Honda’s Manesar plant shuts down after strike

Honda’s oldest manufacturing plant based in Manesar, Haryana has suspended production following allegations of misconduct by workers and a week-long tool down strike.

More than 2,000 contractual workers have participated in the strike against the retrenchment of over 200 contract workers at the factory. Slowdown in retail demand had forced Honda, the second largest two-wheeler company in India, to cut back on production and lay off surplus manpower.

The management confirmed that production at the Manesar plant has been suspended with effect from November 11. Business Standard quoted Manesar Honda plant head Saibal Maitra as saying, “The union repeatedly asked contractual workers to continue with their illegal strike and instigated them to sit inside the company premises.”

Without specifying any date for resumption of operations, the report said, stakeholders “will be informed about resumption of operations once the condition at the plant normalise.”

Honda Motorcycle and Scooter India (HMSI) is expanding total annual production capacity to seven million units by 2020. The company has factories at four locations: Haryana, Rajasthan, Karnataka and Gujarat.

The workers' strike comes at a time when the two-wheeler industry is facing one of its worst slowdowns ever. Despite launch of new models and discount schemes two-wheeler sales during April-October shrunk 16 percent to 11.45 million units, as per data shared by the Society of Indian Automobile Manufacturers.

HMSI’s volumes have nosedived 19 percent to 2.68 million units during the H1 FY20, the most by any player in the top five rankings, data showed.

Manesar plant generates nearly a fourth of Honda’s annual capacity. The closure will unlikely lead to any supply constraints for the company, given the severity in retail demand. The management, however, has not issued any official comment on how it plans to meet supply.