Maruti not to abandon Manesar plant, says Bhargava (Lead)

July 21st, 2012 - 9:44 pm ICT by IANS  

New Delhi, July 21 (IANS) Passenger car major Maruti Suzuki declared an indefinite lockout at its Manesar (Haryana) plant but denied any plans to shift after Wednesday’s violent clashes that left a senior executive dead and scores injured.

“This thought of us moving out of here is complete fiction. There are no such plans and neither were there any such plans to shift out of Manesar,” said R.C. Bhargava, chairman, Maruti Suzuki.

Bhargava was speaking to media persons three days after violent clashes and arson at the Manesar plant. Workers are alleged to have beaten up top executives and set the factory on fire.

The fire claimed the life of a senior executive and injured nearly two dozen management and supervisory staff members, according to police.

The same plant earlier faced labour trouble in September-October 2011, when the company suffered nearly Rs.2,500 crore in production losses. The strike at the time ended in the first week of November when union leaders resigned after reportedly accepting hefty payouts.

Bhargava’s clarification comes as Maruti Suzuki’s plans for a new plant in Gujarat were being linked to frequent labour unrest in Haryana. In fact, the company plans to shift its manufacturing in phases from the cramped Gurgaon area to the Manesar plant.

According to Bhargava, the Gurgaon plant will eventually be used for manufacturing engines and other components.

Shinzo Nakanishi, managing director and chief executive of Maruti Suzuki explained that the plan for a new factory in Mehsana, Gujarat, is an expansion activity, and is not meant to shift the Manesar facility.

“There is a difference between expansion and shifting. (Gujarat) plans are for expansion,” Nakanishi said.

Meanwhile, the company said that it would not resume production work till the causes of Wednesday’s violence are fully investigated and identified.

“There is an indefinite lockout at the Manesar plant. We will not risk the life or health of any of our employees, including workers, until we can identify the root cause of Wednesday’s incident and take corrective action,” Bhargava declared.

The Haryana government has constituted a police Special Investigation Team (SIT) to probe Wednesday’s incident. The police have arrested 99 workers on charges like murder, attempt to murder and several other offences.

“We are not in a position to start production at the factory. Safety of colleagues is more important than making some cars, making some money,” Bhargava said.

The lockout is expected to hit company’s plans to roll out 1.5 million units in the current fiscal. The auto major had planned to reach the production milestone in the last fiscal.

Maruti Suzuki produced 1.13 million cars last fiscal, which was 11 per cent lower over 1.27 million units produced in 2010-11.

The Manesar plant manufactures some 1,200 cars per day on an average and has been specially designed for manufacturing diesel cars.

Frequent labour unrest of late has caused production loss and pushed back delivery dates of its best selling cars like the Swift, eroding consumer confidence.

However, Maruti Suzuki’s flagship plant in Gurgaon, where the popular Alto and other wellknown hatchbacks are manufactured, is operating normally.

Bhargava said the management had settled all outstanding issues that were raised by the workers after the last strike nine months ago.

“The only outstanding issue of casual workers to be inducted as temporary or permanent workers will be resolved by March 2013,” Bhargava said.

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