Samsung, LG exports suffer due to strike

CIOL Bureau
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SEOUL: A strike by thousands of South Korean truck drivers hit freight flows at the country's main ports, costing $338 million in delayed shipments, affecting top exporters such as Samsung Electronics.


Some 30,000 drivers downed tools for a fifth day demanding more talks to end their dispute, while employers have threatened legal action over the strike.

The action by the drivers, who have been pressing for higher cargo fees and recognition of their union, has been labelled illegal, by authorities but there had been no attempt to stop it.

Talks to end the dispute broke down, but the drivers said they wanted more negotiations. The government vowed to take action to minimize the economic impact of the stoppage.

"We are having trouble delivering some 30 percent of home appliances from our Kwangju plant," said Yim Juk-suk, a spokesman for technology giant Samsung Electronics.

The Kwangju factory produces mainly bulky refrigerators and vacuum cleaners. Samsung also produces consumer electronics at its Suwon plant. Home appliances account for 10 percent of its total sales.


Rival LG Electronics, said it was also being hit by the strike and was working to minimize the impact.

Container cargo transport has fallen by 35 percent at the port of Pusan, which handles 80 percent of South Korea's container cargo, the government said.

South Korea's top oil refiner SK Corp said it was concerned over the strike dragging on as the port in Pusan handles about a third of its total petroleum exports.

The Korea Employers' Federation, one of the top representatives of South Korea's management, has urged a tough stand on the strike to prevent the walkout from setting a negative example.

The South Korean government has prevented truck drivers from forming unions, arguing they are self-employed. But the drivers said that since they, were hired by transport companies, they should be allowed to form a union.


In May, truck drivers ended a week- long strike that choked the movement of freight through Pusan after the government buckled to union demands.

hares in Samsung were down 0.11 percent at 445,500 won at 0118 GMT and LG shares gained 0.33 percent to 60,700. The broader market was up 0.19 percent at 756.17.

© Reuters