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

By Joyce Lee and Heekyong Yang

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

Thousands of unionized truckers began their second major strike for 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 carmakers, the cement industry and steelmakers.

Union officials said there is no negotiation or dialogue with the government. The country’s transport ministry said it had requested a dialogue with the union on Thursday, but the parties have yet to agree on a date.

Union officials estimated that about 25,000 people joined the strike, out of a total of about 420,000 transportation workers in South Korea. The transport ministry said about 7,700 people were expected to go on strike at 164 locations across the country on Friday, up 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 post late Thursday, saying exports were key to overcoming economic instability and financial market volatility.

“If the irresponsible denial of traffic continues, the Government will have no choice but to review a range of measures, including a work order.”

Under South Korean law, during a serious traffic disruption, the government can issue an order to force transport workers to return to their posts. 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 exercises this option, it would be the first time in South Korea’s history that such an order has been issued. Transport Minister Won Hee-ryong told reporters on Thursday that the ministry has already started preparatory work for issuing the order.

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

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

‘HARD-LINE ANSWER’

Cargo Truckers Solidarity Union (CTSU) chief Lee Bong-ju said truckers had no choice but to strike after the government halted negotiations.

“The Yoon Suk-yeol government is threatening a harsh response without any effort to stop the strike,” Lee told reporters on Thursday.

On the first day of the strike, the Korea International Trade Association (KITA) said it had received 19 reports of disrupted logistics. These included the inability to import raw materials, higher logistics costs and delivery delays that led to sanctions and business with overseas customers being scrapped.

In one case, raw materials for a chemical company were delivered under police protection after striking truckers blocked the entrance to the factory, KITA said.

The cement industry suffered an estimated 19 billion won ($14.26 million) in lost production on Thursday, lobby group Korea Cement Association said, after supplies fell to less than 10,000 tonnes due to the strike.

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

The Ministry of Industry said that supplies also fell in the steel sector on Thursday. POSCO, the country’s largest steelmaker, declined to comment on the scope.

Meanwhile, workers at Hyundai Motor’s Ulsan plant are expected to bring 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 plant told Reuters. So far, it has had no effect on automatic exit, the official said.

Drivers hired by Hyundai’s logistics arm Glovis have also started 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 will be delivered directly to buyers.

($1 = 1,332.4700 won)

(Reporting by Joyce Lee and Heekyong Yang; Additional reporting by Choonsik Yoo; Editing by Gerry Doyle and Kenneth Maxwell)

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