Korean companies admit cutting corners on US visas but say they have little choice

South Korean companies have routinely used unsuitable visas for workers sent to the US to build multibillion-dollar advanced manufacturing sites, according to Seoul-based executives and industry groups.

The admission comes after a dramatic raid last week by US Immigration and Customs Enforcement (ICE) at a battery plant being built by Hyundai and LG in Ellabell in Georgia, which led to the detention of 475 workers, mostly South Korean nationals.

Several people familiar with Korean conglomerates in the US said it was an “open secret” that they and their subcontractors used the B-1 visa, which allows entry to the US for business purposes but does not allow the holder to work for payment, as well as the Electronic System for Travel Authorization (ESTA) system that facilitates short-term business visits.

“The business community, the Korean government and diplomats have been well aware of this problem all along,” an executive from a leading industry group said. “We are very worried that ICE can target other Korean facilities too because they have been following the same practices and have similar problems.”

The operation last week has provoked fury in Asia’s fourth-largest economy, after ICE released a video of Korean workers in yellow vests shackled at the ankles, wrists and waist during the raid, which involved helicopters, armoured vehicles and heavily armed agents.

Plant employees wearing safety vests and helmets are escorted in a line down a hallway divided by orange traffic cones. — Workers at the electric vehicle plant in Ellabell, Georgia, are escorted from the site © Corey Bullard/U.S. Immigration and Customs Enforcement/AP

A senior South Korean official said the companies had been placed in an “impossible position”, as successive US governments pushed them to invest billions of dollars in reviving American industry while refusing to facilitate short-term working visas for projects to be completed on time.

“The US government is two-faced,” said Chang Sang-sik, head of research at the Korea International Trade Association. “It is asking Korea to invest more in the US, while treating Korean workers like criminals even when it is well aware that they are needed for these projects to happen.”

While South Korea has a free trade agreement with the US dating back to 2012, it does not have a country-specific scheme for working visas, unlike several other FTA countries such as Singapore, Canada and Australia.

The South Korean official said Seoul had repeatedly raised the issue over the past two decades, but that these efforts had been rebuffed by successive US administrations, in part because the introduction of such a scheme would have to be endorsed by Congress.

The issue grew in salience during the presidency of Joe Biden, when South Korean companies attracted by generous federal subsidies from the administration’s flagship Inflation Reduction Act, as well as additional state and county-level inducements, pledged tens of billions of dollars to build factories producing chips, batteries and electric vehicles.

Jonathan Cleave, managing director for Korea at Intralink, a consultancy that supports foreign investment projects in the US, said that Korean companies had repeatedly raised the visa issue with the Biden administration, but that they had been told simply: “Hire American.”

However, he added that in practice the American authorities, “and Georgia in particular”, had “turned a blind eye” to workers being brought in from Korea with questionable documentation, often for short-term “bursts” of construction activity, as part of an understanding that the practice was necessary for projects to be completed on time.

An executive from one of the companies involved in building the raided battery plant in Ellabell said: “We need to send our workers to install new equipment and supervise the project. We can hire US workers once the plant is built, but if the US wants us to hire American workers, our plant should be allowed to be built quickly.”

Trump wrote in a social media post on Sunday that he encouraged foreign companies investing in the US to “LEGALLY bring your very smart people, with great technical talent, to build World Class products”.

“But we do have to work something out where we bring in experts so that our people can be trained so that they can do it themselves,” he added.

James Kim, chair of the American Chamber of Commerce in Korea, said there had been “misguided actors that have not given the US legal system the respect it deserves”.

He added that he hoped the two countries would work out an understanding whereby Korean workers needed to complete the construction of manufacturing facilities could be brought in, but that “this would need to be seen as temporary”.

However, Chang from the Korea International Trade Association said that “training US workers won’t solve the problem” because Korean companies would still be wary of sharing sensitive technologies with their American workforce. “In the case of chip plants, Korean technicians need to review the adoption of new technologies, repair facilities and make sure that their high-tech facilities are run stably.”

Cleave from the Intralink consultancy said the most pressing issue for Korean companies building plants in the US was not access to highly skilled engineers, but finding construction workers in booming areas where labour can easily be tempted elsewhere.

“They need to build a factory very, very quickly, and it’s very difficult to do that with extreme labour shortages in the US where people are willing to jump ship every time someone opens another factory down the road,” he said. “The Koreans don’t need a workforce that’s loyal to the grave, but they want people who will come in and finish a project.”