Automation Can Become a Labour Risk

23 August 2026

Executive Summary

Artificial intelligence and automation are normally discussed as productivity investments.

At Hyundai Motor in South Korea, they have also become part of a major labour-relations and business-continuity issue.

Hyundai’s union staged its first full-day strike in a decade on Friday after wage negotiations stalled. Around 39,000–40,000 union members were involved, with production lines affected at Hyundai’s Ulsan, Jeonju and Asan facilities. Further partial strikes are planned for Monday and Tuesday. 

The dispute covers pay, retirement age and other employment conditions, but workers are also demanding greater job protection as Hyundai expands its use of AI and automation. Hyundai, which owns Boston Dynamics, plans to begin deploying humanoid robots at its US Georgia facility from 2028. 

Industry estimates cited by Yonhap put cumulative lost production from the industrial action at around 55,200 vehicles and more than 2.3 trillion won — approximately $1.6 billion — in lost sales by Friday. 

The wider risk lesson is important:

Technology designed to reduce operating risk can create a new people risk if workforce transition is not managed alongside it.

UK Impact

UK companies are rapidly introducing AI, robotics and automation into:

• Manufacturing.
• Warehousing.
• Logistics.
• Financial services.
• Professional services.
• Retail.
• Customer service.
• Engineering.
• Transport.

The business case normally focuses on:

• Productivity.
• Labour savings.
• Accuracy.
• Speed.
• Capacity.

But employees may interpret the same investment through a completely different lens:

job security.

That matters because poorly managed automation programmes can potentially generate:

• Industrial action.
• Employee resistance.
• Skills loss.
• Lower morale.
• Recruitment problems.
• Implementation delays.
• Reputational disputes.
• Increased union activity.

The technological project therefore becomes an operational-resilience project as well.

Global Impact

The Hyundai dispute illustrates how labour relations may increasingly become intertwined with technological change.

The union has specifically raised concerns that AI and automation could affect not only production roles but eventually research and engineering positions as well. Hyundai says it remains committed to resolving the dispute through dialogue and has acknowledged that strike action affects customers, partners and operations. 

This issue is unlikely to remain confined to South Korea.

As humanoid robotics moves towards industrial deployment, companies will increasingly face decisions about:

• Which jobs disappear.
• Which jobs change.
• Which skills remain valuable.
• How quickly automation is introduced.
• Whether workers share productivity gains.
• How retraining is funded.

Those decisions may directly influence operational continuity.

Our View

Businesses introducing major automation should add workforce transition risk to the implementation plan.

Companies should ask:

• Which jobs will materially change?
• Have employees been told early enough?
• Are unions or workforce representatives involved?
• Which employees can be retrained?
• What new technical skills will be required?
• Is knowledge concentrated among employees who may leave?
• Could automation trigger industrial action?
• Can production continue during workforce disruption?
• Are critical suppliers experiencing similar automation disputes?
• Is implementation being measured only by technical performance?
• Who owns the people-risk element of the project?

The most technically successful automation project can still fail commercially if the workforce required to implement and operate it rejects the transition.

Companies therefore need two implementation plans:

one for the technology and one for the people.

Risk Indicator: ELEVATED

Disclaimer

The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.

Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.