Labor unrest comes to an end and production resumes at Maruti unit in Manesar

There is finally light at the end of the tunnel for Maruti Suzuki India Limited.  The month long battle between laborers and management was finally called off on Saturday.  The strike which was ongoing since the end of August has had devastating effects on the company’s profits. Problems with labor have cost Maruti Suzuki approximately $135 million, and the company has also recorded a drop in sales by about 20% during the month of September 2011.

As per a statement released by MSIL, workers who till date had refused to sign a good conduct bond, finally conceded on Saturday.  Workers will resumed their duties from Monday, October 3rd.  Maruti also stated that striking workers would not be receiving their salaries for the period of the strike. Apart from Maruti enduring substantial losses, the event throws up questions regarding labor laws in the country.

800 workers went on a 13 day strike in June, and the latest strike finally lasted more than a month.  This has led to loss in production and heavy losses for the company which was already reeling under slowdown, and falling demand.  Maruti sales plummeted for the first time in three years during July 2011 and this trend has continued only to be escalated by strikes and labor unrest. While production has resumed, it is left to be seen whether Maruti can deliver vehicles this month as per demand wherein sales volumes are likely receive a boost because of Diwali shopping. The future may not look too bright immediately even though workers are resuming work.