Awaiting formal Chakan strike end letter from union: Bajaj

After several rounds of talks among Bajaj Auto's management and workers’ union at Chakan, it is likely that the strike may have been called off. The union apparently has called of the strike, but a formal letter from it is awaited, says Rajiv Bajaj, managing director of Bajaj Auto. The company suffered a production loss of 20,000-30,000 vehicles in June, he adds.

The company may continue its partial production from its Aurangabad plant until there is clarity on their demands and intentions, Bajaj told CNBC-TV18. “We need to wait and watch to observe how people are working when they return to work possibly from Wednesday or most likely from Friday”, he adds. Bajaj confirmed on accepting the demand of revision in wages. However, the management has not agreed on employee stock ownership plans (ESOPs). Below is the edited transcript of his interview to CNBC-TV18. Q: Can you confirm is the strike off? A: I am going to stop short of saying a categorical yes. My colleagues have informed that the union has apparently called off the strike. I would like to wait for their formal letter, which I believe, is on the way. One needs to see that, but this is what I have heard too. Q: With the resumption of workings at the Chakan plant when will we be able to see 100 percent normalcy in production? A: To be honest, it is hard to say. It depends on what the union has mentioned in its letter. Assuming that it will say that we are coming back, but our struggle will continue; the kind of rhetoric expected, we will continue production of ‘Pulsar’ in the Aurangabad plant. It is about one third of our total requirement. We would not shift that back in a hurry. We need to wait and watch to observe how people are working when they return to work possibly from Wednesday or most likely from Friday. Although we are delighted to have them back, but contra intuitively we would like to believe that we actually have to be very clear and firm, especially with those people in the union created trouble for no reason at all. If they come back to work with the attitude to only disrupt the work, then we have to be even firmer than we have been so far. Hopefully it will not come to that, but that is something we have to wait and watch and understand as they come back to work. _PAGEBREAK_ Q: The strike has been in effect for close to about a month and a half. In this period, what is the production loss that the Bajaj Auto has had to suffer? A: We suffered a production loss of about 20,000-30,000 vehicles in June. Although the strike started only from June 25, the union had managed to disrupt production severely in June. In one shift it was practically close to zero. The biggest impact for us was in June as we were caught unaware when they did this. In July, the loss was practically zero. We did not suffer any production or sales loss in July and the credit for that goes to all the people who managed to jump start production in Aurangabad. Q: The negotiations with the union would likely continue from hereon. What would be the stance that the management would be taking regards the several issues that have been brought up like wage hikes, etc? A: The three primary issues were the – first and foremost they said since you refuse to give us shares, we will stop work. The union understands clearly in retrospect and hindsight that that was a completely irrational demand. I believe that they have wiped it off their mind so, that is dead and buried. The union had unilaterally scrapped the existing wage agreement that was in place and was valid till 2019. We had insisted that we will only discuss the wage agreement and associated issues in the context of the existing agreement. The union has also come to terms with that. So, those two issues are behind us. The issue that remains before us is that of 22 workmen who have been charged with various things from disrupting production to assault. There are stand remains unchanged that while we are in a position to forgive some whose misdemeanors were relatively minor. However, the majority of them, I think about 15 out of 22 would have to go through the very well established time-honored process of an independent inquiry. This is what was holding the union back so far. My guess is that the union will continue to resist this but given the fact that they have called off the strike I would like to believe that 99 percent of the workmen would be relieved, would want to come back to work. I am not sure, the union will find much traction if they try to stake the jobs and salaries of close to 900 of their members for the sake of 15 people who are not entirely innocent so to speak. _PAGEBREAK_ Q: Anything that has been agreed upon so far? Or is the management willing to agree upon to enable the strike to come off and workers to resume on Friday? A: We have not agreed on the shares. We have agreed that wages must be revised. It is the management that wrote to the union March 3 demanding a meeting and revising wages as we have been doing every year. The union refused to do so. We are obliged to revise wages and we will do so and it has always been our aim. We have the numbers to show for that. In auto sector, which includes major manufacturers like Tata, Volkswagen, GM and others, our cost to company (CTC) levels must be right up there with the best in the top 3 or the top 5. We have always done that for our people and will always do that. So we will not fall short on that account. However, when it comes to disciplinary action, we are very clear that nothing matters more than the work culture and we must do what is right for the long-term work culture of this unit. The Chakan unit makes our high-end motorcycles and upon which so much of our exports including KTM depend. We are going to stand firm and this is a time that gives us the opportunity to stand firmer than ever before.