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The truckers' strike in South Korea reduces output at Hyundai's largest auto facilities

Image: Reuters Berita 24 English - On Thursday, production at Hyundai Motor Co.'s largest plant complex was cut in half owing to compon...

Image: Reuters

Berita 24 English - On Thursday, production at Hyundai Motor Co.'s largest plant complex was cut in half owing to component shortages caused by the truckers' strike in South Korea, according to a union representative at the carmaker.

Approximately 8,100 members, or more than 36 percent of the Cargo Truckers Solidarity union in the country, went on strike for a third day on Thursday to protest the rise in gasoline prices, interrupting production, slowing port activity, and posing fresh hazards to an already strained global supply chain.

A Reuters witness reported that approximately 1,000 trucks began a strike in front of the Hyundai factory in Ulsan, South Korea, on Friday.

The union official stated that the automaker's Ulsan plants, which were operating at nearly full capacity before the strike began this week, were operating at approximately 50-60 percent capacity on Thursday.

South Korea is a significant provider of semiconductors, smartphones, automobiles, batteries, and electronics, and the recent industrial action has further disrupted global supply chains that have already been impacted by China's severe COVID regulations and Russia's invasion of Ukraine.

Hyundai acknowledged that the strike had created disruptions but declined to elaborate.

A Hyundai Motors representative told Reuters on Friday, "There are some difficulties in our production owing to the truckers strike, and we expect production will be normalised as soon as feasible."

Hyundai's factories in Ulsan, located approximately 410 kilometres (255 miles) southeast of the capital Seoul, produce over 6,000 vehicles every day, including the Genesis SUV and Ioniq 5.

"Workers at Hyundai Motor's Ulsan facilities generally work for two hours and have a 10-minute break; but, due to current component procurement challenges, factory workers were only working intermittently," stated a Hyundai Motor's union official. Some assembly line workers yesterday worked for roughly 30 minutes before taking an eight-hour break.

As of 00:44 GMT, Hyundai Motor shares were up 0.5% compared to the benchmark KOSPI's drop of 1.4%.

President Yoon Suk-yeol, who has just been in office for a month, stated on Friday that labour disputes should be resolved according to law and principle.

He told reporters that the government should take a neutral stance on the issue and that it is inappropriate for authorities to intervene excessively in labour disputes.

The truckers, who are considered independent contractors in South Korea, want pay raises and a promise that an emergency measure guaranteeing freight rates will be prolonged. The emergency measure, implemented during the outbreak, will expire in December.

In addition, the drivers want freight rates to apply to a greater variety of trucks, not just container trucks and cement trucks.

Kim Gyeong-dong, an official of the truckers' union, stated that the union ran out of finances on Thursday and that the strike could not continue for more than 10 days after Friday.

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