Maruti Suzuki gains on resuming production
Maruti Suzuki, India's biggest carmaker, resumed limited production at its Manesar plant, shut down by labour unrest on Monday, a company statement said, as the firm hopes to begin talks with the workers to end strikes that have cost over $330 million in lost production.
Maruti, 54.2-percent owned by Japan's Suzuki Motor, has suffered a production loss of over 50,000 cars this year due to labour unrest which culminated last week when workers took control of its Manesar plant in north India.
A supporting strike at a neighboring Suzuki Powertrain plant, which builds engines for the carmaker, halted supplies to Maruti's other plant in Gurgaon, also in northern India, forcing the 2,800 cars a day factory to close.
"We will be talking with the workers today and have started limited production at Manesar," a Maruti spokesman told Reuters, adding that production at the Gurgaon plant was also restarted, but would be dependent on engine supplies.
Maurti has started operations at its Manesar weld shop with some trained workers from among those who have refused to join the strike, the statement said.
The losses compound the woes at Maruti, which saw a 21-percent drop in September sales as rising interest rates and vehicle costs hurt demand in the world's second-fastest growing major auto market after China.
Shares of the carmaker closed 2.4% higher at Rs 1053.05. The stock surged to hit its day's high of Rs 1066.40, up nearly 4% after news of the production restart on Monday, against a 0.3 percent fall in Mumbai's benchmark index.
Maruti shares have fallen more than 27 percent in 2011, under performing a nearly 20-percent fall in the broader market.
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Earlier in the week, Goldman Sachs in a recent report cut production estimates for Maruti Suzuki Ltd and maintained a 'Neutral' rating with a 12-month price target of Rs 1071, a cut from Rs 1173 target earlier.
The brokerage report says, "Owing to persistent labour strikes at Maruti Suzuki's Manesar plant and supplier Suzuki Power Train, we cut our volume estimates for Maruti Suzuki to 1.2mn units for FY12E (from 1.35mn) with further potential downside should the current impasse continues."
Maruti workers' strike enters Day 11, meeting with management likely today
Even as the workers' union and the top management were set to meet on Monday to discuss and end the stalemate, the protestors toughened their stand.
Workers' rally today
The workers have been on a collision course demanding that the sacked employees be reinstated. They also want wages for 64 days, cut by the management.
The trade unions have called for a huge show of strength rally in the city later on Monday.
Earlier, after the Haryana labour department declared the strike illegal, the workers had vacated the factory premises on Friday. The company now hopes to start production from Monday.
'Limited production started'
Meanwhile, a statement released by Maruti Suzuki said the company has responded positively to invitation for talks by the Haryana government. It said that production had started in a limited way at the Manesar plant with the help of workers who have not joined the strike.
The company however said that some of its equipment at the Manesar plant were damaged. In the Press Shop, some parts have been removed from the dies, rendering them non-operational. In the Weld Shop, about 10 robots have been rendered non-operational.
Operational settings of some machines have also been tampered with. The company said these had been repaired in the last two days and made ready for limited operations.
Workers claim support
Meanwhile, more than 127 analysts and fund managers participated in a conference call with Sonu Gujjar -- the president of Maruti Suzuki Workers' Association who has been leading the protest -- last week to understand the reasons for the agitation.
Speaking toHeadlines Today, he claimed to have support from all quarters.
"We want them to recognise our union and reinstate sacked workers. Moreover no action should be taken against any worker," Gujjar said.
Asked about support to his agitation, he said, "This is a workers' agitation and everyone is backing us. ITUC, HMS everyone is backing us. There is no particular body or individual, but we have the collective backing of everyone."
Maruti Suzuki Resumes Production
By NIKHIL GULATI
NEW DELHI -- Maruti Suzuki India Ltd. Monday resumed manufacturing cars at one of its factories after nearly 10 days, even as about 1,500 regular workers continued their strike two days after vacating the plant premises.
The auto maker began operations at a weld shop at the factory at Manesar, in the northern state of Haryana, by using 180 trained workers who haven't joined the strike, the Suzuki Motor Corp. unit said.
Shares of Maruti surged as much 3.7% on the Bombay Stock Exchange after the news. They later pared some gains and closed 2.4% higher at 1,053.05 rupees, outpacing a 0.3% fall in the main index.
