Hyundai Raid Sparks Fears Of Foreign Retreat From U.S. Factory Boom

The federal immigration raid of Hyundai’s under-construction battery plant outside of Savannah, Georgia — which led to the arrest of hundreds of skilled South Korean workers and shut down work at the site — could jeopardize billions of dollars in promised foreign investments. 

International companies have committed to invest more than $875B in new facilities this year alone, according to an Avison Young analysis. Many of those investments require skilled labor that the businesses might have to bring from their home countries, and those firms might pause the planned investments if they fear for their workers' well-being, international trade experts told Bisnow.

“Foreign investment is going to get challenged and stay on the sidelines until either they have more clarity as to what happens to immigration or until the president is out of office and a new president is in,” said Babak Hafezi, an international trade consultant and adjunct professor of international business at the American University.

Agents from the Department of Homeland Security and U.S. Immigration and Customs Enforcement detained 475 workers Sept. 4 at the battery component of Hyundai's $7.6B Metaplant, which is being developed in partnership with LG Energy Solution.

It was the largest workforce immigration enforcement action in U.S. history. Construction on the battery plant has been shut down and could delay its delivery for up to three months, Hyundai officials have said.

More than 300 of those handcuffed and deported were South Korean nationals employed on business visas, prompting South Korean President Lee Jae Myung to issue a warning last week that foreign companies will be “very hesitant” to continue investing in the U.S. if foreign nationals helping establish overseas factories are put at risk.

“If that's no longer allowed, establishing manufacturing facilities in the U.S. will only become more difficult ... making companies question whether it's worth doing at all,” Lee said. 

The workers, employed by LG, were detained for about a week, and the conditions in which they were held have led to a South Korean investigation into possible human rights violations.

A complicated visa process and the rules that guide them left the plant wide open for the raid, experts said, which resulted in the deportation of workers with temporary business visas whose skills are critical to the completion of the plant.

Hyundai Motor Group Metaplant America Chief Administrative Officer Brent Stubbs wrote Wednesday in an op-ed in The Atlanta Journal-Constitution that the ICE raid was an “unfortunate situation” but “doesn’t change our plans to continue expanding and localising in the United States.”

The week before agents arrived at the plant, Hyundai announced plans for $26B in new U.S. investment.

But Tibor Besedeš, a professor at the School of Economics at Georgia Tech, said that the raid may force Hyundai to reassess future investment plans in the U.S. 

“As part of its trade deal with the U.S., South Korea committed to invest $350 billion in the U.S. Much of that investment is under threat now,” Besedeš wrote in an email. “The raid will be perceived as a warning signal that will make foreign firms more cautious and may result in less investment, contrary to what the president has stated he would like to see.”

Damage Control

Several key stakeholders have attempted to minimize the significance of the raid.

On Sunday, President Donald Trump took to Truth Social and said he didn’t want to “frighten off or disincentivize investment into America by outside Countries or Companies.”

“We welcome them, we welcome their employees, and we are willing to proudly say we will learn from them, and do even better than them at their own ‘game,’ sometime into the not too distant future!” Trump wrote.

HL-GA Battery Co., the entity developing the battery plant, is “continuing to monitor the situation and preparing to resume construction once we have more clarity on visa guidelines,” Mary Beth Kennedy, a spokesperson for the company, told Bisnow in an email. 

The Metaplant is the largest economic development project in Georgia history — the state gave Hyundai more than $2B in incentives for the facility in Ellabell.

“We are still researching root causes of the ICE raid at HL-GA Battery Company,” Kennedy wrote. “We’re pleased to hear that President Trump and the federal government understand the challenges we’re facing. We support and will cooperate with the working group created between the Korean and U.S. governments to improve the visa process for Korean workers in the U.S.”

A DHS spokesperson didn't respond to Bisnow's request for comment as of press time. 

Georgia Gov. Brian Kemp downplayed the impact of the incident on Tuesday in his first comments addressing the raid, speaking during the groundbreaking ceremony for another electric vehicle plant, a $5B facility being developed by Irvine, California-based Rivian.

