Maruti hits 52-week low as labour concerns continue
Maruti's scrip hit a 52-week low to Rs1,045 per share owing to concerns about labour problems at its Manesar plant.
Maruti Suzuki, India's largest automobile manufacturer, hit a 52-week low to Rs 1,045 per share in early-morning trade amid rising labour concerns at its Manesar plant. However, its stock price recovered later and is now trading higher around Rs 1,082 per share.
Labour problems continue to impact production at the company's Manesar facility, with Maruti sacking five more workers as the strike entered its 15th day. In a statement, the company said the workers were sacked on "charges of attack on three supervisors and a worker last Friday". That takes the total number of sacked workers to 10.
In their efforts to increase car production, the company hired 100 fresh workers to replace those who refused to sign the bond. That will also help the company reduce the waiting time for its best-selling model, the Swift, which was launched last month.
In fact, only 104 of the total of 950 permanent workers representing the Maruti Suzuki Employees Union have signed the bond so far.
The company halted production at its plant late last month after workers refused to sign the bond before entering the factory. Maruti took the step of asking workers to sign the bond after it discovered that workers were deliberately sabotaging production and causing quality problems in the cars being produced. It has a total of 2,500 workers, out of which 1,100 workers are permanent. Maruti had also deployed workers from its Gurgaon plant to assist in production at its Manesar plant.
During August 2011, Maruti's total vehicle sales fell by about 13 percent to 91,442 units compared with a year ago because of the disruptions at its Manesar plant.It is also contemplating of setting up a $1.3 billion passenger car factory in Gujarat.