Maruti Suzuki Ending Lockout at Riot-Scarred Plant
Chairman R.C. Bhargava says production will resume with about 300 employees building 150 cars a day, but he does not know when full daily capacity of 1,500 to 1,700 units will be reached.
August 17, 2012
Maruti Suzuki will end the nearly monthlong lockout at its troubled Manesar plant Aug. 21.
Chairman R.C. Bhargava says at a news conference Thursday that India’s largest auto maker by volume will resume production with about 300 employees building 150 cars a day. He says he does not know when full capacity of 1,500 to 1,700 units a day will be reached.
Bhargava also says 500 of the 2,500 workers at the plant, which accounts for 40% of the auto maker’s production, have been dismissed.
In a key concession by Maruti Suzuki in its ongoing dispute with its labor unions, the auto maker will permanently hire 1,869 temporary workers.
The lockout began July 21, three days after a rampage by workers in which a supervisor was burned to death and nearly 100 other supervisors and managers were injured. Maruti Suzuki says police have arrested 12 union leaders and an investigation is continuing. News reports put the total number of arrests at more than 150.
The auto maker says in a statement that the Haryana state government is providing 500 police personnel who will provide security inside the plant, along with its own force of 100 security guards and 40 other security officers assigned to protect managers and supervisors.
Workers will not be paid for the lockout period.
A preliminary report by police investigators says they have been unable to pinpoint how the violence started or determine how to apportion the blame between labor and management.
Maruti Suzuki so far has lost production of 35,000 cars and losses have reached Rs20 billion ($360 million). Stocks of its best-selling Swift hatchback and Dzire sedan are depleted, and the waiting list for those models exceeds 150,000 names.
Competitors are rushing to fill the Maruti Suzuki void by boosting production of the Toyota Etios, Chevrolet Aveo, and Tata Indigo and Manza. Production schedules have been advanced to bring the Chevrolet Sail, Mahindra Verito, Renault Scala and Ford Fiesta to market. Even Hindustan is rolling out a new version of its 55-year-old Ambassador brand.
A statement released Thursday by Maruti Suzuki announced the end of the lockout, gave details of new safety and security measures and updated the status of its internal and police investigations.
Most of the damage to the press shop and assembly lines has been repaired.
– with Sudhakar Shah in Mumbai
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