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.
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