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

Hyundai Glovis

25/11/2022 01:25

* 
      No dialogue, talks between gov't, union as of now - union
    

        * 
      Cement industry sees $14 mln lost on first day of dispute
    

        * 
      Steel output down, construction sites running short of
materials
    

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      Hyundai, Kia cars being driven directly to customers -
officials
    

  
 (Adds details on South Korea economy, President Yoon's approval
rating, car deliveries)
    By Joyce Lee and Heekyong Yang
       SEOUL, Nov 25 (Reuters) - South Korean President Yoon
Suk-yeol warned the government might 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 an economic crisis. 
    Thousands of unionised truckers kicked off their second
major strike seeking 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 said there were no negotiations or dialogue
ongoing with the government. The country's transport ministry
said it requested dialogue with the union on Thursday, but the
parties have yet to agree on a date. 
        Union officials estimated about 25,000 people were
joining the strike, out of about 420,000 total transport workers
in South Korea. The transport ministry said about 7,700 people
were expected to rally for the strike on Friday in 164 locations
nationwide, down from 9,600 people 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 on Thursday, noting that exports were key
to overcoming 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 work start order." 
    According to South Korean law, during a serious disruption
to transportation the government may issue an order to force
transport workers back to their jobs. Failure to comply is
punishable by up to three years of jail, or a fine of up to 30
million won ($22,550). 
    Were the government to take this option, it would be the
first time in South Korean history such a order is issued.
Transport Minister Won Hee-ryong told reporters on Thursday that
the ministry has already begun groundwork for issuing the order.
    The strike comes after South Korea saw October exports fall
the most in 26 months as its trade deficit persisted for a
seventh month, underlining the slowdown in its export-driven
economy.
    Amid the economic gloom, Yoon's approval rating remained
mostly flat for the fifth week at 30%, according to Gallup Korea
on Friday, although his focus on economic affairs received a
positive response. 
        'HARD-LINE RESPONSE'
    The head of the Cargo Truckers Solidarity Union (CTSU), Lee
Bong-ju, said the truckers had no choice but to strike after the
government stalled negotiations. 
    "The Yoon Suk-yeol government is threatening a hard-line
response without any efforts to stop the strike," Lee told
reporters on Thursday.
    On the first day of the strike, the Korea International
Trade Association (KITA) said it received 19 reports of cases of
disrupted logistics. These included inability to bring in raw
materials, higher logistics costs and delivery delays leading to
penalties and trade with overseas buyers being scrapped. 
        In one instance, 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 sustained an output loss of an
estimated 19 billion won ($14.26 million) on Thursday, lobby
group Korea Cement Association said, after shipments slumped 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 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 the steel sector also saw
shipments drop on Thursday. POSCO  005490.KS , the country's
largest steelmaker, declined to comment on the extent. 
    Meanwhile, workers at Hyundai Motor's  005380.KS  Ulsan
factory are expected to drive about 1,000 new cars to customers
directly 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 auto output, the official
said.
        Drivers recruited by Hyundai Motor's logistics affiliate
Hyundai Glovis  086280.KS  also began delivering some Kia Corp
 000270.KS  cars by driving them directly from Kia's Gwangju
plant to customers, a Kia official told Reuters.
    The official didn't say 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)
 ((joyce.lee@tr.com;))