By Ju-min Park and Heekyong Yang
SEOUL (Reuters) – South Korean President Yoon Suk-yeol has warned that the government will move to break up 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 unionized truckers began a second major strike on Thursday to demand better pay and working conditions. The move is already disrupting supply chains in the world’s 10th largest economy, affecting carmakers, the cement industry and steelmakers.
Union officials told Reuters there were no ongoing talks or dialogue with the government. The country’s transport ministry said on Thursday it had requested dialogue with the union, but the parties had yet to agree on a date.
Union officials estimate that about 25,000 of South Korea’s roughly 420,000 transport workers joined the strike. About 7,700 people are expected to rally for the strike at 164 locations across the country on Friday, the Transport Ministry said.
“The public will not tolerate holding the logistics system hostage in the face of a national crisis,” Yoon said in a Facebook message on Thursday evening, noting 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 consider a range of measures, including a start-up order.”
Under South Korean law, in the case of serious traffic violations, the government can order transport workers back to their jobs. Failure to comply is punishable by up to three years in prison or a fine of 30 million won ($22,550).
If the government were to take this option, it would be the first such order in South Korea’s history.
The strike comes after South Korea saw its exports fall by the most in 26 months as a trade deficit ran for a seventh straight month, underscoring the slowdown in South Korea’s export-led economy.
Amid the economic crisis, Yoon’s approval rating remained steady at 30% in a fifth week, according to Gallup Korea on Friday, although his focus on economic issues drew a positive response.
Dozens of union trucks have set up camp outside the gates of a container depot at the Uiwang transport hub and are spending the night in white tents, the so-far peaceful strike watched by patrolling police.
“We will pour everything, resources and money, and implement every strategy we have,” said Lee Young-jo, CEO of the Seoul metropolitan chapter of the Truckloaders’ Solidarity Union (CTSU).
In addition to existing funds, Lee said the union will raise an emergency fund among its members in case the strike is extended. “We are desperate, but the government and politicians are counting their political gains and are not listening to us sincerely.
Unlike the previous strike in June, which blocked the movement of containers, cement and cars, the union planned to expand its targets and stop deliveries of groceries and fuel.
Union leader Lee Bong-ju said the truckers had no choice but to strike after the government suspended negotiations.
“Yon Suk-yeol’s government is threatening a harsh response without making any effort to stop the strike,” he told reporters Thursday.
On the first day of the holiday, the Korea International Trade Association (KITA) received 19 reports of logistics disruptions. These include the inability to import raw materials, delivery delays leading to high logistics costs and fines, and the cancellation of trade with overseas buyers.
In one case, raw materials for a chemical company were delivered under police guard after striking trucks prevented a vehicle from entering the factory, KITA reported.
The cement industry suffered an output loss of about 19 billion won ($14.26 million) on Thursday after supplies fell below 10,000 tonnes due to a strike, the Korea Cement Association lobby group said.
This compares with South Korea’s demand of 200,000 tonnes of cement per day during the peak season between September and early December. Construction sites are in danger of running out of building materials after the weekend.
The industries ministry said the steel sector also saw a drop in supplies on Thursday. POSCO, the country’s largest steelmaker, declined to comment on the measure.
Meanwhile, workers at Hyundai Motor’s Ulsan plant are expected to drive about 1,000 new cars directly to customers on Friday after delivering about 50 on Friday, a representative of a separate union at the plant told Reuters. The official said that there has been no impact on vehicle traffic so far.
Drivers employed by Hyundai Glovis, Hyundai Motor’s logistics arm, have also started delivering some Kia Corp vehicles directly from Kia’s Gwangju plant to customers, a Kia official told Reuters.
The agency 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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