In a day-long strike by a section of workers at Hyundai Motor India Ltd (HMIL) plant in Irungattukottai near Chennai the production has gone down 40% on Friday.

Hyundai is producing close to 2,000 cars a day on a three-shift basis. Sources close to the development told FE that despite a new long-term and handsome wage agreement entered into by the company with the workers committee on Thursday, a section of the workers under the garb of Hyundai Motor Employees Union (HMEU) have resorted to a day-long strike. The workers had been wanting to form a union for quite sometime but the management has not allowed to do so.

When contacted company’s spokesperson told FE, ?We believe we will be able to convince those involved in the strike to return to work. We have been talking to them to sort out the issue and firmly believe that good sense will prevail upon and hope the workers will return to their work soon.?

The official said, ?The production is going on at all three shifts. However, we see a drop of at least 40% in our day’s production of 2,000 cars. If the workers continue to be adamant we will have to look at next course of action.?

?Hyundai workers are the highest paid in Indian automobile sector and have been enjoying major benefits. Hope they will realise the benefits in the new wage agreement and return to work soon,? the official added.

While, Hyundai official claimed at least 200 to 250 workers of the total 1,650 workforce participated in the strike. On the other hand, HMEU spokesperson claimed that majority of the workers have been supporting us since morning and nearly 80% of the production has taken a hit.

It may be recalled that the same workmen had gone on strike for 20 days during April-May this year but the company had not seen any significant drop in production.

According to the HMEU spokesperson, ?We are happy with the wages and have been provided all basic welfare measures. What

we need is the company should allow us to form the union for our overall welfare activities in the future and should re-enter wage settlement afresh.?

Earlier on Thursday, Hyundai reached an agreement with its workforce at the factory here for a term of three years starting April 1, 2009 till March 31, 2012. The settlement, taking into account various factors, which have escalated the cost of living, gave an unprecedented jump (in the range of 21 to 24%) over a period of three years.

The long-term wage settlement will immediately impact all permanent technicians numbering over 1,600 and strive to improve their financial and working conditions significantly. The company handed over the arrears for the last three months. This is the ninth wage settlement with the Workers Committee since the inception of HMIL in 1996. The company started commercial production in 1998 with the launch of the flagship model Santro in September, 1996.

Besides, a direct increase in wages for the permanent workers will now have a larger pool of Rs 40 Lakh (up from Rs 30 lakh) for housing interest subsidy and new incentives linked to attendance, productivity and the quality of work they put in. With the increase in this year?s wages, HMIL workers become the highest paid technician in the automobile sector in the country.