Production at tyre giant MRF's factories at Arakkonam, near Chennai, and at Puducherry, has been hit following a sit-in strike by around 3,000 workers.
The former unit produces motor tyres and tubes, while the latter makes radial tyres. Union sources said employees also decided to boycott the coming Lok Sabha elections.
A meeting on Monday between management and union heads saw no settlement.
T V Paramasivam, president, MRF United Workers Union, affiliated with the United Labour Federation, told Business Standard the strike was declared since workers' demands were not met. The demands included reinstatement of around 250 workers, most of whom have been dismissed following unionisation, recognising the union and a willingness to negotiate wages.
He says workers at the 13-year-old plant have continued to be on probation or training and are paid daily wages. The pay averages Rs 4,000-5,000 a month and the workers are demanding wage scales on a par with those at the Chennai plant, where the salary is around Rs 19,000, sources say. Till May 8, he said, the company did not come for a dialogue.
The management had declared a lockout at the Arakkonam unit between December 17 and 19 last year due to labour unrest. Later, it also declared a lockout in Puducherry, where it was lifted on February 26.
Workers in both plants have decided to boycott the coming Lok Sabha elections in the state, which goes to polls on May 13. Union representatives say they have over 70,000 votes at Arakkonam and Pondicherry. They said they would not support any political party since none of them came forward to help them.
While company officials were not available for comment on the strike and its impact, Paramasivam said Arakkonam facility produced 26,000 tyres and 42,000 tubes a day while the Pondicherry unit produced 10,500 tyres a day.
The company reported 4 per cent increase in net profit during the quarter ended March 31 to Rs 68.7 crore (Rs 687 million) compared with Rs 65.6 crore (Rs 656 million) a year ago.