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

By Ju-min Park and Heekyong Yang

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

Thousands of union truck drivers began their second major strike to seek better pay and working conditions in less than six months on Thursday. The action is already disrupting supply chains in the world’s 10th largest economy, affecting car makers, the cement industry and steel producers.

Union officials told Reuters there were no ongoing negotiations or dialogue with the government. The country’s transport ministry said it requested dialogue with the union on Thursday, but the parties have not yet agreed on a date.

Union officials estimated that about 25,000 people would join the strike, out of about 420,000 total transportation workers in South Korea. The Transport Ministry said around 7,700 people were expected to demonstrate for the strike on Friday in 164 locations across the country, up from 9,600 on Thursday.

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

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

According to South Korean law, during a serious transportation disruption, the government can issue an order to force transportation workers to their jobs. 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 were to take this option, it would be the first time in South Korea’s 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 persisted for a seventh month, underscoring the slowdown in its export-led economy.

Amid the economic gloom, Yoon’s approval rating remained mostly flat for a fifth week at 30%, according to Gallup Korea on Friday, although his focus on economic affairs received a positive response.

“HARD LINE RESPONSE”

Outside the door of the container warehouse in the Uiwang transport hub, dozens of unionized truckers have set up camp and are staying the night in white tents, guarded by patrolling police although the strike has been peaceful so far.

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

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Lee said apart from existing funds, the union will collect emergency funds from 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.

As opposed to the previous strike in June which was focused on disrupting the transport of containers, cement and cars, the union planned to expand its targets and disrupt the supply of food and fuel, Lee said.

Union leader Lee Bong-ju said truckers had no choice but to strike after the government blocked negotiations.

“The Yoon Suk-yeol government is threatening a tough response without any 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 case reports of disrupted logistics. These include inability to carry raw materials, higher logistics costs and delivery delays leading to penalties and trade with overseas buyers being discarded.

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

The cement industry sustained an estimated output loss of 19 billion won ($14.26 million) on Thursday, the lobby group Korea Cement Association said, after shipments fell to less than 10,000 tonnes for because of the strike.

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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 are at risk of running out of construction materials after the weekend.

The industry ministry said the steel sector also saw shipments fall on Thursday. POSCO, the country’s largest steelmaker, declined to comment on the measure.

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 union at the factory told Reuters. So far there was no impact on the auto output, said the official.

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

The official did not say how many Kia cars will 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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