By Joyce Lee and Heekyong Yang
SEOUL (Reuters) – South Korean President Yoon Suk-yeol has warned that the government may intervene to break up a national truckers’ strike, describing it as an illegal and unacceptable move to hold the national supply chain “hostage” for an economic crisis.
Thousands of unionized truckers launched their second major strike on Thursday to demand better wages and working conditions in less than six months. The action is already disrupting supply chains in the world’s 10th largest economy, affecting automakers, the cement industry and steel producers.
Union officials said there were no ongoing negotiations or dialogue with the government. The country’s transport ministry said it requested a dialogue with the union on Thursday, but the parties have yet to agree on a date.
Union officials estimated around 25,000 people were joining the strike, out of about 420,000 total transport workers in South Korea. The Department of Transportation said about 7,700 people were expected to gather for the strike Friday in 164 locations across the country, up from 9,600 people on Thursday.
“The public will not tolerate holding the logistics system hostage in the face of a national crisis,” Yoon said in a Facebook post late Thursday, noting that exports were key to weathering 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-of-works order.”
According to South Korean law, during a severe transportation disruption, the government can issue an order requiring transportation workers to return 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 chooses this option, it would be the first time in South Korea’s history that such an order would be issued. Transport Minister Won Hee-ryong told reporters on Thursday that the ministry had already started laying the groundwork to issue the order.
The strike comes after South Korea saw its October exports fall the most in 26 months as its trade deficit persisted for a seventh month, underscoring a slowdown in its export-driven economy.
Amid the economic gloom, Yoon’s approval rating remained virtually flat for the fifth week at 30%, according to Gallup Korea on Friday, although his focus on economic affairs received a positive response.
Cargo Truckers Solidarity Union (CTSU) leader Lee Bong-ju said truckers had no choice but to strike after the government blocked negotiations.
“Yoon Suk-yeol’s government is threatening a radical 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 case reports of logistics disruption. These included the inability to bring in raw materials, higher logistics costs, and delivery delays resulting in penalties and the suppression 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 truckers from entering a factory, KITA said.
The cement industry suffered an estimated 19 billion won ($14.26 million) production loss on Thursday, lobby group Korea Cement Association said, after shipments fell to less than 10,000 tons in reason for the strike.
This compares to the 200,000 tons of cement demand per day in South Korea during the peak season between September and early December. Construction sites may run out of building materials after the weekend.
The Department of Industry said the steel sector also saw shipments fall on Thursday. POSCO, the country’s largest steelmaker, declined to comment on the scale.
Meanwhile, workers at Hyundai Motor’s Ulsan plant are expected to drive around 1,000 new cars directly to customers on Friday, after delivering around 50 cars on Thursday, a representative of a separate union told Reuters. factory. So far, there has been no impact on automatic production, the official said.
Drivers recruited by Hyundai Motor’s logistics subsidiary, Hyundai 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 specify how many Kia cars would 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)