Maruti Suzuki will not negotiate with workers. Sell the stock

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Maruti Suzuki will not negotiate with workers
Maruti Suzuki India: Quotes, News
BSE 7620.05BSE Quote13.25 (0.17%)
NSE 7598.80NSE Quote16.35 (0.22%)
Maruti Suzuki's confrontation with the laborers is set to increase as Chairman of Suzuki Motor Corporation has stated that there will not be any compromise on discipline at the Manesar plant where production has halted on August 29 after the company suspended and dismissed 21 employees. They were charged with sabotaging production and deliberately causing quality problems in the vehicles manufactured at the plant.

There are also reports that in order to continue some level of manufacturing despite labor unrest, the company is getting help from its original equipment manufacturer (OEM) vendors. The OEMs have sent approximately 22 vendors to the Maruti's Manesar plant to help continue some production, according to a report in Financial Express. A Maruti spokesperson was quoted in the report as, "Yes, we have taken some help from vendors. We have deployed them at our plants for quality checks."

The confrontation at the Maruti's Manesar plant started when the company besides firing and suspending employees asked everyone to sign a 'good conduct bond.'

Maruti Suzuki has not allowed approximately to enter the factory as they have not signed the good conduct bond. Instead the company has started hiring on contract to supplement production.

VIEW: This can hit the stock price of the company in the coming week. It will be prudent to book some profit and wait for further clarity before buying the shares again.

Read more about: maruti suzuki, automobile, bse, nse, strike
Story first published: Saturday, September 10, 2011, 13:49 [IST]
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