Do you know HM Metal? It is a Korean manufacturer who is supplying auto parts to Hyundai Motor company and GM Korea company.

I got a news that this manufacturer bankrupted now. I couldn’t find an English article. Here is a Korea article dated 9th Dec. 2021 : https://www.chosun.com/economy/auto/2021/12/09/RAAQ5J3PPFENTEFTZ56CNAV4PM/

Parts maker bankruptcy, Hyundai Motor and GM Korea at risk of halting production

It was confirmed on the 8th that HM Metal, a parts company that supplies brake parts (caliper) for Hyundai Motor’s Ioniq 5 and Genesis G80, could not overcome financial difficulties and entered bankruptcy proceedings. HM Metal went bankrupt in August and applied for rehabilitation to the court, but the 1st Bankruptcy Department of the Changwon District Court in charge of the case made a decision not to be rehabilitated on the same day, saying, “The liquidation value is greater than the continuation value of the company.” As a result, major production lines such as Hyundai Motor’s Ioniq 5 and Genesis G80 were at risk of shutdown. The sharp decline in automobile production due to the corona causes business difficulties for parts companies, and this is realizing a vicious cycle that hurts the production of automakers.

HM Metal has supplied ‘Caliper’, a brake component, to Hyundai Motors and Kia through Hyundai Mobis. The company recorded 55.8 billion won in sales in 2019. However, last year, due to the direct hit of the corona virus, sales plummeted to 41.3 billion won, and the operating loss was 2.5 billion won. This year, there was also a supply shortage of semiconductors. Seo Hong-gyu, CEO of HM Metals, said, “We have been in business for nearly 30 years, but there was no way we could use our hands because the corona, semiconductor crisis, and rising raw material prices overlapped at the same time.”

The bankruptcy of parts makers can lead to production disruptions at automakers, which can inflict a series of blows on other parts makers as well. HM Metal has been supplying parts to Hyundai Motor’s EV Ioniq 5, Genesis G80, Kia EV6, and GM Korea’s Spark Damas. Only 100,000 vehicles are equipped with this company’s parts. Seung-Moon Moon, chairman of the GM Korea Partners Association, said, “As the caliper is customized by one company for each vehicle, it takes about 2-3 months for another company to replace it.” If the finished car production line is stopped, other parts makers may not be able to deliver, leading to bankruptcy.

These concerns are becoming a reality. As a result of the coverage of this paper, three auto parts companies have recently applied for rehabilitation procedures to the court one after another. The problem is that next year, when the transition to electric vehicles begins in earnest, parts makers may face greater difficulties. An automobile industry official said, “Electric vehicles will be under considerable pressure because the number of parts is reduced by 30% compared to engine vehicles.

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