Maruti incurred $93.5 mn loss during 13-day strike

Last Updated: Friday, June 17, 2011 - 15:26

New Delhi: Maruti Suzuki ended a 13-day strike by employees that had crippled production and led to more than $90 million in lost output for India`s largest car maker, a spokesman said on Friday.

About 800 workers had been on strike since June 4 at the Manesar plant in the northern state of Haryana, demanding recognition of a new union specific to the plant. The company has one workers` union recognized by the management.

The spokesman said the company would not recognize a new union but would look into forming an individual body at the plant. However, a decision on this has not been made yet and the details are still being discussed, he said.

The company, which operates two manufacturing facilities in India, also agreed to reinstate 11 workers who had been fired on grounds of indiscipline, the spokesman said.

Maruti, already slammed by a massive slowdown in sales, has faced a production loss of 12,600 units as of Thursday. That translates into an estimated loss of 4.2 billion rupees ($93.5 million) for a company that makes half the cars sold in Asia`s third-largest economy.

The company, 54.2 percent-owned by Japan`s Suzuki Motor Corp, posted its slowest pace of growth in more than two years last month. It reported a 1.9 percent rise in May sales this year, compared with a 28-percent rise a year earlier.

India`s auto sector has seen spurts of industrial unrest over the past two years.

The strike has raised questions over how India will preserve its status as a low-cost manufacturing base while avoiding growing discontent among employees.

India`s labour laws are rated by the World Bank as among the most rigid and some analysts say they hurt corporate competitiveness in Asia`s third-largest economy.

Bureau Report



First Published: Friday, June 17, 2011 - 15:26

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