South Korean Workers Strike

Autoworkers and other laborers in South Korea went on a nationwide strike over job security Wednesday, ignoring government warnings that labor unrest would scare off badly needed foreign investment.

The two-day strike was called by the militant Korean Confederation of Trade Unions, which claims a membership of 500,000 in auto, machinery, and other heavy industries. It vowed to organize a bigger strike in early June unless massive layoffs are halted.

In Ulsan, an industrial city 175 miles southeast of Seoul, 30,000 unionized workers at Hyundai Motors Co. brought the assembly lines to a halt and shouted "We demand job security!"

Thousands of workers at Daewoo Motors Co. outside Seoul also joined in the strike, but management of the country's second-largest carmaker said it persuaded some union members to return to work later in the day.

In Seoul, 2,000 workers rallied and marched peacefully through downtown streets.

Union leaders also demanded a sharp increase in unemployment benefits and a speedier restructuring of South Korea's bloated, family-controlled conglomerates, or chaebol.

The chief government negotiator, Kim Won-bae from the Labor Ministry, called those demands "unacceptable" but added that the government will continue to talk with labor.

Layoffs aimed at restructuring South Korea's inefficient industries were one of the conditions set by the International Monetary Fund when it bailed out the country last December.

But that prescription was anathema to union members accustomed to lifetime employment. Government figures show that the number of jobless people has doubled to nearly 1.5 million.

Japanese Auto Production Falls

Japanese automakers produced 14.1 percent fewer vehicles in April than a year earlier, an industry group said Wednesday.

The production of cars, trucks, and buses in Japan tumbled more than 125,000 vehicles to 761,766, the Japan Automobile Manufacturers' Association said.

Output of trucks was the hardest hit, falling almost 22 percent to 150,346 vehicles. The number of new passenger cars built dropped 12 percent to 606,399 vehicles.

While demand for Japanese cars remains robust in North America, domestic Japanese consumption has lagged since a sales tax increase last year. Exports to Asia have also fallen because the financial crisis there sent local currencies into a tailspin.

Moody's Downgrades Five Japanese Banks

Moody's Investors Service downgraded credit and financial strength ratings for five major Japanese banks on Wednesday, citing concern over Japan's weakening economy and the Asian financial crisis.

In a grim assessment of the country's financial institutions, the credit agency also put another four Japanese banks on review for possible downgrade.

"Moody's believes that the combined scale of these problems may overwhelm many banks' internal resources and necessitate subtantial official assistance," the agency said in a statement.

The downgraded banks were Bank of Tokyo-Mitsubishi Ltd., Industrial Bank of Japan Ltd., Dai-Ichi Kangyo Bank Ltd., Sakura Bank Ltd., and Sumitomo Bank Ltd.

Japan is grappling with its worst economic downturn in decades. Unemployment is at a post-1953 high of 3.9 percent, bankruptcies are piling up and banks are struggling with loads of bad debt left over from the collapse of the real estate boom in the early 1990s.

Moody's took the Japanese government to task for failing so far to institute the tough measures needed to strengthen the troubled financial system.