Honda May Suspend Operations At Manesar Plant

Protests by contractual workers have paralysed production at Honda Motorcycle and Scooter India's manufacturing facility for the sixth straight day.

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Highlights

  • Deadlock between contractual workers and Honda management
  • Workers protesting against non-renewal of contracts
  • HMSI production hit by slowdown in auto industry

Honda Motorcycle and Scooter India (HMSI) may shut down its manufacturing facility in Manesar, near Gurugram, as protests by over 2,000 contractual workers entered the sixth day. The protests began last week when some of the contractual workers, whose contracts had expired or were nearing the end of the contract, were asked to go on indefinite leave. According to an official statement HMSI has maintained that 200 contractual members whose term had been completed have been relieved, and that "necessary recruitment will be considered on the basis of future market requirements."

"Based on demand fluctuations and production adjustment 200 contractual members whose term had been completed are relieved from their work. Necessary recruitment will be considered on the basis of future market requirements," the statement said.

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Also Read: Honda Two-Wheeler Sales Flat In October 2019

Around 2,000 contractual workers have been protesting after some workers have been asked to go on indefinite leave. According to the workers' union, as many as 2,000 casual workers have already been asked to leave since August 2019. Honda maintains that only those casual workers whose contracts have expired have been asked to go. The workers are demanding compensation of ₹ 1 lakh for every year each person who is asked to leave, has worked for HMSI.

Also Read: India's Largest Carmaker Cuts Production For Eighth Straight Month

The fact of the matter though is that the crisis in India's automobile sector seems far from over, and it has hit casual workers employed at manufacturing plants the hardest. An unprecedented slowdown in the Indian auto industry has affected sales of most automobile brands, and impacted production. India's largest carmaker, Maruti Suzuki, has cut production for the eighth straight month, and reported a 39 per cent decline in net profit in the second quarter of 2019-20. Most estimates put between 3-4 lakh job cuts over the past several months, as India's auto industry battles one of the worst crises in history.

Also Read: India's Auto Parts Makers Warn Of 10 Lakh Job Cuts

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Both automobile dealers and manufacturers have been cautiously optimistic, even before the festive season kicked, a period when traditionally auto makers see the highest sales numbers and report new sales records. This year, retail sales have been positive during the festive season, but despatches from plants have not been that enthusiastic. Most auto makers have trimmed down production numbers in the middle of a large-scale drop in demand. Honda Motorcycle and Scooter India (HMSI) is India's second-largest two-wheeler manufacturer despatching, on an average, over 5 lakh two-wheelers from its plants every month.

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