With Park Ju-min and Heekyong Yang
SEOUL (Reuters) – South Korean President Yoon Suk-yeol has warned that the government may step in to break a nationwide truckers’ strike, describing it as an illegal and unacceptable move to “hold hostage” the national supply chain ” during an economic crisis.
Thousands of union drivers began their second major strike demanding better pay and working conditions in less than six months on Thursday. The action is already disrupting supply chains across the world’s 10th largest economy, affecting automakers, the cement industry and steel producers.
Union officials told Reuters there was no ongoing negotiation or dialogue with the government. The country’s transport ministry said it had asked for a dialogue with the union on Thursday, but the parties have not yet agreed on a date.
Union officials estimated that about 25,000 people were joining the strike, out of about 420,000 total transportation workers in South Korea. The transport ministry said around 7,700 people were expected to join the strike on Friday in 164 locations across the country, 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 late Thursday, noting that exports were critical to overcoming economic instability and financial market volatility.
“If the denial of irresponsible behavior 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 serious transportation disruptions the government can issue an order to force transportation workers to return to their jobs. Failure to comply can be punished with up to three years in prison, or a fine of up to 30 million ($22,550).
If the government were to accept 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’s October exports fell by the most in 26 months as its trade deficit ran for a seventh month, underscoring the slowdown in the export-driven economy.
Amid the economic gloom, Yoon’s approval rating remained largely 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 gate of the container depot at the Uiwang transport hub, scores of union drivers have set up camp and are staying overnight in white tents, watching for police patrols even though the strike has so far been peaceful.
“We are going to pour everything, resources and money, and execute every strategy we have,” said Lee Young-jo, executive director of the Seoul city chapter of the Truck Drivers Solidarity Union (CTSU).
Lee said in addition to existing funds, the union will raise emergency funds among its members if the strike is extended. “We are desperate, but the government and the politicians are calculating their political gains and they are not listening to us sincerely,” he said.
Compared to the previous walkout in June which was aimed at blocking the transport of containers, cement and cars, the union planned to expand their targets and disrupt supplies of groceries and fuel, said Lee.
Union leader Lee Bong-ju said the drivers had no choice but to strike after the government stopped negotiations.
“The Yoon Suk-yeol government is threatening a harsh response without any efforts 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 import raw materials, higher logistics costs and delivery delays leading to penalties and the cessation of trade with overseas buyers.
In one case, raw materials were delivered to a chemical company under police protection after the transport vehicle blocked hit-and-run drivers from entering a factory, KITA said.
The cement industry had an estimated output loss of 19 billion won ($14.26 million) on Thursday, said the lobby group Korea Cement Association, after shipments fell to less than 10,000 tons due to the strike.
This compares to 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 building materials after the weekend.
The industry ministry said shipments in the steel sector also fell on Thursday. POSCO, the country’s largest steelmaker, declined to comment on its size.
Meanwhile, workers at Hyundai Motor’s plant in Ulsan are expected to drive about 1,000 new cars directly to customers on Friday, after delivering about 50 cars on Thursday, a separate union representative at the plant told Reuters. So far there has been no impact on car output, the official said.
Drivers recruited by Hyundai Motor’s logistics affiliate Hyundai Glovis also began delivering some Kia Corp cars by driving them directly from Kia’s Gwangju factory to customers, a Kia official told Reuters.
The official did not say how many Kia cars would be delivered directly to buyers.
($1 won = 1,332.4700)
(Reporting by Ju-min Park, Joyce Lee and Heekyong Yang; Additional reporting by Choonsik Yoo; Editing by Gerry Doyle and Kenneth Maxwell)