Members of a militant South Korean labour group say they will walk off the job today, briefly halting production at major carmakers, in a move aimed at having the government scrap a US beef import deal.
Rallies against the controversial beef deal have caused a crisis for President Lee Myung-bak's four-month-old government. A senior Moody's official warned last week that protests could hamper the long-term performance of Asia's fourth-largest economy.
Workers at Hyundai Motor and Kia Motors are expected to walk off the job for two hours in the strike called by the Korean Confederation of Trade Unions (KCTU).
Market players said they see the work stoppage as mostly a symbolic move that will have little impact on production.
"To investors, it makes little sense that motor company employees are walking out for political reasons.
These constant labour disputes and disruptions to production are factored into Hyundai Motor shares, discounting their value," said Choi Dae-shik, an analyst at CJ Investment & Securities.
The KCTU, an umbrella labour group that has been part of some of the most violent protests in the country, also called for a massive street protest on Saturday.
South Korea has seen street protests on nearly a nightly basis since early May.
The protests were first directed at the import of US beef due to South Koreans' fears about possible mad cow infection but later broadened into criticism against Lee.
This week, religious groups joined the protests, saying they wanted to bring back calm to rallies that have mostly been peaceful but recently turned violent.
Prime Minister Han Seung-soo at a cabinet meeting yesterday ordered the police and prosecution to use all available means to crack down on violent protests and restore law and order after protests at the weekend left hundreds injured.
South Korea and US 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 US beef.
The protests caused support for Lee, who scored a landslide in a December election, to nosedive and have put on hold his plans to implement pro-business reforms that include tax cuts and privatisation of state-owned assets.
South Korea was the third-largest export market for US beef until shipments were halted in 2003 after a mad cow disease outbreak in the United States.
US beef returned to South Korea 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 yesterday sold out its initial supply in hours.
US beef sells for about half the cost of similar cuts of South Korean beef. It returned briefly last year with customers snapping it up, but sales were again halted after prohibited material was found in a shipment.
