Bosch loses $60.4m rev in Feb due to Bangalore plant strike

The Bosch Group has lost USD 60.4 million in revenue in February alone due to the strike at its factory at Naganathpura in Bangalore. The plant has been operating at only 50% of capacity since July last year.

Bosch, which produces spark plugs and regulators for light commercial vehicles, was forced to declare a lock-out at the factory on Monday night after the workers union and management failed to reach a compromise on wage settlements. The 700-odd employees at the plant are demanding Rs 80,000 per employee per year as against the current average of Rs 37,000. Workers also beat up security officers on Sunday night.

N Umesh, Vice-President, Bosch, says, "The workmen have resorted to almost 30-35% reduction in production from February 12. That has hit us. We have lost orders from Suzuki worth Rs 30 crore, which is permanently lost to us, and our supplies to other customers are also hit."

However, VJK Nair, President, CITU, wants a reasonable settlement. "Since the last agreement expired on December 31, 2008, a fresh charter of demands had been given, and negotiations have taken place for one year and three months that ought to have been settled. Since the management has registered quite a lot of profit and have also integrated this plant, they should be able to reasonably share with the workmen whatever value you have created. A share ought to have been given to us which they have denied. There should be a reasonable settlement in this p[ant as well as other Bosch plants. All the workmen should get their due share."

S Prasanna, President-Workers Union, MKS, says the government should intervene. "The fact is that this is not a strike by the workmen. It is a lockout declared unfairly and illegally by the management. Now, the question whether the government should intervene and direct the management to not indulge in illegal activities such as lockout."

Sources say Bosch plans to meet with the Labour Commissioner and workers on Thursday.

In an interview with CNBC-TV18, N Umesh, Vice President, Bosch discussed the impact of the lockout at the Naganathpura plant.

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: There were reports of violence reported at the Naganathpura plant. Is the situation under control and has the lockout been lifted?

A: Yes we had the violence on last Sunday when one of our security officers were beaten up by the workmen outside the factory gate. Subsequently on Monday morning they went on a tool down strike from Monday till night. So we were forced to declare a lockout to prevent further violence.

Since we have declared a lockout, we have requested for police protection. So with that, right now it is peaceful and this is the status.