Hero workers shift to slow gear, production could be hit by 30%

Hero moto corp
With talks for a wage revision not making headway, workers at Hero MotoCorp's Gurgaon plant on Wednesday went into slow mode at one of the plant's three assembly lines that makes scooters.

Approximately 2,200 scooters roll off this assembly line every day across two shifts and production could be hit by about 30% or 600-700 units of the Pleasure and Maestro scooter models.

In all, the three assembly lines at Gurgaon produce about 7,000 two-wheelers every day.

Discussions between the workers and the Hero management have been on since September 2012.

The Hero management has reportedly offered workers an increase of R7,500 per month to match a similar hike given at its nearby Dharuhera plant in 2011.

However workers who belong to the Hero MotoCorp Workers' Union (HMCWU) are demanding a wage increase of R14,000-15,000 per month. The average salary is currently R46,000 per month.

"There have been no talks with the management today and we plan to keep the slowdown at the same level on Thursday as well. We may resort to slowing down production further if our meeting with the management on Friday is not successful. This is a peaceful protest and we have started small as we want the management to understand that we are serious about our wage demands," said a union member.

The meeting on Friday between the union and the management is expected to be held in the presence of the Gurgaon additional labour commissioner.

When contacted, a Hero MotoCorp spokesperson alleged that the workers have tampered with production equipment, marginally impacting production.

"Even as we are engaged in talks with the union of our Gurgaon plant to reach an amicable solution, they have resorted to tampering with the settings of production equipment, marginally compromising our output for the day. While we are indeed confident of making up this marginal shortfall, this kind of immature and irresponsible activity by the union does not reflect well on the conducive atmosphere in which we have been striving to reach a reasonable, sustainable and sensible settlement in a patient manner."

The workers seem to have struck Hero where it hurts the most. Demand for its Pleasure and Maestro scooters is at an all-time high. Hero's scooter sales in April-December FY13 have grown 32% year-on-year to 3.92 lakh units while bike sales dipped in the same period by 4% to 40 lakh.

The union member added that to slow production, workers decided to actually follow the official 'technical guidelines' that in fact take more time. Normally, they would bypass certain systems and norms in order to speed up output. The Gurgaon plant rolls out a two-wheeler every 16 seconds.

He added, "Our welfare measures and benefits have been the benchmark in the industry, so much so that some of our workers are paid better than the graduates from some of the reputed engineering institutes in the country. We will, therefore, continue to engage with our workers and the labour department in reaching a prudent and well-deliberated decision which will be in the best interest of all our workers as well as for the larger good of the industrial environment in the region."

If the slowdown continues, the per-day revenue loss for Hero MotoCorp will be Rs 2.5-3 crore.

This is the first time that the workers have actually slowed production after over 50 meetings relating to the wage deal since September last year. Till now, HMCWU had resorted to a silent protest by wearing black bands and boycotting company-provided snacks. Being the benchmark in the Gurgaon-Manesar industrial belt, HMCWU wants the wage hike to match the increase that Maruti Suzuki and Honda Motorcycle & Scooters announced for its workers recently.

The Hero MotoCorp share closed up 1.02% on the BSE at Rs 1,779.20 on Wednesday.

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