For years, foreign automakers have been sending their employees to the US to open advanced manufacturing and battery plants in states like South Carolina, Georgia, Tennessee, and Kentucky. These plants eventually employ thousands of American workers who build vehicles for both the US market and overseas. And they pump billions of dollars into the state and federal economies, providing jobs for Americans in more rural areas.
So it didn’t raise any eyebrows when two South Korean companies, Hyundai and LG Energy Solutions, sent hundreds of their workers to Ellabell, Georgia, to oversee the construction of a $7.6 billion EV battery factory.
But then US Immigration and Customs Enforcement (ICE) came knocking. On September 4th, ICE officers raided the plant, detaining 475 people, mostly South Koreans. The workers, many of whom were here legally, were handcuffed and chained together, spurring calls from South Korea about possible human rights violations. But beyond that, it sent a chilling message to every foreign company looking to invest in the US.
“The US is now seen as very unstable,” says Arthur Wheaton, director of labor studies at the School of Industrial and Labor Relations at Cornell University. When a company like Hyundai starts a plant in the US, it sends its best and brightest employees to get it up and running. To have those employees cuffed, chained, and detained, Wheaton says, “has a cooling effect on something that has been very normal and typical, particularly in the automotive sector for decades.”
A delayed plant opening
On the raid’s heels, Hyundai announced that the battery plant’s opening would be delayed by as much as three months. But in a surprise move, the automaker also committed an additional $2.7 billion to the factory to help fund the second phase of construction. But long-term damage may have already been done.
Wheaton says that the long-reaching impacts of the delay could be profound. Hyundai works with dozens of subcontractors and suppliers who build equipment, tooling, and parts on tight margins. Those companies could be devastated by the slowdown.
To have those employees cuffed, chained, and detained, Wheaton says, “has a cooling effect on something that has been very normal and typical, particularly in the automotive sector for decades.”
“If [an automaker] gets a cold, suppliers get sent to the emergency room with pneumonia,” says Wheaton, who has studied the auto industry for years. “A small hiccup that may not hurt Hyundai can have devastating effects on the supply chain.” A supplier that planned for 10,000 units may only sell three now that the plant is delayed, for example. “They don’t have the deep pockets and resources to absorb the delay,” he adds.
While Trump has expressed measured regrets about the ICE raid, the diplomatic damage is far-reaching. South Korea arranged a charter flight to bring the detained workers home (only to have to Trump try to delay it further with overtures) and is pushing Washington to create clearer visa pathways for the skilled technicians that are required to launch these high-tech factories and train American workers.
South Korea is one of America’s most vital EV partners. Companies like Hyundai and battery makers LG and SK have committed tens of billions of dollars to US battery and EV projects that are ongoing, and many are pulling their workers out of the US on the heels of the ICE raid in Georgia.
Wheaton says that the raid also comes at a relatively shaky point for the EV transition in the US, pointing to the Republicans’ rollback of the $7,500 EV credits, dismantling environmental and emissions laws, and generally denying and actively misrepresenting climate change. The Hyundai announcement also comes at a time when other automakers like GM and Ford are walking back plans for electric vehicles.
Instability in the US
It can take anywhere from five to 10 years for automakers to design and develop new vehicle models and site, build, and open new manufacturing plants. It also takes billions in investment.
“The industry wants stability. They really want to say, give me the rules and I’ll follow them,” Wheaton says. “Having rules that change on a daily basis, because someone doesn’t like what they’re doing, is really, really frustrating.”
Between shifting executive orders, daily tariff fights, and now, ICE raids, the US is becoming increasingly less reliable for international businesses like Hyundai. Trump has a little more than three years left in his term, and his policies and actions could have a long-term consequences for all international investment in the US, according to Wheaton.
“Once Trump leaves office and you have a change in leadership, it doesn’t mean that it couldn’t happen again,” Wheaton says, noting that the investments that companies make in the US are made for decades and generations.
“That causes this pendulum to go back and forth,” he says. “Our inability to have a stable law in place has impacted foreign investment, because we’re no longer able to predict years out.”
