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Rediff.com  » Business » Strike at Honda plant: Rs 100 cr loss

Strike at Honda plant: Rs 100 cr loss

July 01, 2005 16:36 IST
Japanese auto giant Honda's two-wheeler unit in India has suffered losses to the tune of Rs 100 crore (Rs 1 billion) in the last one month due to labour unrest, which has led to police deployment at the facility and production being cut down by over 75 per cent.

Honda Motorcycle and Scooter India, which has its plant at Manesar in Haryana, is in the midst of a big labour unrest, with the workers' union demanding higher wages commensurate with the company's growth in the market.

The profitable company, which is credited with reviving the scooter market in India, has suspended about 25 'Line Associates' and was forced to even dismiss five others. Scooter production at the plant has gone down from about 2,000 units a day to just about 250 units.

Sources said the crisis is far from over with as many as 250 workers shunning work and protesting outside the plant, even threatening those who have resumed duty.

Gurgaon deputy commissioner Sudhir Rajpal told PTI that their personnel had to be deployed at the factory last week after the situation appeared to be worsening.

"The police personnel have to stay until normalcy returns," he said, adding that production seemed to be gradually returning to normal though the plant was currently churning out only about 250 scooters per day.

Commenting on the situation, a company official said trouble started after some workers began "indiscipline and insubordination" after being "misled by some outside forces with vested interests."

The official said the agitating employees then started "misleading" others and "through their campaign of false promises and unwarranted pressure tactics", caused loss in production.

Refusing to re-induct suspended workers pending an inquiry, the management has asked others who have joined them to return to work after signing an undertaking that they would "maintain the discipline of the company and ensure normal production at all times."

However, the agitating workers have refused to sign and said they will only return to work if the suspended employees are also re-inducted.

Heated arguments and threats of physical violence forced the company to call the police late last week.

"The management has decided not to take back any of the dismissed employees owing to their past records. The suspended workers would only be considered after the inquiry against them clears them of all charges," the company said, maintaining its tough stand towards those suspended.

The plant employs about 3,500 employees. The state administration has swung into action, trying to broker peace between the two factions.

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