Strike at Maruti Suzuki’s Manesar Plant ends – share prices rose by nearly 4%

The 14-day long strike at the Maruti Suzuki India's Manesar plant was called off on Friday morning following a joint agreement between the management, workers and the Haryana Government. As part of the agreement, the management has agreed to take back 64 permanent workers but another 30 will remain suspended. It has also been agreed that around 1,200 casual workers would also be reinstated, sources privy to the talks said.

Following the development, shares of Maruti Suzuki India (MSI) jumped by 3.88 per cent to Rs 1,117.55 on the BSE and were the best performer among the Sensex blue-chips. But with this stir, the company had reported a production loss of 12,600 cars costing them nearly Rs. 630 crores.

Workers at the plant were on strike since October 7 demanding reinstatement of about 1,200 casual workers and 44 permanent workers who were suspended following an agreement signed on October 1 to end a 33-day-long standoff, along with 50 workers who were dismissed or suspended during the current stir. 

As per the agreement, workers will face no work, no pay for the duration of the strike. Also, it the agreement provides for the setting up of a 'Labour Welfare Committee' to promote measures for good relations between the management and workers. The committee will comprise members from the management as well as workers. It is understood that the company has also agreed to arrange for transport services for workers in line with shift timings.

A 'Grievance Redressal Committee' will be set up and it will have representation from the management and workers.

MSI board will be meeting on October 29 to consider among other things, a proposal for setting up of a new plant in Gujarat.

Maruti suffers Rs. 1540 crores loss in ’11 strike

India’s biggest carmaker, Maruti Suzuki India, is in a turmoil situation this year. Already at a loss of Rs. 1540 crores this year with a series of never-ending strikes at one of company’s biggest production plant’s in Manesar, Haryana. Starting this June, the strike at this plant has resulted in excise revenue losses of nearly Rs 350 crore for the government.

Right from the June this year began the series of strike, beginning with a 13 days strike followed by a 33-day standoff from August 29-October 1. After that when things started looking good it again went the same way ending up another fresh strike on October 7.

According to the industry calculations, it is estimated that per car on an average, the government is losing Rs 68,000 in the form of excise duty. And as per the company statistics, Maruti has suffered a huge production loss of 51,375 units. In a nutshell, government has suffered a loss of Rs. 349 crores. Similarly, at state level, the Haryana government is also losing out Rs 6,000 per car on an average as sales tax, resulting in a total of Rs 30.8 crore so far.

The prime reason behind this standoff between MSI and their workers are the conditions put forward by the workers to form a new union called Maurti Suzuki Employees Union (MSEU). And the statememt issues by the company said, “The plant is effectively captive in the hands of striking workers who are bent upon violence," the company said in a statement, describing the situation at the factory as ‘grave.’”. On October 1, an agreement was reached to end the standoff with MSI agreeing to conditionally take back 18 trainees who were suspended. However, it refused to take back 44 regular employees against whom disciplinary action was taken and who remain under suspension.

Shares of the carmaker closed down 3.8 per cent at Rs 1,071 ($21.79) on Monday, against a 2.2-per cent rise in sensex. Maruti shares have fallen nearly 24 per cent in 2011, underperforming a nearly 20-per cent fall in the broader market.