Mon, Aug 13, 2012 - Page 14 News List

India’s riot-hit Maruti considering relaunch of operations in late August


India’s top carmaker Maruti Suzuki may resume production late this month at a factory closed last month after a deadly riot by workers, a company executive said yesterday.

The company’s board is likely to meet today to consider a reopening date for the plant where a manager was killed and 96 other supervisors were injured in the unrest, the senior executive added.

Late this month may be “a realistic target” for relaunching operations at the Manesar factory just south of New Delhi which has been shut since the violence on July 18, the executive said.

“Some reports from the police and special investigations are likely to come to Maruti on Monday and some decisions are likely to come afterwards,” the executive added.


He could not say when an announcement might be made, but noted repairs are already under way at the plant where mainly the office areas, not the factory facilities, were damaged. Maruti is majority-owned by Japan’s Suzuki Motor which receives more than a quarter of its revenues from India.

The Indian unit, the country’s largest carmaker by sales, is losing some US$9 million a day from the plant shutdown, analysts calculate.

The board will review security at the plant, which produces some of Maruti’s best-selling cars such as the Swift hatchback, as well as its physical state, the executive said.

Maruti locked out its 3,000 workers at the plant which produces 550,000 cars a year, or 40 percent of the company’s output, three days after the riot.


The plant has experienced several industrial disputes, but none as violent as last month’s riot which shocked corporate India.

Workers chased managers with iron rods and car parts, smashing limbs and torching areas of the plant after a row between an employee and a supervisor, according to witnesses.

A personnel manager, whose legs were broken, was unable to flee and burned to death in an office area.

Joint police commissioner Anil Kumar said the Haryana state government had decided up to 600 police personnel currently guarding the plant would remain there for an indefinite period when it reopens.

Haryana, where the factory is located, is a hub for car production and the state government is worried the unrest could scare away investors.


Maruti chief executive Shinzo Nakanishi has said the plant would stay shut until the managers’ safety can be guaranteed and some executives have voiced fears about returning.

Managers who were injured “are receiving psychological and physical treatment,” said the Maruti executive yesterday. “The healing process is going on.”

The plant is only expected to resume partial operations at first, using its most automated assembly lines, and then scale up operations.

Staffing could be difficult as many workers, having fled fearing arrest. Police say 114 workers, including at least 10 union leaders, are already under arrest.

Maruti last month reported a 23 percent plunge in first-quarter net profit to 4.24 billion rupees (US$76.6 million), hit by a falling Indian currency. Analysts say the plant shutdown could shave 15 to 20 percent off full-year profit.

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