“I’m not going to be naïve to the fact that they didn’t pay attention to what happened last week, but I will tell you, we’ve had good conversations with companies that are here,” Kemp said, according to Atlanta News First. “We’ve had good conversations with companies that are unnamed that are looking to do business here. They understand what is going on on the ground. They also understand the visa issue. So at the end of the day, I don’t think that’s going to affect us.”

In a statement to Bisnow, Georgia Department of Economic Development Commissioner Pat Wilson said the state has “unwavering dedication” to the relationships it has formed with foreign companies, which have planned more than 100 new projects in the state combined over the past two years.

“Governor Kemp has made clear we will not allow current challenges to undo more than 40 years of relationship-building with Korea, and we remain committed to strengthening that mutually beneficial partnership,” Wilson said in a statement. 

What's At Stake

Increasing domestic manufacturing capacity has been a pillar of Trump's economic policy, just as it was for his predecessor in the White House.

Since the passage of the Inflation Reduction Act and the CHIPS and Science Act in 2022, there have been more than 500 new manufacturing facilities announced, promising more than 131,000 jobs and $387B in investment in the U.S. combined, according to a JLL report from earlier this year.

Manufacturers have a ripple effect on the wider industrial real estate market. By 2028, JLL is predicting that manufacturer demand for industrial space will increase by 354% compared to 2018, encompassing 25% of all industrial demand, up from 19% this year.

Georgia has been one of the biggest winners in the manufacturing boom, particularly in the EV and battery industries. 

Now, the state and the nation face a risk of that economic development momentum slowing. Hafezi said Trump’s immigration policies threaten his plan to use tariffs to draw manufacturing back to American shores. 

​​“You have all these antagonistic policies. There is no alignment between immigration, bringing manufacturing home and ensuring legal immigration in this country,” Hafezi said. “Ultimately, you require a holistic addressing of all those issues simultaneously. All we have is just everything living in a silo.”

Trump’s shifting tariff policies have already created uncertainty for international companies, said Abigail Hall, associate professor of economics at the University of Tampa. The Hyundai raid only makes it more likely that foreign firms reconsider U.S. investments, she said.

“When people can’t anticipate particularly well what government policies are going to look like, it makes it very difficult for people to make plans,” Hall said. “[Foreign companies] may very well wait until they get some kind of policy clarity. They might very well decide to still take things elsewhere, even if that means they're going to be paying at higher duty rates.”

Hafezi said companies were already reconsidering establishing manufacturing bases in the U.S. because of higher tariffs, with some determining that basing production overseas and paying a one-time tariff is cheaper than navigating Trump's shifting foreign policy.

Subaru announced in April that it would be more cost-effective to produce and ship vehicles from Japan to Canada than build them in its plants in the U.S.

“The level of growth of foreign direct investment in Southern states is going to diminish,” Hafezi said.

Most of the South Korean workers were on temporary business visas, which allow them to enter the U.S. while conducting a limited number of business functions, The Wall Street Journal reported. The visas allow foreign workers with particular technical skills to train U.S. workers, a critical aspect for advanced manufacturing. But those workers can't perform assembly or construction work.

“It’s counterproductive,” said Donald Boudreaux, a professor of economics at George Mason University. “Quite simply, these are not people who snuck over the border, desperate because they come from very poor countries. That's a different conversation. These are people who were perfectly legitimate workers.”

The U.S. only issues a limited number of visas a year, and the application process can be convoluted and confusing, he added. 

“You need to be a genius to figure it out and grasp in full,” Boudreaux said.

Korean companies have had high demand for temporary work visas for their employees as they try to fulfill the hundreds of billions in investments they have collectively planned in the U.S. But past administrations allowed for a looser interpretation of what was considered work under the visa program, something South Korean companies had become accustomed to, Reuters reported.

The fact that the raid ensnared so many foreign workers who had never before been rounded up in handcuffs in such large numbers — and that the government messaging in the aftermath has been unclear — creates more layers of confusion, Hall said.

“When it comes to tariffs or immigration policy, a very clear, unwavering policy is better than a flip-flopping policy,” she said. “Even if you are going to choose a very, very restrictionist or protectionist policy when it comes to tariffs or you're going to adopt a very hard stance against, say, illicit or illegal immigration, having really clearly defined policies that are stuck to is better for purposes of planning than contemporary policy uncertainty.”