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Corporate Jul 20, 2012

Maruti unrest Live: Production halt to impact auto parts suppliers too

By Firstbiz Staff

3:00 pm With the prolonged shutdown at Maruti, not only will Maruti's diesel car production be hit (as the Swift and DZire's diesel models are made at Manesar) but supplies from vendors will also get affected. Auto parts supplier Sona Koyo Steering Systems told CNBC-TV18 that the production halt of Swift and Dzire are impacting supplies for auto parts too.

Car dispatch resumes, facility still shut

2:00 pm Amid heavy police deployment, dispatch of cars from Maruti Suzuki's plant here resumed on Friday even as production facilities remained closed after the violent incident on Wednesday that killed a senior company official.

Trailer trucks loaded with cars, which were produced before the violence broke out, WERE seen leaving the factory premises.

The company usually has about 4,000-5,000 units parked at the factory premises as stocks meant for deliveries to different dealerships across the country.

Before the incident, the company used to roll out 1,500 units on a daily basis.

Gurgaon Police Commissioner K K Sindhu visited the plant and reviewed the security situation. He, however, did not brief the media.

SIAM condemns violence, asks Centre to take action

1:00 pm Industry body SIAM has come down heavily on the violence at Maruti and urged the state and central government to take strict action against the guilty.

In a statement, S Sandilya, president Society of Indian Automobile Manufacturers, appealed to the workers of Maruti not to resort to violence but to resolve issues through mutual discussions.

"Such acts of violence sully the image of India as a manufacturing base, as an investment destination and destroys years of efforts made by government as well as industry to nurture industrial development in the country, which cannot be allowed to happen".

Blame game on, Union wants PM to take action

11:30 am As Maruti''s plant remains shut for a third consecutive day after the violence on Wednesday in which one senior company official was killed, the blame game between the management and the workers still continues. While the company has blamed the workers for the fire, the Union has blamed the management's intolerance and suppressive behaviour for the entire incident.

In an interview with CNN IBN All India Trade Union Congress (AITUC) General Secretary Gurudas Dasgupta blamed the central government and the Prime Minister for their inaction."The Government of India hasn't taken any step to discipline Suzuki. I hold the Prime Minister responsible," he said.

11:00 am State Labour Min suspects external elements in clash

Haryana's Labour Minister Shiv Charan Lal Sharma told CNBC-TV18 there is no clarity on when production will resume and emphasized the need to find reasons for the escalating tension at the factory. The minister suspects the involvement of external elements.

The company had stated yesterday that it was "still assessing the total damage to property and facilities from the acts of arson. What is clear is that the office facilities have been burnt beyond repair, as have the main gate, security office and the fire safety section."

Centre suspects Maoist links, SIT begins probe

10:AM The Centre is keen on a probe to find out if the violence in the Maruti plant in Manesar has any Maoist link.

Though no Naxal link has been found prima facie, official sources told PTI there was a need for a thorough probe to find out the truth into it. Sources said there were intelligence reports of CPI (Maoists) setting up urban bases in different cities, including Gurgaon.

A Special Investigation tea, headed by Assistant Commissioner of Police Ravinder Tomar and including six inspector ranked officials, will probe the incideat at Manesar plant, Haryana Police said on Thursday.

Hooda says no political angle to Manesar unrest

However, chief minister Bhupinder Singh Hooda ruled out any political angle to the violence that erupted at car maker Maruti's Manesar plant in Haryana yesterday. Terming the violence as "unfortunate", he said around 100 persons have been arrested so far. "Appropriate action will be taken against them... FIR have been lodged and nobody would be allowed to take law in his hand," he asserted.

Maruti Suzuki's General Manager Human Resources was charred to death in the violence in its car plant allegedly triggered by workers on Wednesday for which over 90 workers have been arrested. Nearly 100 others were injured in the violence.

9:00 am Prolonged lockout at Manesar likely; Japan condemns violence

An indefinitely long lockout is looming ahead for the Manesar unit of the Maruti Suzuki plant, where a workers' agitation resulted in the death of a company executive and forced the Japanese government to deplore the developments.

An indefinite lockout may cripple the already slowing auto sector growth this year.

A report in the Economic Times has said the state government is considering recommending a prolonged shutdown of the facility which has a history of worker unrest.

Naresh Sharma/Firstpost

The unit had witnessed three staff stirs last year and the company had to incur an operational loss of around Rs 2,000 crore.

The Society for Indian Automobile Manufacturers has already marginally reduced its growth projection for this financial year. The unit has capacity to produce 550,000 vehicles a year.

"Maruti's 11 percent dip last year brought the entire passenger car segment to its knees and this abrupt halt at its plant would have a deep impact on this fiscal's sales," Deepesh Rahore, MD (India) of IHS Global Insight, has been quoted as saying in the report.

Meanwhile, Mint reported that the violence has "assumed diplomatic overtones" with the Japanese government condemning the violent agitation by the workers.

"The embassy of Japan strongly deplores the loss of life...caused by the sabotage perpetrated by a group of workers at the Manesar plant...and condemns the violence and barbarism," the report quoted a statement from the Japanese embassy.

It urged the state government to punish the guilty and enforce law and order.

"We expect that the Manesar plant will resume its operations and normalcy will be recovered at the earliest," the report said.

On Thursday, reacting to the incidents at the plant, shares of the company had closed down nearly 9 percent down, hitting a two-year low, on the Bombay Stock Exchange. Reportedly many brokerages have put a hold rating on the stock.

by Firstbiz Staff

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