Maruti says resolves labour unrest; shares rise

Fri Oct 21, 2011 3:38pm IST

REUTERS – Maruti Suzuki, India’s biggest car maker, has resolved a labour unrest at its Manesar plant, which had crippled production and sent sales tumbling in a market that has been hit by slowing demand due to high interest rates.

Maruti, which has lost around $400 million in production shortfall this fiscal year and seen its market share falling, said on Friday the operations at the plant would start on Saturday, sending its shares up more than 3 percent.

“The management and workers have signed the agreement in a spirit of cooperation and mutual respect, and look forward to work closely together for the benefit of all stakeholders of the company,” Maruti said in a statement.

Shares in Maruti, which is 54.2-percent owned by Japan’s Suzuki Motor Corp, rose as much as 3.7 percent to 1,117.50 rupees in the Mumbai market that was down 0.6 percent.

Labour unrest has dampened the outlook for Maruti, which has suffered a total production loss of over 64,000 cars in 2011.

Maruti’s share of India’s passenger vehicle market stood at 40 percent last month, sliding 8 percentage points since the unrest began in June with workers demanding the firm recognize a new union.

The unrest came at a time when rising interest rates and input costs crimp demand in the world’s second-fastest growing major auto market after China.

On Friday, Maruti said a “grievance redressal committee” would be set up as part of the agreement which would have representation from the management and the workers. It did not give details.

(Reporting by Sumeet Chatterjee in MUMBAI; editing by Malini Menon)

Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/wx-gUwLMBI0/idINIndia-60039420111021

Tags: Business News, Latest Business News