Maruti may partly resume Manesar plant operations today

Maruti Suzuki is likely to resume some operations at its Manesar plant in Haryana on Tuesday and may even employ temporary contract workers at the plant, according to RC Bhargava, chairman of India’s top passenger car maker.

The company is facing fresh labour unrest at the Manesar plant. Maruti has suspended nearly two-dozen workers at Manesar and has alleged deliberate tampering with components by some workers.

The company has suspended 16 more permanent workers and discontinued the services of 12 trainees today according to PTI, further intensifying the stand-off between management and workers, and completely affecting production for the second day.

The company is asking all its workers to sign a Good Conduct bond, seeking an assurance that they will not indulge in activities that would hamper normal production at the plant. It has already lost around 1,200 units of production and Rs 40 crore in revenue due to the halt in production.

Earlier in June, a 13-day strike by Manesar workers who were demanding recognition to a new labour union, had also crippled production.

Bhargava told CNBC-TV18 today that there had been no final solution yet and the Manesar issue would take time to settle down. However, he was hopeful that the matter would not take too long to resolve itself.

Automobile companies, including Maruti Suzuki, have seen a sharp drop in sales growth this year due to expensive loans and high fuel prices. This fresh unrest at Manesar, which produces the new Swift among other cars, could hurt Maruti further.

Vehicle sales, which rose over 30% in 2010-11 (April-March) are only expected to rise around 11-13% according to Society of Indian Auto Manufacturers. Bhargava, however, feels the industry is only likely to manage about 8% growth in the current fiscal year.

He said sales in August are unlikely to be any better than in July, but is hopeful that there will be some pick up in the festive season. Bhargava also doesn’t expect the issues at Manesar will have any effect on Maruti’s market share.

Maruti Suzuki shares fell over 1.5% on opening on Tuesday but have since recovered the losses to trade up 0.1% at Rs 1,080.70 on NSE in late morning trade.