(Updates with end of strike at one city)
By Yoo Choonsik and Park Sung-woo
SEOUL, July 22 (Reuters) - South Korea deployed hundreds of troops to help at subway stations on Thursday during a strike while union action widened to a car plant and activists at a major oil refiner defied arrest and deadlines to return to work.
In a minor breakthrough, subway workers at the smallest of the four strike-hit cities agreed to end their walkout. But little progress has been made in the capital, Seoul, in the two day labour strife, officials said.
The wave of strikes pose a serious test for President Roh Moo-hyun, a former labour lawyer who has previously been criticised by employers and foreign investors for being too soft on the country's notorious militant labour unions.
The widening strike action comes when the economy, Asia's third-largest, is struggling with weak domestic spending and depressed business investment.
The 757-member union at Inchon city, west of Seoul, has now agreed to return to work from 5:30 a.m. on Friday (2030 GMT on Thursday) when train starts running, said Kim Tae-woo, an official at the city government-owned subway operator.
Talks have also been going on and off in the cities of Pusan and Taegu between the unions and management to end a strike over wages and union demands to add workers, a transportation ministry official said.
But more than half of about 14,800 union members in Seoul stayed away despite warnings of harsh punishment by the state prosecutors and the management. Train service and ticketing was slowed but the trains were still running.
The ministry official said the management rejected requests from the unions for talks, demanding the strike be dropped first.
"Unions have expressed their intention to talk with the management but the management keeps demanding them return to work first," the ministry official said of the situation in Seoul, home to about a fifth of the country's 48 million population.
WARNINGS, ADVERTISEMENTS
The agreement at Inchon came after the state prosecution office and the management at Seoul's two subway operators increased pressure on the striking workers.
Ahn Chang-ho, deputy chief for public security at the state prosecution office, said it planned to file for court warrants later in the day for the arrest of five union leaders at LG-Caltex Oil Corp for organising the strike.
Workers already ignored deadlines set for the morning by the two subway operators in Seoul to return to work and most strikers did not return to work at the huge oil refinery complex run by LG-Caltex Oil Corp. by an 8:00 a.m. deadline set by management.
LG-Caltex said 53 striking workers had returned to work by Thursday afternoon, or said would go back, but 786 workers remained on strike, defying a company order to return to work. The company had told striking workers to return to work by 8 a.m. on Thursday (2300 GMT on Wednesday) or face penalties under company rules.
Apparently hit by the labour unrest, the company delayed a $300 million bond offering "until further notice", a market source said. Company officials could not confirm the delay.
The company said about a third of plants had resumed normal operations and it now aimed to bring its refinery back to full operation in a week or two. It normally produces 650,000 barrels per day and accounts for a quarter of domestic refining capacity.
The industrial unrest spread into the automobile sector when workers made good on a threat to strike at Ssangyong Motor Co., a sports utility vehicle maker, the company said.
The company's 5,600-member union had staged a partial strike since July 12 to push for higher wages and job security because of a planned sale of the company to a new owner.
Seeking to turn public opinion against the subway strike in a country that traditionally sees a wave of industrial unrest in the summer, operators in Seoul placed advertisements in several newspapers criticising the striking workers.
"Is it fair for an employee working 19 days a month and receiving 45 million won ($38,700) a year to stage a strike?" read the advertisement. "Does the company have to accept the union's demand the workforce be increased by 34 percent?"
The strike by subway workers was launched after management rejected union demands for wage increases of up to 10 percent and the recruitment of more workers after the work week was cut to five days from six from this month.
About 10,000 former drivers, soldiers and public workers have been drafted in to try to keep the subway running, but trains were now running at much wider intervals than usual. ($1 = 1163.3 Won) (Additional reporting by Dominic Lau in Hong Kong)