S.

To continue that momentum, Chung followed the corporate playbook for winning over Donald Trump after his election to a second term in November 2024.

Hyundai donated $1 million to Trump’s inauguration. Weeks later, Hyundai hosted Donald Trump Jr. and his daughter at Torrey Pines for the pro-am event of a PGA tournament named after the automaker’s luxury sedan.

Ahead of looming tariffs, Hyundai in March pledged roughly $21 billion in U.S. investments that would manifest before Trump’s second term ended. The investment earned Chung and Hyundai officials a trip to the White House. Trump hailed the investment on social media as proof his tariffs “very strongly work."

But when Trump’s 25% tariff on global auto exports was announced days later, Hyundai wasn’t spared.

Undeterred, Hyundai took more steps to win favor in Washington. Hyundai said in April that production of a popular SUV would shift from a Kia factory in Mexico to an existing plant in Alabama. It pledged to source more components within the U.S.

President Trump, flanked by Speaker of the House Mike Johnson and Louisiana Gov. Jeff Landry, praised Hyundai’s Chung, far right, after the carmaker pledged more than $20 billion in U.S. investments.

Hours after South Korea’s president met Trump on Aug. 25 at the White House, with Chung in attendance again, Hyundai said it would deliver another $5 billion in American investment.

Within days, the search warrant was signed for the Sept. 4 immigration raid at Hyundai’s Georgia facility.

The arrests unfolded at Chung’s crown jewel American project, a $7.6 billion manufacturing complex dubbed the “Metaplant." Federal agents stormed a construction site for a battery plant jointly operated by Hyundai and fellow Korean firm LG Energy Solution. It was the largest such roundup at a single site in U.S. history: roughly 450 arrests, including more than 300 Koreans.

A search warrant shows the initial target of the raid was four Hispanic workers, but the effect was a global spotlight on the plant’s reliance on Korean labor.

Hyundai officials privately admit they would prefer to hire all Americans, though acknowledge that is not realistic because U.S. workers lack the requisite know-how, particularly with EV batteries.

The detained South Koreans, Seoul officials say, were largely providing advice on equipment installation and among other tasks in which Americans typically lack expertise. Most of the Korean workers had either short-term business visitor visas or entered the U.S. through a visa-waiver program.

“I have heard for many, many years that you just can’t find American workers in some of these states," said James Kim, chairman of the American Chamber of Commerce in South Korea.

South Korean workers arrive at Incheon International Airport in South Korea, after being detained in a U.S. immigration sweep.

The raid will delay the site’s construction by roughly two months.

Trump initially said “a lot of illegal aliens" worked at the Georgia site directly after the raid. But he changed his message within days, stressing that certain foreign workers were welcome in the U.S. The release of the 317 detained South Koreans was held up roughly a day, Seoul’s foreign ministry said at the time, because Trump had asked them to stay longer to train the Americans. When a charter flight back home left Sept. 11 from Atlanta, all but one chose to leave.

Kush Desai, a White House spokesman, said the U.S. has attracted major investments in various sectors by reducing regulation and enabling companies to bring in technical experts to set up facilities and train up American workers. “As President Trump has made clear, the Administration will work with any company investing in the United States," Desai said.

Hyundai is a major factor in the tariff talks between Seoul and Washington—a key barometer for the U.S.’s broader dealmaking with dozens of countries. The still-unsigned trade pact with Trump largely centers on a South Korean pledge to invest $350 billion in the U.S. In return, the Trump administration will drop tariffs on a large swath of items, including autos, from 25% to 15%.

Since the raid, Hyundai has publicly reaffirmed its commitment to $26 billion in U.S. investments, including the still-unfinished Georgia battery site, and its plans to boost American production.

That drew Hyundai a strong rebuke from the South Korean government, which thinks Hyundai risks weakening Korea’s leverage in trade negotiations with the Trump administration by being too openly enthusiastic for a swift trade resolution, according to people familiar with the matter.

South Korea’s presidential office declined to comment.

New Hyundai and Kia vehicles at the Port of Seattle in April. More than half of the carmaker’s operating profits today come from the U.S.

Hyundai, in a statement, said it recognizes the efforts of the South Korean government to support local companies’ business in the U.S. The carmaker added that next year it will celebrate four decades in the U.S., with its prior and ongoing investments there totaling more than $45 billion.

“These investment decisions are driven by Hyundai’s long-term vision," including a commitment for sustained growth and opportunity in America, the company said.

Despite the turmoil, Chung’s commitment to the U.S. has remained unchanged, according to people familiar with his thinking.

Still, they acknowledge that the current dynamic is more challenging than it appeared at the Metaplant complex’s March opening, when Chung stood on a podium with a large American flag hanging behind him. Rows of factory workers donning white hard hats cheered him on. Georgia Gov. Brian Kemp, attending with other top state officials, autographed a Hyundai EV.

“We are building the future of mobility with America. In America," Chung said.

Dunk contests and karaoke

Chung, 54 years old, took over the business from his father in 2020, becoming the third-generation leader of Hyundai Motor Group. From the start, the company had ties with the U.S.: The original land Hyundai sat upon in Seoul was bought from the American military.

Chung cuts a different figure than his father and grandfather, who are both icons in the Korean business community. He has preferred being driven around in colorful company cars—not the conventional black—and fashions himself as an outspoken technologist after earning his M.B.A. in Silicon Valley during the 1990s dot-com boom. His love for basketball prompted Kia to become a sponsor of the NBA dunk contest in 2011.

