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Auto belt on the brink

In what may snowball into a major crisis in the coming weeks, Trade Union Council --- the umbrella body for all trade unions in India --- has called for a one-day strike in Gurgaon in protest against the death of a worker at auto component maker Rico Auto Ltd’s factory in the industrial belt.

autos Updated: Oct 19, 2009 21:20 IST
HT Correspondent

In what may snowball into a major crisis in the coming weeks, Trade Union Council --- the umbrella body for all trade unions in India --- has called for a one-day strike in Gurgaon in protest against the death of a worker at auto component maker Rico Auto Ltd’s factory in the industrial belt.

The automobile cluster that stretches from Gurgaon (in Haryana) through Bhiwadi (Rajasthan) and Manesar (Haryana) to Dharuhera (Haryana) and houses two of the country’s largest plants --- Maruti Suzuki and Hero Honda --- has been witnessing sporadic instances of labour unrest over the last two months. On Sunday night workers at Rico clashed over the formation of a union and re-instatement of some suspended workers.

“We have called for an all Gurgaon bandh (strike) on Tuesday and have intimated the management of all companies in the area of the same,” said D.L. Sachdev, secretary of the CPI (M)-led All India Trade Union Congress. “There is an on-going strike at Rico and Sunbeam Auto’s factories while there are pending labour issues in as many as 12 companies in the area including Honda Motorcycles and Scooters India (HMSI), Satyam Auto, Microtech and FCI Rico.”

Rico, Sunbeam, Satyam and Microtech refused to comment on the development.

More than 100,000 workers in 150 companies are expected to participate in the strike, Sachdev said.

The sole exception: Maruti Suzuki India Ltd. “Our workers are not going on strike,” a company spokesperson said.

Tomorrow’s strike-call brings back to focus similar incidents in 2005, when a similar month-long strike at the HMSI plant
left 70 people injured and the city paralysed. Though the flash point this time is Rico, Honda is once again in picture as its plant is working at half- capacity since workers are demanding an “above average” salary hike.

“This region is becoming unstable for doing business as no matter what the management does, the unions always create trouble,” said N.K. Rattan, head (sales and marketing), HMSI. “There is a stalemate in our factory and we are incurring a loss by producing only half of our peak capacity. The government has to be more proactive and there has to be a comprehensive state machinery to tackle this problem.”

A prolonged spell of uncertainty in the belt, which has an estimated turnover of Rs 40,000 crore, could ultimately impact auto majors.

“The components industry is the back-bone of the automobile sector and the loss of production does not auger well for anybody,” said Vishnu Mathur, executive director, Automotive Component Manufacturers Association.