The 150,000 shiny new Hyundai and Kia cars expected to arrive annually through the Port of Philadelphia will not be hurt by a proposed free-trade agreement between the Obama administration and South Korea, officials said.
Since August, Hyundai and Kia vehicles have arrived, almost weekly, on ships at Packer Avenue Marine Terminal in South Philadelphia, headed for U.S. showrooms.
The revised free-trade pact should not slow down imports or manufacturing of Hyundai and Kia cars in this country, Hyundai said.
Under pressure from President Obama, South Korea renegotiated some provisions in a 2007 trade accord, and agreed to reduce tariffs and other trade restrictions on U.S. auto and beef exports, while continuing U.S. tariffs on Korean cars and trucks for another four to six years.
The trade deal would keep a 2.5 percent American tariff on Korean autos for several years, rather than lifting tariffs immediately.
The deal calls for Korea to cut its tariff on American auto imports in half, to 4 percent, and allow 75,000 U.S. cars a year that meet American safety standards, but may not satisfy Korean safety standards.
"We've sold more cars this year than ever before in our history, and all indications are we are continuing that rise," said Hyundai Motor America's Jim Trainor.
U.S. sales of Hyundai are up 23 percent - 493,426 vehicles were sold the first 11 months, through November. Kia sales are up 16.8 percent: 325,824 cars were sold through November, said Robert Burns, spokesman for Hyundai Motor Manufacturing Alabama L.L.C. The Montgomery, Ala. plant produced 300,000 Hyundai Sonata and Elantra models this year for North America.
"Hyundai and Kia understand that to stabilize their currency, to build in constant U.S. dollars is the best equation for being competitive in the U.S. market," said Michael Robinet, an analyst with IHS Automotive.
"It's going to have very little to do with the free-trade agreement, and more to do with the growth of Hyundai Kia in the market and the fact that they are going to want to localize more production just to be more competitive."
The United Automobile Workers (UAW) backed the trade agreement, saying it will increase auto exports to Korea. The United Food and Commercial Workers said the pact will boost meat exports to Korea.
Other unions, including the communications workers and the AFL-CIO, announced opposition Thursday. While the provisions give "some much needed breathing room to the auto industry," AFL-CIO president Richard Trumka said organized labor is concerned that investment and government procurement provisions in the Korea deal "will encourage off-shoring."
The pact also does "nothing" to improve U.S. and South Korean workers' rights to organize and bargain collectively, the AFL-CIO said.
The Hyundai and Kia auto finishing facility in Philadelphia has created jobs for longshoremen and Teamsters, who unload and prepare the vehicles for sale. An estimated 102 ships a year carry the cars from South Korea.