04.07.2022 Author: Konstantin Asmolov

Truckers’ Strike in South Korea and Its Consequences

TRK

The first months of Yoon Suk-yeol’s rule were marked by an impressive action of workers. Starting from June 7, the Cargo Truckers Solidarity trade union declared a general strike demanding freight rate increase and other support measures to cope with the drastic fuel prices growth.

Increasing oil prices due to the Ukrainian crisis entailed growing freight carriage costs, resulting in truckers’ revenues decreasing by over $1,590 per month. Consumer prices also surged by 5.4% as compared to the previous year; that was the sharpest increase on a year-to-year basis since August 2008.

Apart from increasing freight rates, social guarantees and other support measures, the union puts forward the demand to expand the Safe Trucking Freight Rates System (STFRS) aimed at preventing dangerous driving and at guaranteeing minimum freight rates for truckers to avoid their speeding for the sake of delivery time and over-strain at work.

However, cargo owners’ position is that the STFRS should be discontinued as it imposes a heavy financial burden on them: they either guarantee minimum salary for truckers or pay large fines.

Here, an important issue needs to be pointed out. In Korea, there are two umbrella trade union confederations that unite various union organizations. The Federation of Korean Trade Unions holds a more moderate position while the Korean Confederation of Trade Unions has a more leftist agenda and more actively fights for workers’ rights, it used to organize strikes and numerous demonstrations even against Moon, accusing him of lack of zeal. The right-wing media, on the contrary, accused Moon’s administration of passive reaction to unauthorized strikes, often accompanied by violence against managers and taking hold of companies’ headquarters.

That is why the audience was mesmerized watching how the new country leadership will behave, the more so because the law enforcement agencies of the country declared their intention to severely suppress any unlawful actions on the part of the strikers, including attempts to interfere with the work of those truckers who did not take part in the protests. The media did not take the truckers’ side either. As noted by the newspapers, “[t]he general strike is a litmus test of the new administration’s labor policy in that it is the first major strike after President Yoon Suk-yeol was inaugurated”».

However, when President Yoon Suk-yeol was asked how he would deal with the strike, he said: “Whether it’s the unjust labor actions of employers or illegal actions of laborers, I’ve made clear since the campaign that I will handle them in accordance with the law”.

On the first day of the strike, about 8,200 truckers took part therein; that paralyzed deliveries of cement all over the country and resulted in disruption of deliveries of soju, the most popular alcoholic drink in the country. Volumes of shipment to retail locations decreased by over 60%. On June 8, the second day of the strike, several clashes between the strikers and police were recorded.

On the third day, June 9, it became clear that the strike was wrought by serious problems in operations at shipbuilding, car manufacturing, construction and household appliances production sectors. There emerged the acute issue of shortage of steel, mill products and other metal industry products that could not be delivered to customers. In particular, at least 150,000 tons of steel were not timely shipped from POSCO and Hyundai Steel plants in Pohang, Gwangyang, Dangjin-si, Incheon, Suncheon-si and Ulsan. On the same day, June 9 Yoon Suk-yeol said that under no circumstances would he allow violence in the course of the continuing nationwide truckers’ strike.

On the fourth day of the strike, June 10 the volume of containers brought into and shipped out of the port of Busan dropped by over 50%, and a production line work was stopped at Hyundai plant in Ulsan due to failure to deliver the necessary spare parts and components.

In this connection, Yoon Suk-yeol stated that workers and employers should resolve the problems by themselves: if the government interfered too much in the process the parties would not be able to create the conditions for independent resolution of their contradictions.

By this day, 30 striking truckers had been remanded in custody by the police for their alleged interference with the work of non-striking trucks and on other charges.

On the fifth day of the strike, June 11, 7,350 drivers – about one third of all the union members – were taking part therein, the number of the arrested persons grew to 43.

Simultaneously, negotiations between the union representatives and the Ministry of Land Territories and Transport began. At the very beginning, the negotiations were disrupted due to objections of the ruling Force of the People party.

