South Korea’s president warns of crackdown as truck drivers’ strike begins second day

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By Joyce Lee and Heekyong Yang

SEOUL (Reuters) – South Korean President Yoon Suk-yeol warned the government could step in to break a nationwide strike by truck drivers, describing it as an illegal and unacceptable move to hold the national supply chain hostage during an economic crisis.

Thousands of unionized truckers began their second major strike on Thursday to seek better pay and working conditions in less than six months. 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 were no negotiations or dialogue going on 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 that about 25,000 people participated in the strike, out of about 420,000 total transportation workers in South Korea. The Transport Ministry said around 7,700 people were expected to turn out for the strike on Friday at 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 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 range of measures, including a start-up order.”

Under South Korean law, during a severe disruption of transportation, the government can issue an order to force transportation workers back to their jobs. 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 took this option, it would be the first time in South Korea’s history that such an order is issued. Transport Minister Won Hee-ryong told reporters on Thursday that the ministry has already begun work on issuing the order.

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

Amid the economic gloom, Yoon’s approval rating remained largely flat in its fifth week at 30%, according to Gallup Korea on Friday, although his focus on economic affairs drew a positive response.

‘HARD-LINE RESPONSE’

The leader of the Cargo Truckers Solidarity Union (CTSU), Lee Bong-ju, said the truckers had no choice but to strike after the government stopped negotiations.

“The Yoon Suk-yeol government is threatening a hard-line 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 received 19 reports of cases of disrupted logistics. These included the inability to bring in raw materials, higher logistics costs and delivery delays that led to fines and trade with overseas buyers being scrapped.

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 due to the strike.

This compares with South Korea’s 200,000 tonnes of cement per day during the peak season between September and early December. Construction sites risk running out of building materials after the weekend.

The Industry Ministry said the steel sector also saw shipments fall on Thursday. POSCO, the country’s largest steel producer, declined to comment on the scope.

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 cars on Thursday, a representative of a separate union at the plant told Reuters. So far, there has been no impact on automatic output, the official said.

Drivers recruited by Hyundai Motor’s logistics affiliate Hyundai Glovis also began 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 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)

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