South Korea’s president warns of crackdown as truckers’ strike enters day two

From Ju-min Park and Heekyong Yang

SEOUL (Reuters) – South Korean President Yoon Suk-yeol has warned the government could intervene to disrupt a nationwide truckers’ strike, describing it as an illegal and unacceptable move to take the national supply chain “hostage” during an economic crisis.

On Thursday, thousands of unionized truck drivers launched their second major strike seeking better wages and working conditions in less than six months. The action is already disrupting supply chains in the world’s tenth largest economy, affecting automakers, the cement industry and steelmakers.

Union officials told Reuters that no negotiations or talks were underway with the government. The country’s transport ministry said it requested a dialogue with the union on Thursday, but the sides have yet to agree on a date.

Union officials estimated that some 25,000 people were joining the strike, out of a total of some 420,000 transport workers in South Korea. The transport ministry said some 7,700 people were expected to demonstrate for the strike on Friday in 164 locations across the country. nationwide, down from 9,600 on Thursday.

“The public will not tolerate taking the logistics system hostage in the face of a national crisis,” Yoon said in a Facebook message on Thursday, noting that exports were key in overcoming economic instability and financial market volatility.

“If the irresponsible denial of transport continues, the government will have no choice but to review a number of measures, including a start order.”

Under South Korean law, during a major transportation disruption, the government can issue an order to force transportation workers back to work. Failure to comply is punishable by up to three years in prison or a fine of up to 30 million won ($22,550).

If the government takes this option, it will be the first time in South Korean history that such an order has been issued.

The strike comes after South Korea saw October exports fall by the most in 26 months as its trade deficit continued for a seventh month, underscoring the slowdown in its export-led economy.

Amid the economic gloom, Yoon’s approval rating was about the same for a fifth week at 30%, Gallup Korea reported on Friday, though his focus on economic affairs has received a positive response.

‘HARD ANSWER’

Outside the gate of the container depot at the Uiwang transportation hub, dozens of unionized truckers have camped and are staying overnight in white tents, watched over by patrolling police, though the strike has so far been peaceful.

“We will pour everything, resources and money, and execute every strategy we have,” said Lee Young-jo, general manager of the Seoul Metro Branch of the Cargo Truckers Solidarity Union (CTSU).

Lee said that in addition to existing funds, the union will raise emergency funds among its members if the strike is prolonged. “We are desperate but the government and politicians are calculating their political gains and are not listening to us sincerely,” he said she.

Unlike the previous strike in June, which focused on blocking the transport of containers, cement and cars, the union planned to expand its scope and cut off supplies of food and fuel, Lee said.

The union’s head, Lee Bong-ju, said the truck drivers had no choice but to go on strike after the government stalled negotiations.

“Yoon Suk-yeol’s government is threatening a tough response with no effort to stop the strike,” he told reporters on Thursday.

On the first day of the strike, the Korea International Trade Association (KITA) received 19 reports of cases of disrupted logistics. These included the inability to bring raw materials, higher logistics costs and delivery delays leading to penalties and the disruption of trade with overseas buyers.

In one case, raw materials for a chemical company were delivered under police protection after the transport vehicle was blocked by striking truck drivers from entering a factory, KITA said.

The cement industry suffered an estimated output loss of 19 billion won ($14.26 million) on Thursday, the Korea Cement Association lobby group said, after shipments plummeted to less than 10,000 tons amid of the strike.

This compares with South Korea’s 200,000 tonnes of cement demand per day in the peak season between September and early December. Construction sites risk running out of building materials after the weekend.

The industry ministry said the steel sector also saw a decline in shipments on Thursday. POSCO, the country’s largest steelmaker, declined to comment on the size.

Meanwhile, workers at Hyundai Motor’s Ulsan factory are expected to drive about 1,000 new cars directly to customers on Friday, after delivering about 50 cars on Thursday, a representative of a separate factory union told Reuters. There has been no impact on auto production so far, the official said.

Drivers recruited by Hyundai Motor’s logistics subsidiary Hyundai Glovis have also begun delivering some Kia Corp cars by driving them directly from Kia’s Gwangju plant to customers, a Kia official told Reuters.

The official did not say how many Kia cars would be delivered directly to buyers.

($1 = 1,332.4700 won)

(Reporting by Ju-min Park, Joyce Lee and Heekyong Yang; Additional reporting by Choonsik Yoo; Editing by Gerry Doyle and Kenneth Maxwell)

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