On June 13, President Yoon instructed his senior secretaries “to find a decision from different points of view as the losses for the industry may increase this week.” By that time, the strike had caused large-scale disruptions in the country’s logistic networks, and the main industries, including car manufacturing, steel industry and cement, had suffered the losses in production and export for the amount assessed as 1.6 trillion won ($1.24 billion) for the past seven days.

Moreover, on Monday June 13 the leading South Korean steel manufacturer, POSCO, suspended the work of all its four rolled steel manufacturing plants and its cold rolled steel manufacturing plant due to lack of space for storage of ready products. The manufactured products were stored in the nearby wasteland as the warehouses were full.

Hyundai Steel Co., the country’s second largest steel manufacturer, experienced difficulties with shipment of part of its ready products. The Korean Petrochemical Industry Association also stated that the average daily deliveries in the industry had fallen by 90% and some petrochemical companies would be possibly forced to suspend the work of their plants if the strike continued.

According to the Ministry of Industry, the strike impeded shipment of car spare parts and resulted in production losses corresponding to approximately 5,400 cars. Total, in the period from 7 to 12 June the key industries of the country suffered the overall losses of 1.5 trillion won.

On June 14, the Prime Minister of South Korea Han Duck-soo called on the truckers to end the strike. On the same day, consignors urged the striking truckers to end their protest and resume the negotiations, emphasizing that the main burden of the lengthy interruptions of shipments might be borne by smaller retail sellers.

By that time, the losses of the metal, automobile and petrochemical sectors reached at least USD 1.230 billion.

On June 14, the union decided to end the strike after reaching agreement with the government. STFRS was not cancelled, and the Ministry of Transport will provide to the National Assembly with the report on the results of its three years’ long functioning in order that the discussion could be continued. Additionally, the Ministry will carry on discussion of the plan for expanding the system so that it covers other cargo types and will consider the idea of increasing fuel subsidies taking into account the world oil prices growth. Besides, save for those arrested for violence, none of the strikers was prosecuted for the strike only, notwithstanding the fact that on May 26, 2022 the Constitutional Court had ruled in favor of the penal law that criminalizes workers who undertake illegal labor strikes, on the grounds that such strikes obstruct business.

Now, a few words about the political highlighting of the crisis. The democrats remained silent while the conservative media said that the trade unions had been given “a wrong signal” by accepting almost all their demands and putting under threat the principles of commitment to the market economy and rule of law. Now, they would allegedly continue going on strikes knowing well that they would not be punished in any way, and the 2 trillion won damage caused would never be reimbursed. They also noted that STFRS was “a form of price control that can distort autonomous market functions and runs counter to the government’s market-focused principles.”

The author can draw attention to several important issues.

First, it was a really serious mass-scale strike that inflicted a heavy blow to the economic chains and forced the authorities to accept most of the strikers’ demands, given that on the average there were 6,800 truckers on strike, or 31% of the union members (that was the number of the persons on strike as of the moment when it was ended).

It also demonstrated the fragility of the existing economic systems; just imagine how the events would have evolved if not one third but at least more than half of the union members had stopped working.

Second, while resolving this problem Yoon behaved not like a typical conservative President (who, acting in the interests of big business, would have tried to wreck the strikers’ movement) but as a representative of the democratic side. The state emphasized that the conflict must be settled within the legal framework. Those activists who impeded the movement of the trucks that had not supported the strike were arrested, but even then the leftist trade unions did not speak about excessive arbitrary actions of law enforcement agencies.

Third, notwithstanding Yoon Suk-yeol’s statements made on the first days, the conflict was settled thanks to the interference of the state, and the negotiations with the trade unions were conducted by a ministry, not by businessmen. This demonstrates the still preserved role of the state as the “director” and the fact that the President is ready to assume the responsibility.

We will later see further development of the conflict between the unions and the state.

Konstantin Asmolov, PhD in History, leading research fellow at the Center for Korean Studies of the Institute of the Far East at the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.


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