South Korea labor group strikes against U.S. beef

SEOUL (Reuters) - Members of a militant South Korean labor group walked off the job briefly on Wednesday, halting production at major carmakers, as they called on the government to scrap a U.S. beef import deal.

A senior Moody's official warned last week that protests could hamper the long-term performance of Asia's fourth-largest economy, with President Lee Myung-bak's four-month-old government saying this week the unrest may be scaring away investors.

Hyundai Motor Co, South Korea's top automaker, said in a statement that it expected the partial strike to result in 300 billion won ($286.3 million) or 2,000 vehicles in lost output.

Market players said they saw the work stoppage, called by the Korea Confederation of Trade Unions (KCTU), with more than 600,000 dues-paying members, as a mostly symbolic move having no significant impact on production.

"To investors, it makes little sense that motor company employees are walking out for political reasons. These constant labor disputes and disruptions to production are factored into Hyundai Motor shares, discounting their value," said Choi Dae-shik, an analyst at CJ Investment & Securities.

Kia Motors, a Hyundai affiliate, expects the walk-out to cost some 12 billion won, or 900 vehicles, in lost output, a company spokeswoman said.

Hyundai's unionized workers usually make up lost output incurred during strikes through overtime work and extra shifts.

The KCTU called for a massive street rally for Saturday.

KCTU president Lee Suk-haeng said U.S. President George W. Bush may be in store for a chilly reception when he visits South Korea in early August.

"We cannot welcome his visit," Lee told reporters.

RELIGIOUS GROUPS CALL FOR CALM

South Korea has seen street protests on nearly a nightly basis since early May. The protests were first focused on concerns about possible mad cow infection from U.S. beef, but became a lightning rod for criticism of Lee.

"I feel that it is really fear that has driven this movement," said Nam In-soon, of the protest group People's Association for Measures Against Mad Cow Disease.

This week, religious groups have joined the protests, saying they wanted to bring back calm to rallies that have mostly been peaceful but recently turned violent with mobs smashing police buses blocking the way to the presidential Blue House.

South Korea and U.S. trade officials in late June reworked a beef import deal first reached in April to mollify a South Korean public that said the government was putting its health at risk by importing U.S. beef.

The protests caused support for Lee, who scored a landslide win in a December election, to nosedive and have put on hold his plans to implement pro-business reforms that include tax cuts and privatization of state-owned assets.

South Korea was the third-largest export market for U.S. beef until shipments were halted in 2003 after a mad cow disease outbreak in the United States.

U.S. beef, which sells for about half the cost of Korean beef, returned this week for the first time in nine months.

Major retailers have refused to sell it out of fear of a backlash, but one independent Seoul outlet on Tuesday sold out of its initial supply in hours.

($1=1047.9 Won)

(Additional reporting by Park Jung-youn and Cheon Jong-woo; Editing by Jon Herskovitz and Alex Richardson)