Tyre major MRF Ltd has declared a lockout at its Arakonam plant in Tamil Nadu, effective from May 17, 2009, owing to labour unrest. This comes after the company had to temporarily shut down its plant in Tiruvottiyur, Puducherry, in the recent past.

Interestingly, this is the second time in the last few months that the company has gone for a lockout at Arakonam factory for the same reason. Earlier, in December 2008, the company had to declare a lockout for a few days.

When contacted, officials were not available for comments. Industry sources here, however, pointed out that the union of the plant has been demanding the management to recognise it and the management in turn refused to do so. Following this, around 2,000 workers of Arakonam plant have staged a dharna in front the plant and the management decided to go for lockout.

According to sources, even the workers at the Puducherry plant had also gone for dharna since the first week of this May and it is learnt that the management believed to have dismissed over 200 employees due to unrest at the premises.

It may be recalled that the company had witnessed a long lockout at its plant in Tiruvottiyur near Chennai way back in December 2007 due to the same reason and ended up in incurring a loss of over Rs 300 crore, primarily on the export front.

The sources further said that the union/s at the respective plants are insisting on their recognition and on the other hand the management has refused to do so for various reasons.

Already caught in the reduced offtake from the OEMs and declining after-market sales due to overall poor market conditions in the last few months, the fresh lockout would put pressure on the company?s production as well as on its financials, the sources added.

The Arkonam plant makes 12,000 radial tyres a day, while that of Puducherry plant makes 25,000 tyres and 40,000 tubes a day, the sources pointed out.