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Maruti, union talks fail as losses mount

By Motortrend India Staff   |   15 June,2011

Management and workers at India’s largest passenger car maker Maruti Suzuki have failed to agree terms to bring a 11-day strike to an end, the company said on Wednesday, as losses neared $84 million.

Nearly 2,000 workers at a production facility in Manesar, in the northern state of Haryana, walked out on June 4 after the management refused to recognise a new union. The management on its part asserted that the strike was illegal as no prior notice was given.

“Talks are expected later today (Wednesday), but we will not come back (to work) until all demands are met,” said the general-secretary of the unrecognised Maruti Suzuki Employees Union (MSEU), Shiv Kumar.

The walkout has seen Maruti lose production of about 1,200 cars, mainly high-end mid-sized cars such as the Swift Dzire and the SX4, and 400 million rupees ($9 million) in revenue each day. Production losses for the firm will hit 3.8 billion rupees from a 11,400-unit hit in output by Wednesday night, the spokesman said.

The strike comes as Maruti car sales grew at their slowest pace in nearly three years, with demand in India moderating due to rising input costs, fuel prices and costlier auto loans.

Unions across Haryana state, who planned to support the Maruti strike, have deferred plans until Thursday, after the state government intervened to resolve matters.

Maruti also wants the Manesar striking union to come under one umbrella union, which would include Gurgaon, near the capital New Delhi, where the firm’s second factory is located.

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