Sales to be hurt if strike lingers: Maruti Suzuki

The country's largest car maker has already had a production loss of 3,000 units.

The country8217;s largest car maker Maruti Suzuki India said its sales may be hit if strike at its Manesar plant prolongs,while it has already incurred production loss of about 3,000 units till the 4th day of stir by workers.

Even as the firm tries to find an end to the impasse,it received a shot in the arm from Haryana Labour Commissioner who termed the strike as 8220;unwarranted8221; and also backed the company8217;s decision to sack 11 employees. 8220;If the strike continues for a long time,it will affect our sales and will increase the current waiting period of our diesel cars,8221; said Maruti Suzuki India MSI Chairman R C Bhargava.

The Manesar plant rolls out about 1,200 units every day in two shifts. The factory produces hatchbacks Swift and A-Star and sedans DZiRE and SX4.

While diesel versions of Swift and DZiRE at present have an waiting period of 3-4 months,customers are waiting for up to one and half months to take the delivery of SX4. The A-Star is MSI8217;s flagship export model. 8220;Export is also likely to be impacted if the strike prolongs8230; The stalemate still continues,8221; Bhargava said.

The strike comes at a time when MSI has seen slowing down of sales in the recent past as the auto industry grapples to overcome challenges of rising fuel prices and interest rates.

In May,MSI8217;s domestic sales grew by just 3.9 per cent to 93,519 units from 90,041 units in May,2010. Talking about the loss to the company,a MSI spokesperson said: 8220;The situation is the same as yesterday8230; We have lost production of around 3,000 units so far since Saturday8221;.

As per industry estimates,the value of the loss is around Rs 150 crore till Tuesday.

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Meanwhile,Haryana Labour Commissioner Satwanti Ahlawat backed the company8217;s move to sack 11 employees saying 8220;the company is within its right to terminate any employee who is creating indiscipline in the factory premises8221;.

She said the standoff between the management and the workers was an internal matter of the firm but added workers 8220;can form the new union as law provides for the same8230; But the strike by employees,which has crippled the manufacturing facility to press for new union,is not a right step8221;.

As the strike continued,the company8217;s scrips closed the day at Rs 1,245 per share,1.06 per cent up apiece on the Bombay Stock Exchange.

On June 4,about 2,000 workers struck work from the second shift at Manesar facility. Production at the plant is

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completely stopped at present with no signs of immediate breakthrough as workers said they will continue the agitation till their demands are met.

Striking workers are demanding the recognition of a new union 8212; Maruti Suzuki Employees Union MSEU 8212; formed by those working at the Manesar plant,besides retaining contract labourers for the two upcoming new units inside the complex.

Refraining from any disciplinary action against the 11 office bearers of the new union is also another demand.

However,the company had on Monday sacked 11 employees,including eight office bearers of MSEU and three other workers,for allegedly inciting others to strike work. The workers said the company currently has one union,Maruti Udyog Kamgar Union,which is mainly dominated by those working at the Gurgaon facility.

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A worker had said the issues at the Manesar plant are different from those of Gurgaon unit,and hence they are seeking recognition of the new union.

The company8217;s Gurgaon plant,however,is functioning normally.

The last time the company witnessed a major strike was when workers stopped production for three months from November 2000 to January 2001.

MSI is setting up two new units with an annual installed capacity of 2.5 lakh units each inside its Manesar facility at a total investment of Rs 3,625 crore. The existing plant in Manesar can produce 3.5 lakh units annually,while the three units in Gurgaon have a combined annual capacity of 8.5 lakh units.

Later in the day,Bhargava said in a statement while talks are on with the workers,the company would not compromise on good governance practices and not look at any short-term solutions to end the strike. 8220;We would want to resolve the strike in a democratic manner,keeping focus on workers8217; interests. Any strike is a serious matter,but we would not like to compromise on good governance practices,8221; he said.

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While stating it is difficult to predict how long the strike will last,he said: 8220;However,discussions are on and we will not look at any short-term solutions8221;.

Bhargava further said:8221;We want workers to understand,we are living in competitive times,any strike or labour unrest is neither in interest of the company nor the workers8221;.