U.S. visa roadblock creates speed bump for Korea’s billion-dollar investments

 

[NEWS ANALYSIS] 

A recent U.S. immigration crackdown on Korean employees in Georgia has laid bare the severe talent dilemma and unaccommodating visa system facing major Korean conglomerates as they attempt to execute multibillion-dollar investment projects there.

Despite U.S. President Donald Trump’s acknowledgment that training from foreign experts is valuable and the Korean government’s vow to fix visa issues, industry sources believe that a slowdown in factory ramp-up in the United States appears inevitable.

To meet the tight deadline for U.S. factory completion, it was customary for Korean companies to dispatch workers from headquarters on short-term visas, according to multiple industry sources and top government officials.

“The battery plant in Georgia was slated for completion in October and was undergoing trial runs, but that requires specialists to be on site,” said Deputy Prime Minister and Finance Minister Koo Yun-cheol after being asked about what impact the Immigration and Customs Enforcement raid will have on Korean companies investing in the United States.

“To do so, they need visas — and securing formal work visas has proven extremely difficult. These experts are not seeking permanent employment in the United States but only to conduct prelaunch testing in October. From their perspective, it is far from an unlawful stay. Yet whether they travel under the Electronic System for Travel Authorization [ESTA] system or other short-term permits, U.S. authorities tend to view it differently,” Koo added.

Following the shocking detention of around 300 employees at LG Energy Solution and its partner firms, the Korean government has scrambled to gather input from the industry and plans to raise the visa issue in future discussions with the United States.

Big EV project on hold

The immediate impact hits the Savannah-based EV battery joint venture between LG Energy Solution and Hyundai Motor, which has suspended construction.

A spokesperson at LG Energy Solution confirmed on September 8 that no timeline has been set for the plant to resume operations.

With an investment of $4.3 billion, the plant symbolizes the shifting supply chain of the EV industry, where Korean car manufacturers and battery cell makers intend to team up to launch a joint project to better access the U.S. market.

The raid was reminiscent of a similar case, albeit on a much smaller scale, back in September 2020. A total of thirteen Korean workers were arrested at SK Battery America’s battery plant construction site in Commerce, Georgia, on suspicion of being on visas that were either expired or incompatible with working.

Against the hostile backdrop, Korean battery makers are hunkering down amid rising uncertainty, as the issue has now escalated to the level of state-to-state diplomacy.

“At the moment, it’s hard to predict how negotiations between the Korean government and the United States will play out, or what the final outcome will be,” said a source in the local battery industry. “The challenge is that it depends on the person and the circumstances. If someone suddenly needs to travel next week, it’s nearly impossible to secure a visa in just a few days. Situations like that come up often in this business. Planned trips are manageable, but if a machine breaks down and an engineer needs to be sent immediately, companies face real difficulties because visas simply cannot be issued that quickly.”

The challenge reverberates across the industry. For instance, shipbuilding is also considered a key area of cooperation, but talent acquisition remains a primary hurdle.

“Shipbuilding specialists — from welding and cutting to painting — accumulate decades of training,” said a source with knowledge of Korean shipbuilders’ projects in the United States.

“Hanwha Ocean is hiring thousands of local talent for its Philly Shipyard in Philadelphia, but many of them are not as responsible as Korean workers — some of them even use drugs — which hinders fast, sophisticated work force training.”

Visa system at odds with reality

Korea-U.S. cooperation in the manufacturing sector is expanding to an unprecedented level, especially under the Trump administration, but the rigid bureaucratic visa system remains misaligned with on-the-ground realities.

Korean workers have faced troubles in obtaining professional work visas such as the H-1B and intracompany transfer visas like L-1 and E-2. Due to long processing times and conditions designed to favor low-cost laborers from countries like India, however, the use of ESTA or B1 visas had become a common workaround.

Industry groups have long called for a dedicated work visa quota for Korean professionals, but the requests have largely gone unanswered.

“We ask for your attention and support in resolving structural issues, including securing a dedicated visa quota, to prevent a recurrence and to ensure the safety of our people and the smooth operation of Korean businesses in the United States,” SK Group Chairman Chey Tae-won, who doubles as the head of Korea Chamber of Commerce and Industry, told senior Democratic Party members including party leader Jung Chung-rae on September 8.

On top of the visible hurdles, there are hidden obstacles quietly at play.

“I have heard that there’s a quota on how many visas a company can obtain, and compared to the scale of the massive investments being made and the construction of new factories, it seems rather insufficient,” said another source in the local battery industry.

Korea-dedicated or ‘fast track’?

With the government now entering talks on visas, the industry is trying to map out how the visa system could evolve.

The Korea International Trade Association (KITA) and Korean firms have proposed creating 15,000 E-4 visas annually, similar to quotas already in place for other countries. Australia has 10,500, Singapore 5,400 and Chile 1,400. Those countries managed to reserve the spot thanks to the early signing of FTAs.

Instead of establishing a dedicated quota, creating a new work force track tied to companies with big U.S. investments is more viable, according to Jang Sang-sik, the head of international trade studies at KITA.

“The idea of a Korea-specific E-4 visa, which was discussed during the Korea-U.S. FTA, has failed repeatedly in Congress and remains unlikely. A more realistic path is for the United States to grant short-term business visas to Korean personnel tied to confirmed investments, on the condition that companies present plans to gradually replace them with U.S. workers,” Jang said.

But major Congressional gridlock is likely, as a bill aimed at expanding visa quotas for skilled Korean workers repeatedly failed to find its way to the floor. The “Partner with Korea Act,” which was introduced by Rep. Young Kim, a Republican of California, in July, proposed creating a special E-4 visa category specifically for Korean professionals, but was referred back to committee.

BY LEE JAE-LIM, PARK EUN-JEE [lee.jaelim@joongang.co.kr]