Salem Radio Network News Wednesday, July 6, 2022

Business

S. Korea’s truckers’ strike hits output at Hyundai’s biggest auto plants

By Byungwook Kim and Heekyong Yang

SEOUL/ULSAN (Reuters) – Production at Hyundai Motor Co’s biggest factory complex halved on Thursday due to component shortages triggered by South Korea’s truckers’ strike, a union official at the automaker said on Friday.

About 8,100 members, or more than 36% of the Cargo Truckers Solidarity union in the country, went on strike for a third day on Thursday to protest the surge in fuel costs, disrupting production, slowing activity at ports and posing new risks to a strained global supply chain.

On Friday, around 1,000 truckers began a strike in front of Hyundai’s factory in Ulsan, south of the country, according to a Reuters witness.

The automaker’s Ulsan plants, which had been running at almost full capacity before the strike began this week, operated at about 50-60% of capacity on Thursday, the union official said.

South Korea is a major supplier of semiconductors, smartphones, autos, battery and electronics goods and the latest industrial action further raises uncertainty over global supply chains already disrupted by China’s strict COVID restrictions and Russia’s invasion of Ukraine.

Hyundai said there was disruption caused by the strike but declined to provide details of the impact.

“There are some disruptions in our production due to the truckers strike, and we hope production would be normalised as soon as possible,” a Hyundai Motor’s spokesperson told Reuters on Friday.

Hyundai makes about 6,000 units of 17 kinds of vehicles a day, including the Genesis SUV and Ioniq 5 at its plants in Ulsan, about 410 kilometres (255 miles) southeast of capital Seoul.

“Workers at Hyundai Motor’s Ulsan factories normally work for two hours and have a 10-minutes break, but with current component procurement issues, factory workers were working only sporadically,” said a Hyundai Motor’s union official. “Some assembly line workers yesterday were working for some 30 minutes and had to take a break for hours.”

Shares of Hyundai Motor were 0.5%, versus the benchmark KOSPI’s 1.4% fall as of 0044 GMT.

South Korean President Yoon Suk-yeol, in power for just a month, said on Friday labour conflicts should be handled by law and principle.

He told reporters the government should be neutral on the matter and that it was not appropriate for authorities to get too involved in labour conflicts.[S6N2WI00P]

The truckers, regarded as self-employed contractors in South Korea, are seeking pay increases and a pledge that an emergency measure guaranteeing freight rates would be extended. The emergency measure was introduced during the pandemic and is due to expire in December.

The drivers also want freight rates to apply to a wider range of trucks, not just container trucks and cement trucks.

Kim Gyeong-dong, a trucker union official, said the union ran out of funds on Thursday and that the strike would not be able to last more than 10 more days from Friday.

(Reporting by Byungook Kim and Heekyong Yang; Editing by Muralikumar Anantharaman and Sam Holmes)

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