That year’s winner, Blake Griffin, leapt over a Kia Optima for the showcase moment.

Behind the scenes, Chung, who often goes by “E.S." in the West, also is known to fraternize comfortably with Hyundai staff, the company’s auto dealers and others.

John Krafcik, a former CEO of Hyundai Motor America, recalled an evening karaoke session in Seoul more than a decade ago, when Chung grabbed a mic and belted out Queen’s “Radio Ga Ga." Chung, who was vice chairman of Hyundai Motor at the time, then brought out his drum kit and played a few more songs.

“He’s never been afraid to show a real human side," Krafcik said.

Chung at a company meeting last year at the Kia plant in Gwangmyeong, South Korea.

That everyone recognizes that Chung is the ultimate boss allows Hyundai, even today, to operate in a “founder’s mode" that means the company isn’t likely to stray strategically despite short-term setbacks, said Krafcik, who left the firm in 2013.

Chung is also not averse to playing politics.

In June 2024, Kemp, the Georgia governor, visited South Korea for economic meetings. Hyundai’s Metaplant was the state’s largest-ever manufacturing investment. He found himself sightseeing on Jeju Island, a resort island famous for sweet mandarins and volcanic rock statues.

But he needed transport back to Seoul. Chung, who had accompanied Kemp with other senior company officials to Jeju Island, offered his private jet, according to people familiar with the matter.

Kemp accepted, eventually flying out on the jet while Chung and Hyundai’s top brass flew about an hour to the South Korean capital on a commercial Korean Air flight.

Just days after the U.S. election, Chung tapped the Spanish-born José Muñoz as Hyundai Motor CEO, the first non-Korean to lead the automaker. The move underscored Chung’s desire to embark on an era of “performance over passport." Muñoz, a former lieutenant to Carlos Ghosn at Nissan who had been running Hyundai’s U.S. operations, had a global profile.

The appointment also reflected the growing importance of the U.S. to Hyundai’s business.

Spanish-born José Muñoz is now Hyundai Motor CEO, becoming the first non-Korean to lead the automaker.

Now more than 1-in-10 new vehicles sold in the U.S. are Hyundai or Kia, including Ioniq EVs, Elantra sedans and Sportage SUVs. On Thursday, the company said September sales in the U.S. had increased 14% from the prior year.

But Trump’s tariffs, in effect since April, contributed to a 22% drop in net profit during its most-recent quarter from the prior year. The automaker hasn’t raised prices despite the tariffs. After a Biden-era tax credit for EVs expired, Hyundai said from this month it would slash prices or offer a cash incentive.

Part of Hyundai’s increased focus on the U.S. is due to a drop-off in business elsewhere.

In 2016, Hyundai and Kia achieved all-time sales records in China, collectively selling around 1.8 million vehicles and grabbing 7% of the country’s overall market at the time, according to estimates by Korea Investment & Securities. The following year, Chinese backlash emerged over South Korea’s installation of a U.S. missile-defense system. Photos of vandalized Hyundai and Kia cars emerged then on Chinese social media.

Hyundai and Kia currently represent less than 1% of the Chinese market.

Hyundai and Kia were Russia’s most-popular auto brands in 2021. But Russia’s full-scale invasion of Ukraine the following year halted the Korean firms’ operations there due to supply-chain issues. Hyundai sold off its plant in St. Petersburg in 2023.

“The U.S. is a market that is simply too important to ever give up on," said Kim Chang-ho, a former Kia investor-relations manager, who is now an auto analyst at Korea Investment & Securities.

‘Finish the job’

Hyundai began operating at its first U.S. manufacturing plant two decades ago in Montgomery, Ala. Four years later, the company opened a Kia factory south of Atlanta.

Hyundai and Kia currently make about 40% of the vehicles sold in the U.S. locally, with the remaining bulk still made largely in South Korea. By 2030, executives want local U.S. production to account for 80% of the local sales.

The ultramodern Metaplant complex outside Savannah targeted by the immigration raid is central to those hopes. There, yellow robotic arms lurch down from the ceiling, grabbing parts, welding and attaching doors.

Inside the Hyundai Motor assembly plant near Savannah, Ga., which is central to Hyundai's goal to double American production.

Of the 317 South Korean workers detained at the EV battery construction site, more than half had entered the U.S. through the Electronic System for Travel Authorization visa-waiver program known as ESTA that allows tourism and short-term business travel, according to records released by a South Korean lawmaker. Nearly everyone else had held a B-1 business visitor visa and B-2 tourist visa.

Late last month, the U.S. clarified that South Koreans traveling on the B-1 visa and ESTA are allowed to “install, service or repair" equipment brought from overseas to build plants in the U.S., according to Seoul’s foreign ministry. Washington also agreed to soon open a special “visa desk" at the U.S. Embassy in Seoul, which will field relevant inquiries.

It was with an ESTA that Cho Young-hee, one of the South Koreans who had been detained, traveled into Georgia. He is an LG Energy equipment engineer. Despite a difficult week behind bars, Cho, who is back in Korea, said after returning home he’d like to return to Georgia to “finish the job."

“It’s the only way the factory will be set up and ready for fellow American workers to take over in the future," he said.

Write to Timothy W. Martin at Timothy.Martin@wsj.com and Jiyoung Sohn at jiyoung.sohn@wsj.com