Ongoing labour unrest cause loss of 500 units/day for M&M

If slowing sales weren't enough of a speedbraker, auto majors are now dealing with yet another roadblock- escalating labour unrest. First Maruti, followed by Hero Moto Corp and now, Mahindra and Mahindra have been hit by labour trouble. In the latest incident, production has come to a standstill at India's largest UV (utility vehicle) maker's Nashik plant due to trouble over wage negotiations, reports CNBC-TV18's Sunanda Jayaseelan.

The workers at Mahindra and Mahindra's Nashik plant have gone on a tool down strike starting last evening bringing all production to a complete standstill. This has affected the production of its three very popular and fast moving SUV products- Bolero, Xylo and Scorpio.
While M&M has confirmed that newsflow, the wage negotiations at M&M which is typically reviewed every three years was supposed to have been finalised in February of this year, that is last month. However, despite several meetings between the management and the workers, there was no success in reaching a middle path.
The workers started a hunger strike on March 4. Post that, some members of the workers union and M&M were suspended prompting those workers to go on the tool down strike.
The secretary of Mahindra Employees Union, Praveen Shinde said, "We have already given a strike notice in the general body meeting. Once the strike starts on March 11, no employee will be allowed to enter the building."
About 500 units per day is the total production loss that M&M is facing at the moment. However, analysts believe if M&M is able to resolve this issue even by March 11, that is the deadline that the workers have set for them, they will be able to make good any sort of loss that they are seeing in their production because of the inventories that they have.
M&M has sent a response saying that the stoppage of the current tool down and a plan strike is on and that all efforts are being made to ensure that a settlement is reached.