1, Hyundai Motor Group, Inc.
Currently, the Management of Hyundai Motor Group is reviewing its North American operations.In this process, it has hired your consulting firm to provide an outlook on the prospects of moving their operation from Montgomery, Alabama to another site. The company faces an uncertain future with US trade restrictions and tariffs. The CEO has tasked you with developing
the plan of action for the companyâ€™s automotive division (this includes Hyundai and KIA). The CEO needs your recommendation of possible location choices to minimize any financial damage that the company would face if the trade situation worsens in the future. Currently, approximately 30 percent of cars produced in the companyâ€™s US plants are exported to countries throughout the world except for China. The CEO wants your recommendation of possible location changes for the US operations. The company will likely not change location; however, the CEO wants to keep all options available for the near future. You will need to do your research on the several factors for this assignment; these include butare not limited to:
Relationship with the South Korean Government
Availability of raw materials
Availability of trained labor
The ability of migration for senior and mid – level employees
Proximity to markets
The ability of the pliers to also locate
Shipping costs of materials
Reliability of shipping
Transportation costs of exports
Government subsidies to locate
The CEO wants to have several options (at least 3) presented for planning purposes. While the operation will likely not move, the plan gives the company leverage in future negotiations. The report needs to address all the critical issues in the above list.
2, Explain how a countryâ€™s balances of payment directly affect the exchange rate. Explain how the balance of payments is balanced. What pays for a current account defeicit or a capital account surplus.
Explain the many reasons why companies locate outside of their home country.
Explain the relationship between interest rates and exchange rates.