The labour strike at Maruti Suzuki’s Manesar unit is burning a deep hole in the company’s pockets. It has come at a time when car sales are showing signs of a slowdown coupled with rising commodity prices. The four-day old stir has already cost the company a loss of R120 crore, in terms of lost production. And the situation looks grim with no solution at sight. Company officials told FE that Maruti Suzuki was seeking a long term solution even if it means that the strike drags on longer.
?The Manesar assembly line constitutes around one-fourth of the company’s overall production. About total turnover at the facility (in Manesar) is around R40 crore a day and so far we have lost three days in production,? chairman of Maruti Suzuki RC Bhargava told FE. Though the strike broke out on Saturday, there was no production loss on Sunday since it was a holiday.
Bhargava added, “We are clear that we dont want a short term solution to the issue. We dont want a situation that we resolve the problem today and it breaks out again tomorrow. All the planning and efforts would be wasted.” He said that the company’s management was in close contact with the striking workers and listening to their demands but would not tolerate any kind of misbehaviour. “The strike has come as a complete surprise to all of us,” he said.
At present the Manesar unit produces more than 20,000 cars a month including Swift, A-Star, SX4 and DZire. Auto analysts said that if Maruti did not find a solution to the problem soon then the June sales figures could be very low for the company. “Maruti sells around 90,000 units per month and since Manesar produces around 20,000 units, sales would be badly affected this month,” an auto analyst with a global consultancy firm said.
Another Maruti Suzuki official, who did not wish to be named, blamed the All India Trade Union Congress or AITUC for the strikes. The official explained that AITUC was looking to make inroads into the Gurgaon-Manesar belt for a long time and only managed it once Honda Motorcycle & Scooter India (HMSI) set shop in Manesar in 2005.
“Despite HMSI’s union being affiliated to AITUC it still felt that it could not create a foothold until and unless they made inroads into Maruti Suzuki,” the comany source said. He said that even if the strike went on for another month, Maruti was well within its means to face it. “We do not have any debts to pay off. We will hold our ground,” he said.
This is the first time in over ten years Maruti Suzuki has had to face worker strikes. The 600-odd workers out of 2,000 odd at its Manesar factory are demanding that the management give recognition to a new labour union Maruti Suzuki Employees Union (MSEU). However the company has refused to budge arguing that since the workers already have an existing union called Maruti Udyog Kamgar Union (MUKU) for which elections would be held next mont there was no question give recognition to another one. On Monday the company had fired eleven of its workers.
Maruti Suzuki has had rounds of meeting with the Haryana labour department but still no solution is in sight. The company source hinted that owing to such turbulence in the Manesar-Gurgaon belt it was becoming a major problem to continue. “We have to look around to other places,” the source said.