Hyundai Motor will build an electric vehicle production factory in South Korea by 2025, making it the carmaker's first investment in expanding its local manufacturing capacity in 29 years.

The envisioned factory will be first-ever EV-dedicated manufacturing facility here, the company said. The plan was a part of a labor-management agreement to secure jobs for its workers, according to the union.

The carmaker said it aims to break ground next year, while existing facilities that are old and outdated at domestic plants will be renovated as well. 

Hyundai Motor currently runs 10 factories worldwide in eight locations, while three of the plants are in Ulsan, Asan, South Chungcheong Proince, and Jeonju, North Jeolla Province.

The plans for the new factory comes as Hyundai in May announced a 63 trillion won ($47 billion) investment blueprint for developing Hyundai Motor, Kia and Hyundai Mobis’ domestic businesses by 2025. The location of the new facility is not decided, according to the carmaker.

Hyundai Motor’s first EV factory in Korea will play the role of a global EV production base, along with the EV factory in the US that has also targeted at a 2025 launch, the company said. Kia’s soon-to-be established Purpose Built Vehicle manufacturing facility inside AutoLand Hwaseong, its Hwaseong plant in Gyeonggi Province, is also expected to boost local EV production. 

Building an EV-dedicated factory was a major demand from the labor union, as employees feared less assembly work and unstable job security amid the automaker’s shift toward future mobility, including EVs.

Also, for the first time in 10 years, the carmaker agreed to add more jobs to the manufacturing sector, in response to the labor union’s demand to hire more workers at the Ulsan plant that has struggled with an aged workforce and a short of hands. 

According to the union, one-fourth of unionized workers, or 12,600 of them, are expected to retire between 2022 and 2026. Some 3,000 senior workers on the manufacturing line have left the company each year and it is the company’s responsibility to guarantee workers’ employment, they argued.

Currently, Hyundai Motor Group converts subcontracted workers to regular positions at manufacturing plants. 

Details on the size of the new recruitment will be discussed by November and the carmaker will start hiring in the first half of next year.

“There are both external and internal risks, but the company made a decision that can allow both labor and management to coexist, based on the future of domestic plants and job stability,” said a company official. 

Last month, about 70 percent of the Korean Metal Workers’ Union’s Hyundai Motor branch, which falls under the Korean Confederation of Trade Union, voted in support of a walkout as wage talks continued to fail. 

The carmaker’s labor union, which represents 40,958 members, has held a total of 15 rounds of negotiations since May. Major sticking points included an increase in monthly pay, incentives and a retirement age extension, among other issues.