South Korea’s truckers began returning to work and factories resumed deliveries of goods from vehicles to steel after a week-long strike, yet a return to normality still faces hurdles.
Companies, including top steelmaker POSCO Holdings Inc, immediately began deliveries of goods that had been piling up at warehouses, although several petrochemical firms, including LG Chem Ltd, said that production would normalize more gradually.
While road transport is being restored, the backlog of containers at ports might take longer to clear.
Photo: AP
More significantly, despite the agreement reached late on Tuesday, the union and government officials need to resolve major issues.
A union spokesman said that it is prepared to hold another round of strikes if details of the settlement are not adopted more permanently.
The agreement came after production of South Korea’s main exports was significantly curtailed, raising concerns that a prolonged strike would force more severe shutdowns. South Korea’s economy was at risk with the South Korean Ministry of Trade, Industry and Energy estimating that key industries have seen production disruptions worth about 1.6 trillion won (US$1.2 billion).
The drivers and the South Korean Ministry of Land, Infrastructure and Transport agreed to extend a freight rate system guaranteeing minimum wages. The union is now pressing the government to remove the sunset provision that automatically terminates the system every three years, and also to apply it to shipments of all items, not just containers and cement.
“There’s definitely a chance for the union to resume the strike as they’ve warned, because they made a success this time,” Seoul National University economics professor Ahn Dong-hyun said. “The problem is that the [South] Korean economy is already facing a very difficult time with rising inflation and global supply-chain disruptions.”
The agreement gives confidence to other unions to stage work stoppages, he added.
Delivery workers for Korea Post announced that they would strike starting on Saturday, as they seek to negotiate on wages and employment conditions.
South Korean President Yoon Suk-yeol, who faced one of his first economic challenges with the strike, echoed similar concerns in comments early yesterday.
“It’s like we’re walking on thin ice, as we face high inflation and an economic crisis,” Yoon said.
With the return of the drivers, most companies affected by the strike started to normalize their operations. POSCO began shipping out products from yesterday afternoon with a plan to resume operations at some of its plants from today.
Hyundai Motor Co also said that production has been normalized at its Ulsan factory.
One of the hardest-hit sectors by the strike was petrochemicals. LG Chem Ltd, Hanwha Totalenergies Petrochemical Co, Lotte Chemical Corp and Kumho Petrochemical Co all said they expect production and shipments to normalize gradually.
Ahn said conglomerates might adopt lessons from the past week’s event in case of further stoppages.
“The big companies are not foolish,” he said. “They might hire truckers on their own if this kind of strike resumes, or employ other shipping companies whose truckers are not union members.”
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