Maruti had halted production at Manesar since Oct. 7 after workers, demanding reinstatement of 44 colleagues who were not taken back after a 33-day impasse, went on strike and started protesting in the plant premises.
A court on Thursday asked the striking workers to vacate the Manesar factory and to not protest within 100 meters of the plant.
Maruti said it has in the past two days repaired some of the equipment at the Manesar plant, which it alleged were tampered with by the striking workers.
The company said its management, along with Haryana government officials, met striking workers Monday. "The meeting was inconclusive," said a Maruti spokesman, who didn't wish to be named.
Maruti Monday made 1,700 vehicles at its Gurgaon factory, also in Haryana, where production was suspended on Friday and Saturday due to a shortage of parts from another Suzuki unit called Suzuki Powertrain India Ltd.
The workers at Suzuki Powertrain, as well as those in two other factories -- owned by Suzuki Motorcycle India Pvt. Ltd. and Suzuki Castings Ltd. -- were also on strike since Oct. 7 to show solidarity with their peers from Maruti.
Maruti said it was informed by the management of Suzuki Powertrain that partial production has resumed at the auto-part maker's Manesar factory.
Suzuki Powertrain is the sole supplier of diesel engines as well as transmissions for Maruti's K-series gasoline engines. Only four out of 13 car models Maruti makes don't use a K-series engine.
The current labor unrest follows Maruti's Aug. 29 decision to halt operations at Manesar after it asked 950 workers to sign a "good conduct bond" before they could enter the factory. The move came after the company said it discovered "serious and deliberate" quality problems in cars made at the plant.
Write to Nikhil Gulati at nikhil.gulati@dowjones.com
http://online.wsj.com/article/SB10001424052970204346104576636203905212980.html
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Impasse at Manesar: Labour Minister upset with striking workers
The Haryana Labour and Employment Minister, Mr Shiv Charan Lal Sharma, has expressed disappointment with the striking workers at Maruti Suzuki's Manesar plant for violating the agreement signed with MSIL.
"I condemn workers action. They should have respected the terms of the agreement. However, I am hopeful that that the impasse will end by Sunday," Mr Sharma told Business Line.
Asked about the employees' demand of taking back casual workers, he said casual workers would be absorbed as soon as work operations at the plant normalise.
On October 1, MSIL workers at the Manesar plant agreed to sign an agreement with the management ending over a month of deadlock that began on August 29.
According to the agreement, MSI agreed to reinstate 18 suspended trainees but refused to take back 44 regular employees who remained under suspension.
The workers, in turn, signed the 'good conduct bond,' which required them to declare that they would "not resort to go slow, intermittent stoppage of work, stay-in-strike, work-to-rule, sabotage or otherwise indulge in any activity, which would hamper the normal production in the factory."
A team of Haryana Labour department on Friday met the workers at the Manesar plant and assured them that the remaining casual labourers would be absorbed by October 14 in a phased manner.
Close to 2,000 workers at the Manesar plant and 6,000 workers from different factories of the Gurgaon-Manesar industrial belt (including Suzuki Powertrain India Ltd, Suzuki Motorcycle India Pvt Ltd ), went on a sit-in-strike yesterday, demanding that their colleagues, both permanent and contract, left out, be reinstated.
Meanwhile a company official close to development said the labour unrest at Maruti Suzuki's Manesar plant is degenerating into a law and order problem, with workers indulging in violence, attacking co-workers and supervisors and damaging property inside the factory premises.
"On Saturday, the company was able to rescue as many as 355 contractual workers who were badly beaten up by the striking workers," he said.
The workers, however, denied all allegations. "We do not trust the management or the labour department. They have been making false promises to us since June and have been adopting a vindictive attitude towards us. For instance, the withdrawal of bus service between Gurgaon and Manesar was their way of revenge," a striking worker told Business Line.
When contacted, a company spokesperson said, "Yes, we have withdrawn bus facility at Manesar. Running this facility or its withdrawal is a procedural matter. But it cannot justify a strike."
Keywords: Strike, Manesar plant, Cars, employees' demand, Haryana Labour Minister
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