South Korean automotive climate control system supplier KB AutoTech Co. is on the verge of losing customers or facing fines after it has failed to deliver orders on time due to labor strike that stopped its manufacturing lines for over 60 days. Infuriated customers, in particular, those abroad, are now threatening to cease the contract or asking to pay for damages for losses caused by the delayed delivery.

According to KB AutoTech on Tuesday, its major overseas clients including Japan-based Mitsubishi Fuso Truck and Bus Corp. and India-based Tata Motors Ltd. have sent official notices, warning that they would hold the auto parts maker responsible for the losses from the delayed orders.

Tata Motors sent an official complaint to the Korean auto parts maker asking it to take prompt actions after the postponed shipments of the automotive air-conditioning systems has impeded the production of its 600 buses that were supposed to be ready by now for the new school season in September.

Mitsubishi Fuso Truck and Bus also are demanding compensations of 750 million yen ($7.4 million) for the losses caused by the delay in orders. Separately, the Japanese automaker sent an official letter to the state-run Korea Trade-Investment Promotion Agency (KOTRA), urging it to help resolve the issue.

Middle Eastern clients including the United Arab Emirates’s Sawidan Trading Co., Qatar’s Al Hamad Automobiles Co., and Saudi Arabia’s Western Auto Co. have also threatened to change their auto part supplier to others due to the postponed shipments.

The Korean automakers Hyundai Motor Co. and Kia Motors Corp., the troubled auto parts maker’s major customers, avoided the setback in production, thanks to diversified suppliers of automotive climate control systems, but KB AutoTech’s other customers are left paralyzed from its suspended production.

KB AutoTech’s dispute between the labor and the management began after they failed to agree on wages and job security issues, and its workers have been staging a sit in the manufacturing plant since July 8.

By Chung Soon-woo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]