[THE INVESTOR] Strikes by railway workers, Hyundai Motor and in the financial industry are taking a further toll on the nation‘s economy which is already suffering from continued low growth in the wake of weak consumption and exports.

As the strikes continue for several days, damage is beginning to snowball due to the partial paralysis of car production and logistics networks, industry watchers said Thursday.




Financial damages from the strikes by unionized workers of Hyundai Motor, the country’s biggest carmaker, have already set a record high. A production loss caused by 22 rounds of strikes this year reached 121,167 cars, worth more than 2.7 trillion won ($2.46 billion), according to the company on Thursday. This compares with the previous record in 2012, when 12 strikes caused 1.7 trillion won worth of financial damage.

Damages from the strike are expected to soar as the management and the labor union failed to reach an agreement on Thursday. The walkout is expected to continue next week.

Unionized railway workers of the also extended their strike for a third day, cramming public transportation, especially freight transport. Even though the operation of the subway and regular trains remained stable with 89 percent of trains and subways scheduled to operate normally, repercussions for freight transport was particularly bigger, with only 32 percent of freight transport in regular operation, according to the Ministry of Land, Infrastructure and Transport.

As the damage from the strikes weigh in on South Korea’s already slowing economy, the government vowed on Wednesday night to take all measures necessary including an emergency adjustment for Hyundai, which bans strikes for 30 days, if enacted. Under the existing law, the labor minister can order an emergency adjustment when a labor dispute is related to public services that can endanger the national economy or the daily life of the public.

The government rolled out a set of emergency measures to minimize the impact of labor rest in public transportation, including injecting emergency cargo substitutes and waiving highway fees for substituted trucks. The government is also considering to deploy military consignment trucks, if necessary, a statement by the ministry showed on Thursday. 

Workers launched strikes in the financial industry, Hyundai Motor and rail and subway earlier this week to protest over plans to introduce merit-based system and a wage peak system, affecting other sectors including hospitals.

Unionized workers in the finance sector said that the performance-based system would make dismissals easier and would have a negative impact on the society. 

Unionized workers from medical and health industry held a one-day rally on Wednesday organized by the Korea Health and Medical Workers’ Union. Some hospitals including Seoul National University Hospital still under partial strike as of Thursday afternoon, delaying waiting hours for patients. 

By Park Ga-young/The Korea Herald (gypark@heraldcorp.com)