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Hope they can produce those school buses without beating them all with baseball bats.

HYUNDAI Motor Co, South Korea's biggest auto maker, said it may shift production of buses and trucks to China after its union twice rejected a proposal to add an extra shift to the company's domestic commercial vehicle plant.

Assembling vehicles in southern China's Guangzhou "could be an option" if a second shift isn't introduced in Jeonju, South Korea, the vehicle maker's commercial division president, Choi Han Young, said yesterday.

Union strikes, an annual ritual among South Korean companies, cost the Seoul-based car maker an estimated 1.6 trillion won (US$1.7 billion) in lost sales last year after production of 115,683 vehicles was disrupted. The car maker needs two shifts to meet its target of nearly tripling global commercial vehicle sales to 140,000 units by 2010.

Hyundai Motor's factory in Jeonju, south of Seoul, operates at less than half its annual capacity of 125,000 buses and trucks because of the absence of a second shift. The company's two passenger car assemblies in South Korea work double shifts.

The auto maker agreed in June 2005 to set up a venture with Guangzhou Automobile Co to produce buses and trucks in the southern Chinese city of Huadu. The venture planned to make 50,000 units in 2009 and 200,000 by 2011.

Talks on the venture, which had stalled, are back on and making good progress, Chosun Ilbo said yesterday, citing Hyundai Motor. The Guangzhou plant would be car maker's first large commercial vehicle factory abroad.

The company told the labor union at its Jeonju plant that it may move some bus production abroad after union members voted against the added shift on February 2, Hyundai spokesman Jake Jang said in an interview with Bloomberg.

Hyundai Motor said yesterday it has an order backlog for about 5,600 buses.
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