Workers at Mahindra & Mahindra's Nashik factory went on a tool-down strike on Wednesday in reaction to the suspension of their union’s general secretary, thus paralysing production at the facility.
The management suspended general secretary Pravin Shinde, who has been on a hunger strike since Monday to press for a renewal of the wage agreement which ended last month.
Union vice-president Amol Sonawane is also on hunger strike.
The Nashik plant of Mumbai-based M&M, India's largest utility vehicle manufacturer, makes the Scorpio, Bolero, Verito (sedan) and Xylo models. M&M's stock on the Bombay Stock Exchange dipped on Wednesday by 2.2 per cent, to close at Rs 878.35.
On Tuesday, too, the company lost production of around 90 vehicles due to a three-hour stoppage of work.
Output resumed during the second shift. M&M normally produces around 550 vehicles from the Nashik plant daily.
There are about 3,000 employees.
Wage negotiations between union and management have been on for six months.
However, despite several rounds of talks, the wage agreement was not renewed, say the workers.
They’d earlier threatened an indefinite strike from March 11 if the wage negotiations are not finalised by March 9.
A statement from the company says the tool-down began at 6 pm yesterday and was continuing.
The Nashik factory has a history of unpleasant management-labour relations.
It has seen a tool-down strike thrice in four years.
In 2009, a 10-day strike caused a production loss of Rs 225 crore (Rs 2.25 billion).
Estimates suggest the loss for today was close to Rs 50 crore (Rs 500 million).
The strike comes when M&M is the only company among the volume players to report robust growth, in a falling market.
Its diesel-powered utility vehicles have driven demand for the company.
The company says the strike will not have any immediate impact on sales, as it has three weeks stock in the pipeline.
The company said it was striving to end the strike and restart production.
"Mahindra and Mahindra believes in fair treatment and will keep its dialogue ongoing with the union representatives for stoppage of the current strike so as to reach a mutual agreement", it said.