South Korea’s Yoon warns of tough measures against truck strike | Business and Economics

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 their second major strike in less than six months on Thursday, seeking 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 have said that no talks or dialogues are ongoing with the government. The country’s transport ministry said on Thursday it had requested talks with the union, but the parties had not yet agreed on a date.

Union officials estimate that about 25,000 of South Korea’s 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, the government can order transport workers back to their jobs for any serious violations. Failure to comply is punishable by up to three years in prison or a fine of 30 million won ($22,550).

It is the first time in South Korea’s history that such an order has been issued if the government so chooses. Transport Minister Won Hee-ryong told reporters on Thursday that the ministry has already begun laying the groundwork for the order.

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 gloom, Yoon’s approval rating remained largely steady at 30 percent for a fifth week, according to Gallup Korea on Friday, although his focus on economic issues drew a positive response.

Truckers’ Solidarity Union (CTSU) head Lee Bong-ju said truckers had no choice but to strike after the government suspended talks.

“Yon Suk-yeol’s government is threatening a harsh response without making any effort to stop the strike,” Lee told reporters Thursday.

On the first day of the holiday, the Korea International Trade Association (KITA) reported receiving 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 said.

The cement industry suffered an estimated 19 billion won ($14.26 million) in production losses 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 cement demand of 200,000 tonnes 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 factory are expected to drive about 1,000 new cars directly to customers on Friday after handing over about 50 on Friday, a representative of a separate union at the plant told Reuters news agency. The official said that so far there has been no impact on the automatic exit.

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 official did not say how many Kia vehicles will be delivered directly to buyers.