Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Hero MotoCorp's Haridwar labour pain spreads to Gurgaon

Sep 10 2013, 09:09 IST
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Hero MotoCorp shares at the BSE were down 0.66 pct at Rs 1,290.25 on Friday. Hero MotoCorp shares at the BSE were down 0.66 pct at Rs 1,290.25 on Friday.
SummaryDaily production at Hero MotoCorp Haridwar plant is 50-60pct lower than capacity.

Hero MotoCorp’s labour troubles have spread to multiple fronts, with both Gurgaon and Haridwar plants now embroiled in disputes. While protests by workers in Haridwar over the suspension of 16 of their colleagues continued into the 11th day on Monday, the Gurgaon union too has threatened a strike over the suspension of nine of its office bearers over the weekend, if the company does not take them back.

Discussions between the management, workers and district labour department officials at Haridwar are now scheduled for Tuesday morning. Meanwhile, a meeting with the deputy labour commissioner Gurgaon on Monday did not result in any compromise.

While multiple sources close to the development told FE that daily production at the Hero MotoCorp Haridwar plant continues to be lower than capacity by about 50-60%, company officials claimed that output at the plant was “normal”.

The Haridwar plant is Hero MotoCorp's largest, which at full capacity, makes about 9,000 units a day of popular bike models like the Splendor and Passion. Production at the Gurgaon plant, which makes about 6,000 units a day, was uninterrupted on Monday.

“The company is unwilling to discuss reinstatement of these 16 workers. But we are hoping for a resolution when the management meets local labour authorities on Tuesday. At present, most workers are protesting and are yet to resume work; so, the company is making about 1,500 bikes a day with the few workers who are in inside,” a protesting worker at the Haridwar facility said.

A Hero MotoCorp union member added: “Nine of us have been suspended because we protested after the company did not increase our wages by 20% in the first year as promised under the wage agreement signed in April. We will go on strike if the matter is not resolved soon, but are hoping for a conciliation.”

Responding to emailed queries, a Hero MotoCorp spokesperson said: “At the time of entering into an agreement for wage enhancement, union representatives at our Gurgaon plant had promised to ensure that all workmen put in honest work. However, some workmen have continuously refused to fulfill their side of the commitment. A conciliation meeting was held last week. However, some misguided elements in the union body took law into their hands and assaulted supervisors in the shop floor of our Gurgaon plant in full view of everyone on Friday. In view of this gross act of indiscipline inside the plant, the management remains determined to deal with the incident swiftly, fairly and firmly. Accordingly, involved workmen will be dealt with within the norms of the certified standing order.”

The continuing Hero MotoCorp labour problems are unfortunate for the company given the festive season has begun; any loss of production will constrain it from building up inventory. Between April-July this year, Hero’s volumes are down 3% at 20 lakh units. In fact, the current spate of labour problems come just four months after the company settled a dispute with its Gurgaon plant union over a new wage deal.

Hero MotoCorp shares at the BSE were down 0.66% at Rs 1,290.25 on Friday.

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