In Ulsan, South Korea: South Korean truckers went on a bigger and more aggressive strike on Friday, threatening to severely cut deliveries of raw materials for semiconductors and petrochemical products.
The strike against rising fuel prices is now in its fourth day. On Thursday, it cut production in half at Hyundai Motor Co.’s biggest factory complex and stopped shipments for a number of companies, including steel giant POSCO (NYSE: PKX).
The flow of containers through ports has also slowed a lot. A government official said that traffic at Busan port, which handles 80% of the country’s container business, was only a third of what it usually is on Friday.
At the port of Incheon, it has dropped to 20% of normal levels, and since Tuesday, all container traffic has stopped at the port of Ulsan, which is the industrial hub where most of the strike action has taken place.
The transport ministry said that about 7,500 members of the Cargo Truckers Solidarity union, or about 35% of the group, are likely to go on strike on Friday. The government thinks that about 6% of the 420,000 truck drivers in the country are part of a union.
The union has said that many more people are on strike than the government says, and that many truckers who are not in the union are also refusing to work.
South Korea is a big supplier of semiconductors, smartphones, cars, batteries, and electronics. The latest strike adds to the uncertainty that China’s strict COVID rules and Russia’s invasion of Ukraine have already caused in global supply chains.
When one of his first big economic problems came up, the new President, Yoon Suk-yeol, took what he called a “neutral” position and said the government shouldn’t get too involved.
Some people are worried about this because Yoon’s words could make it harder for the government to find a solution.
“The government should look at what the union wants.” They don’t have to take all of them, but I think it would help if they thought about giving subsidies to truckers to help them deal with rising fuel prices. “Shin Se-don, a professor of economics at Sookmyung Women’s University, said the same thing.
The union said that a meeting with the government on Friday ended without an agreement and that they would meet again on Saturday.
Hyundai Hindered
Share prices of big companies haven’t changed much because people think the companies have enough stock to get through the strike for now.
Kim Gyeong-dong, an official with the truckers’ union, said that the union ran out of money to pay for the strike on Thursday and that it was unlikely that the strike could go on for another 10 days.
Some businesses were looking to make new plans in case something went wrong.
“If the strike goes on next week, we’ll have to rethink how we handle shipments,” said an official at a major South Korean company that makes batteries for electric vehicles (EVs). The official didn’t want to be named because the subject is sensitive.
Outside of factories and ports, union members did not physically block gates. Instead, they waved down non-union truckers who were driving by and asked them to stop and join the strike. But there were police there, and they didn’t stop trucks that wanted to get through.
Truckers plan to stop sending raw materials for Ulsan-made semiconductors, which is one of the new things they will do. A senior member of the truckers’ union, Park Jeong-tae, told Reuters on Friday.
Both Samsung Electronics (OTC: SSNLF) Co and SK Hynix, which manufacture chips, declined to comment.
Park also said that union efforts had cut the number of vehicles entering a large petrochemical complex in Ulsan to one-tenth of what it would normally be, and that the union was planning to do the same thing at other petrochemical complexes across the country.
A Reuters reporter saw about 1,000 truckers protesting outside of the main Hyundai Motor building in Ulsan on Friday.
A Hyundai spokesperson said, “The truckers’ strike is causing some problems with our production, but we hope things will get back to normal as soon as possible.”
Hyundai’s plants in Ulsan make about 6,000 cars a day on average.
The truckers, who are considered independent contractors in South Korea, want their pay to go up and for an emergency measure that guarantees freight rates to be kept. During the pandemic, an emergency measure was put in place. It will end in December.
So far, about 30 union members have been arrested, according to the police.
South Korean truckers on strike are going after chips and slowing down port activity.
