Striking workers forced Hyundai Motor to stop all production in India on Monday, the latest in a series of union battles that have pushed the nation’s No. 2 carmaker to move some production to a factory in Turkey.
This is the fourth strike since 2008 at Hyundai’s two adjacent plants in Sriperumbedur, outside the growing auto hub of Chennai, in the southern state of Tamil Nadu, the company said.
Hyundai is India’s leading car exporter, having pioneered the model of making India a small car export hub, which global auto majors like Ford, General Motors and Nissan are now trying to emulate.
But labor unrest is unraveling those plans for Hyundai.
Spokesman Rajiv Mitra said in an interview on Monday that Hyundai plans to move European export production of its popular i20 compact from India to an existing factory in Izmit, Turkey by August.
“What triggered it is the labor problem,” he said.
Turkey has other advantages, like reduced delivery time and lower taxes for its main export market, the EU, he added.
In a statement on Monday, Hyundai said 150 workers had occupied the factory, forcing a halt to production that resulted in a loss of 2,200 cars worth 650 million rupees (US$13.8 million).
The honorary president of the Hyundai Motor India Employees Union, A. Soundararajan, told the Times of India that 400 workers occupied the factory on Sunday midnight, and another 800 gathered outside after four more workers were dismissed on Sunday. All shifts have been halted since then.
The company and union were scheduled to meet with state labor officials on Tuesday to continue talks.
“We hope we can resolve it soon,” Mitra said. “We expect the government to give us some support.”
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