Mico workers on strike over wage deadlock

About 3,000 workers of the Bangalore-based Motor Industries Company Ltd have gone an indefinite strike from Monday after negotiations for a revised wage agreement failed.

The blue-collar employees are demanding an additional Rs 600 per month per workman as well as a cut in productivity, whereas the management is insisting on a higher productivity-linked wage settlement.

Mico Employees' Association president Ananth Subba Rao told rediff.com that the existing workforce was maintaining the productivity level even after over 2000 employees left the company by opting for the voluntary retirement service scheme during the last 2 years.

"The previous wage accord expired on December 31, 2000. Since then, we held over 60-70 rounds of discussions with the management for the new wage agreement that is to be in force from January 1, 2001 to December 31, 2004. But the company has not agreed to our demands.

How long can 3000 workers maintain the productivity level of 5322 employees who were on the rolls till 2300 of them had quit on VRS, and no replacement was made to increase the workforce?" Rao claimed.  

A Mico official admitted to rediff.com that production at the Bangalore plant had virtually come to a halt on account of the sudden strike, though essential operations were being maintained with temporary workmen, trainee engineers, and supervisors on the management cadre.

The Indian subsidiary of the Euro 35-billion Robert Bosch GmbH, Germany, manufactures automotive spark plugs and diesel fuel injection equipment for the domestic and export markets.

The Bangalore plant primarily manufacturers single and multi cylinder pumps for generators, diesel engines and irrigation pumps.

Denying that the workload had increased in the absence of fresh recruitment drive, the spokesman said the company had invested heavily in introducing new CMC machines and other automation to reduce the processes and improve efficiency.

The bone of contention appears to be on the workers' insistence for an increase of Rs 3500 per month with a productivity level of 10 percent, while the management has agreed to increase their pay scales by an average Rs 2900 per month but at a higher productivity of 14.5 percent.

According to a company statement, a Mico worker on an average  earns about Rs 20,000 per month pending the new wage revision. "It is the highest in the region-cum-industry comparison," the statement added.

Meanwhile, the management has "threatened" to declare lockout from next Monday (June 30) if the employees did not report to duty by then, as per the company's rules and the factory act.

Earlier in the day, the public listed company informed the Bombay Stock Exchange that the workers have stopped reporting to duty from the first shift on Monday, and were on an illegal strike due to inconclusive negotiations over the new wage accord.

"The management and the AITUC-affiliated workers' union (MEA) had signed a memorandum of understanding on January 6 2003 to maintain productivity pending the wage settlement," the spokesman stated.

The demand for higher wages without corresponding increase in productivity is detrimental to the interest of the Company and its stakeholders, according to a statement from the company.

Incidentally, the company is currently headless, as its managing director Andreas Nobis has returned to Germany to join the parent company recently. The new MD is expected to takeover in September.

The Rs 1550-crore (RS 15.50 billion) company, however, clarified that there was no immediate impact on the working in its other plants at Naganathapura on the outskirts of Bangalore, Nashik in Maharashtra, and Jaipur in Rajasthan, as wage settlement in these plants were reached recently.

About 1,600 employees work at the Naganathapura plant, 2,500 in the Nasik plant, and 500 in the Jaipur plant.

It may be recalled that a major strike took place in the Bangalore plant way back in 1979 for over three months for higher wages and other demands, including bonus and incentives.

The company had also resorted last year to block closure in all its plants following lack of demand in a sluggish economy, the sources added.

For the quarter (January-March 2003), Mico posted a net sales Rs 432 crore (Rs 4.32 billion) and a net profit of Rs 52 crore (Rs 520 million).

For the last calendar year ending December 31, 2002, the company reported a net sales of Rs 1,550 crore (Rs 15.50 billion) and a net profit of Rs 134 crore (Rs 1.34 billion).

The company's scrip of Rs 100 per share quoted on the BSE at Rs 4876 on the last trading day on the BSE.