South Korea president warns of crackdown as trucker strike enters second day

Written by Jumin Park and Hye Kyung Yang

SEOUL (Reuters) – South Korean President Yoon Suk-yeol has warned that the government may move to end a nationwide trucking strike, describing it as an illegal and unacceptable move to “mortgage” the national supply chain amid an economic crisis.

Thousands of union truckers staged their second major strike on Thursday to demand better wages and working conditions. The crackdown is already disrupting supply chains in the world’s 10th largest economy, affecting carmakers, the cement industry and steelmakers.

Union officials told Reuters there had been no talks or dialogues with the government. The country’s transport ministry said on Thursday it had asked for dialogue with the union, but the parties have so far failed to agree.

Union officials estimate that about 25,000 of South Korea’s 420,000 transportation workers have joined the strike. About 7,700 people are expected to strike at 164 locations across the country on Friday, down from 9,600 on Thursday, the transport ministry said.

“The people will not tolerate the logistics system being held hostage during a national crisis,” Yun said in a Facebook post late Thursday, stressing that exports are key to overcoming economic instability and financial market volatility.

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

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

If the government accepts this option, such an order will be issued for the first time in the history of South Korea.

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

Amid the economic gloom, Yoon’s approval rating stood at 30% for a fifth week, according to Gallup Korea on Friday, as his focus on economic issues received a positive response.

“HARD ANSWER”

Outside the gates of a container depot at the Uiwang interchange, dozens of union porters are camping and spending the night in white tents, the strike has been peaceful so far, but patrolled by police.

“We will pour everything, resources and money, and execute the strategies we have,” said Lee Young-jo, CEO of the Seoul Metropolitan Truckers’ Cooperation Union (CTSU).

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

Unlike previous marches in June aimed at disrupting the shipping of containers, cement and cars, the union planned to expand its targets and stop deliveries of food and fuel, Lee said.

Union leader Lee Bong Joo said truckers had no choice but to strike after the government suspended negotiations.

“The Yoon Suk-yeol government is threatening to retaliate without making any effort to end the strike,” he told reporters on Thursday.

On the first day of the strike, the Korea International Trade Association (KITA) received 19 reports of logistics disruptions. These include the inability to import raw materials, increased logistics costs and delivery delays leading to fines and suspension of trade with overseas buyers.

In one case, raw materials from a chemical company were delivered under police protection after striking porters blocked a vehicle from entering the plant, KITA reported.

The cement industry lost about 19 billion won ($14.26 million) in output on Thursday, the Korea Cement Association lobby group said, after shipments fell by more than 10,000 tons due to the strike.

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

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

Meanwhile, workers at Hyundai Motor’s Ulsan plant are expected to deliver about 1,000 new vehicles to customers on Friday, after delivering about 50 vehicles on Thursday, a representative of the individual union at the plant told Reuters. So far, the production of cars has not been affected, the official said.

Drivers hired by Hyundai Glovis, Hyundai Motor’s logistics arm, have also started driving and delivering Kia Corp vehicles directly from Kia’s Gwangju plant to customers, a Kia official told Reuters.

The official did not say how many Kia vehicles will be delivered directly to buyers.

($1 = 1,332.4700 won)

(Reporting by Joo-min Park, Joyce Lee and Hye-kyung Yang; Additional reporting by Jeonsik Yoo; Editing by Jerry Doyle and Kenneth Maxwell)

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