'Labour problem at Manesar is a political issue'

Terming the labour problem at its Manesar plant as a 'political issue', car-maker Maruti Suzuki India said on Thursday it will not compromise on its established norms for industrial relations while attempting to resolve the disturbance.

"My understanding is that the Manesar labour problem is essentially a political issue and not a problem which involves any significant demand from the workers," Maruti Suzuki India chairman R C Bhargava said at the company's 30th annual general meeting in New Delhi.

Since it is a political problem, its resolution will be based on Maruti's established principles for industrial relations, he added.

"We do not intend to compromise on that. We have been talking to the workers and we have made it clear to them that we will not compromise," Bhargava said.

The company, however, expect to sort out the issue at the earliest possible, he added.

Production has been severely hit at the first plant in Manesar since August 29 when the management prevented workers from entering the unit without signing a 'good conduct bond' after alleged 'sabotage' and deliberate quality compromise on cars.

The workers, however, said the management was taking the steps in 'revenge' for a 13-day strike in June demanding the recognition of a new union -- the Maruti Suzuki Employees Union -- at the plant located in Haryana.

During the first two days of the stand-off, MSI dismissed five permanent

workers. In addition, it suspended 26 permanent workers and discontinued the services of another 18 trainees on charges of sabotage and causing quality problems in cars.

The plant has a total of about 2,500 workers, of which 950 are regular employees.

On average, the firm produces about 1,200 units of its Swift, A-Star and SX4 cars every day from the plant, where the labour troubles are centred.

Although limited production is going on, the loss suffered by MSI since the trouble surfaced is estimated at about 8,550 units, valued at about Rs 425 crore (Rs 4.25 billion), as of September 7.

Earlier, in June, a 13-day strike demanding the recognition of the MSEU at the Manesar plant crippled output, with the company witnessing a production loss of 12,600 cars, valued at about Rs 630 crore (Rs 6.3 billion).

Commenting on the domestic market situation, Bhargava said there has been a slowdown due to the cyclical nature of the automobile industry, which has been compounded by high interest rates and fuel prices.

"In the festive season, the market should move up and next year, it will be much better," he added.

Bhargava also said the lack of a proper auto fuel policy, specially regarding the pricing of diesel, has prevented auto companies from investing on engine plants.

In the absence of a clear roadmap on how diesel prices would be placed in future, he said MSI has been unable to decide on whether to invest on increasing production capacities for diesel or petrol engines.