As the fallout from the Korean government's investigation into Hyundai Motor Co. begins to impact company operations, both Hyundai and subsidiary Kia Motors have postponed construction of new manufacturing facilities in Europe and the U.S.

Kia Motors said Thursday that it was delaying its $1.2 billion Georgia facility indefinitely, and a spokesperson said the company could no longer guarantee that production at its first U.S. plant would begin as scheduled in 2009.

In a separate announcement, Hyundai Motor, which only today signed an agreement with the government of the Czech Republic to build a $1.28 billion factory, said it was delaying the start of construction for the Czech facility.

By most accounts, it would appear that the indictment of Hyundai's chairman, and the pending indictment of his son, the president of Kia, is creating the leadership vacuum feared by analysts. It will be interesting to see how long it takes both marques to get back on track.

[Source: Reuters]

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