Maruti Suzuki won't start production until workers sign bond

Maruti Suzuki India (MSI) on Tuesday said it will not resume full-scale production at its Manesar plant till workers sign a 'good conduct bond', as demanded by the company to ensure there is no repeat of quality issues that have surfaced at the plant.

"We can't start full production till the workers are ready. They have to sign the bond," MSI Chairman R C Bhargava told reporters here on the sidelines of the Automotive Component Manufacturers Association's (ACMA) annual convention in New Delhi.

He said the management has been speaking to the workers, but "outside elements continue to influence them".

"We would like to resolve this at the earliest, but the workers need to understand that good conduct is a must," he said.

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Bhargava also said the company is willing to incur the current production loss, as "indisciplined workers inside the plant can cause a greater loss".

He said due to the problems at its plant in Manesar, Haryana, the company has stopped taking bookings for its Swift hatchback and the backlog of orders is well above 80,000 units now.

Production has been severely hit at the company's first plant at Manesar since last Monday (August 29, 2011), when the management decided to force workers to sign a 'good conduct bond' before entering the factory premises, following alleged "sabotage" and deliberate quality compromise.

MSI had commenced partial production of cars at its second plant in Manesar last Friday, almost a month ahead of schedule.

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

On this basis, the production loss suffered by MSI so far since last Monday is estimated at about 6,625 units, valued at over Rs 330 crore, as of September 5. The company said so far, 63 permanent workers at its first plant in Manesar have signed the 'good conduct bond'.

However, the majority of the plant's 950-strong permanent workforce at the plant has not signed the bond. On 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.