No end in sight for strike at Bajaj’s Chakan plant
Company says it is open to negotiating a wage hike but will not change its stance on the allotment of shares
Mumbai: It’s a month since workers at Bajaj Auto Ltd’s Chakan plant struck work but neither the management nor the union appear to be giving in over the issue of wage hikes and the allotment of discounted company shares to employees.
add_main_imageThe Chakan plant employs 1,486 workers, of which 900 are permanent, 364 are trainees, and the rest are part of the “learn and earn” employment-promotion programme run by the state employment exchange. The strike began on 25 June. The Vishwa Kalyan Kamgar Sanghatana (VKKS) labour union wants Bajaj Auto to allot 500 shares each to all workers at a price of ₹ 1 per share, besides a wage hike and better working conditions.
The production loss amounts to 25,000 units, said Kailash Zanzari, vice-president of manufacturing. However, he said that there has been no shortfall in despatches to dealers so far. NextMAds
While the company doesn’t expect demand to pick up before the festive season kicks in later this year, “as a result of lower production, dealer inventory is likely to come down from four weeks to a week”, he said.
The company “is very open to take up the wage negotiation issue”, but it won’t change its stance on the allotment of shares as it doesn’t see any merit in such a move, he said.
“There is no question of allotment of shares. However, we are committed to a salary review but only after normalcy in production is restored. We won’t do it at gunpoint,” he said.
The labour trouble has broken out at a time when companies are paring production and undertaking scheduled closures of their plants. Though none of India’s two-wheeler firms have reported production cuts, dealers are grappling with unsold stocks.
Companies typically go slow on dispute resolution when demand falls since it helps them get rid of excess inventory and put them in a stronger negotiating position, experts said.
“During a slowdown, companies can afford to adopt a wait-and-watch policy,” said Pranabesh Roy, dean, academics, at Jamshedpur-based Xavier Labour Research Institute.sixthMAds
An analyst at a domestic brokerage, who declined to be identified, said workers may have to settle for less and compromise on their demands when sales are down, one of the reasons it could take longer for the issue to be resolved.
Following the slowing economy, high interest and fuel costs, auto sales in India hit a decade low in fiscal year 2013. Even demand for two-wheelers, relatively insulated compared with cars, contracted to a four-year low.
In 2008, when auto sales contracted in India following the global economic slowdown, at least three firms—Apollo Tyres Ltd, MRF Ltd and Bosch Ltd—had a standoff with workers. Unable to reach an agreement, the companies had resorted to lockouts.
Zanzari ruled out a lockout, adding that irrespective of market condition, Bajaj Auto is keen to resolve the issue.
“The market condition is not that important,” he said. “What is critical is restoration of the culture.”
Meanwhile, Bajaj Auto has been shifting production of the models produced at Chakan plant to its facility at Waluj in Aurangabad.
In the month since the strike has begun, Bajaj Auto has shifted 40% of its production to the Aurangabad unit, which produces the Pulsar, Avenger and KTM models.
In a statement on 24 June, the company said 798 workers had reported to work that day and that it would produce 1,900 vehicles at Chakan and 1,100 Pulsars at Waluj.
“These are false claims as all the workers engaged in core production jobs are with us,” said Dilip Pawar, president of the labour union, adding that he plans to intensify the stir.
Bajaj Auto has appealed to the industrial court to declare the strike illegal. It said the workers went on strike three days before the actual date on which they were to resort to line stoppage. The hearing is due on 29 July.
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First Published:25 Jul 2013, 08:51 PM IST
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