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Damage Taking Toll from Freight Association Strikes

Posted May. 07, 2003 21:51,   

한국어

As the Freight Association, under the umbrella of the National Transportation Cargo and Freight Association, continues its general strike for the sixth consecutive day, an increasing number of industries are suffering.

Even though some of the blockades created by steel transport trucks in Pohang, Kyungbuk Province were lifted on May 7, strikes are being launched in other areas with the expectation that greater damage will be seen nationwide. “Even after the blockades are lifted, we will not be able to use any freight trucks without their drivers,“ said one official from Hyundai Heavy Industries.

Industries consider this weekend a turning point since most stock inventories will have run out then. Damage will be even greater if contract companies are not able to operate their factories due to the strikes.

Steel Industry

According to POSCO and Pohang Steel Management Industrial Complex, potential losses of some 20 steel manufacturing companies reached some 100 billion won in the past six days.

POSCO is using other ways like sea or rail to transport some 11,000 tons of steel out of normal 34,000 tons it sends out per day. But as it cannot transport the rest of it, its inventory has increased to 138,000 tons. POSCO said that its losses now stand at 66 billion won in the past six days alone.

INI Steel is also seeing losses at 4.4 billion won per day as its three production lines have stopped since May 6.

Automobiles

Hyundai Motor said that it would have to stop some of its production lines from May 9 if its foundry company Sungwoo Automotive does not receive any raw materials.

“Inventories will run out around this weekend,” said one Hyundai official. “If strikes continue to the weekend, we might have to stop operations completely.”

“We only have steel sheets for ten more operational days,” said an official from Kia Motors. “If strikes go on until this weekend, we will consider purchasing raw materials from elsewhere.”

Shipping Industry

The shipping industry needs some 8500 tons of steel per day. But some 3800 tons of steel every day is blocked off because of the strikes. Shipping companies such as Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering, Samsung Heavy Industries and Hyundai Mipo Dockyard might have to stop some of their production lines this weekend if they do not receive their steel supplies from INI.

Since Hyundai Heavy Industries needs some 3100 tons of steel per day to operate, but has been cut off from Dongguk Steel and INI Steel, some of its lines are expected to be suspended around May 10.

Hyundai Mipo Dockyard in Ulsan was in danger of halting operations on May 7, but managed to secure the necessary amount of materials by bringing in a logistics center blocked by the Freight Association.

Electronics

Samsung Electronics assumes that it will have difficulties producing some home appliances at its Kwangju Factory is supplied steel from Pohang. The company has three days of steel inventory for refrigerators, 6 days for kimchi refrigerators and 7 days for cleaner motors.

LG Electronics` Changwon Factory is provided with steel from Pohang, so it will have to come up with emergency measures if the strikes go on past next week.

Daewoo Electronics uses 115,000 tons of steel per day and has four days of inventory, so it will start to have production problems around May 10 if the strikes do not end.