Hyundai Halts Construction at U.S. Plant After Hundreds of Workers Detained in Federal Raid

Construction at Hyundai Motor’s (005380.KS) battery plant in Georgia has been suspended after U.S. authorities detained hundreds of workers in a sweeping raid, disrupting a key project tied to the Korean automaker’s multi-billion-dollar investment in the state.

The raid, carried out on Thursday, has dealt a blow to a facility scheduled to begin operations later this year. It also highlights the growing crackdown on immigration under the Trump administration and its disruptive impact on business, even as the White House seeks to attract more foreign investment.

The arrests risk straining ties between Washington and Seoul, a key U.S. ally and major investor, as both countries continue to spar over the terms of a $350 billion investment deal. Only last month, South Korea pledged $150 billion in U.S. investments during a bilateral summit—$26 billion of which was to come from Hyundai Motor.

South Korea’s Foreign Ministry confirmed that “a number of our citizens” were among those detained and expressed concern over the impact of the enforcement action.

“It is unacceptable for U.S. law enforcement actions to unduly hinder the economic activities of our companies investing in the United States, or the interests of our citizens,” ministry spokesperson Lee Jae-woong said Friday in a statement.

A Department of Homeland Security (DHS) agent said multiple federal agencies had carried out a “judicially authorized enforcement operation as part of an active investigation into unlawful employment practices.”

Steven Schrank, special agent in charge of Homeland Security Investigations in Georgia, told U.S. television: “Arrests are being made.”

The Atlanta office of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) said in a post on X that 450 people had been detained. A South Korean government official later confirmed they were being held at an Immigration and Customs Enforcement (ICE) detention center.

According to Korea Economic Daily, citing unnamed industry sources, nearly 560 workers from Hyundai Motor and LG Energy Solution (LGES) (373220.KS) were taken into custody, including around 300 South Korean nationals.

A spokesperson for the Hyundai-GA Battery Company said construction had been halted and that the firm was cooperating fully with authorities. LGES confirmed the site—a joint venture between the Korean battery maker and Hyundai Motor—had been on track to start operations later this year.

Hyundai said production at its main electric vehicle plant in the state was unaffected. LGES added it was “working closely with the South Korean government and relevant authorities to ensure the safety of our employees and contractors, and to secure their swift release from detention.” Shares of LGES fell 2.3% on Friday.

Georgia’s Largest-Ever Investment at Stake

In 2023, Hyundai Motor Group and LGES announced a $4.3 billion joint venture to manufacture EV battery cells, with each company holding a 50% stake. The plant is intended to supply batteries for Hyundai, Kia, and Genesis electric vehicles.

The project forms part of Hyundai’s $12.6 billion investment in Georgia, which also includes its recently opened vehicle assembly plant—hailed as the largest economic development project in the state’s history.

Video footage shared on social media showed a Homeland Security Investigations officer, wearing an HSI jacket, telling construction workers in yellow safety vests: “We have a search warrant for the entire site. We need to shut down construction immediately. All work on site must stop now.”

Under former President Donald Trump, ICE—part of the DHS—received record funding and expanded powers to carry out raids, becoming a central instrument in the Republican leader’s sweeping crackdown on immigration.

While Trump has said his priority is deporting “the worst” offenders, ICE data shows arrests of non-criminal migrants have sharply increased. Human rights advocates have condemned the raids as excessive and disruptive.