Labour Unrest: HONDA suffers INR 350 Cr revenue loss; Govt loses INR 100 Cr as GST

NEW DELHI/MANESAR: The November-month contractual workers strike at the Manesar-based two-wheeler plant of Honda Motorcycle & Scooter India (HMSI) has caused the company a sales revenue loss of about INR 350 Crore (3,500 million ).

The unrest also hit badly the Haryana Government as it lost an exchequer of about INR 100 Crore (1,000 million) that it could have accrued in the form of Goods & Services Tax (GST) during this period. The state levies GST at the rate of 28 percent on each vehicle sold.

Though almost all the permanent workers resumed their duties by November 30, and the single-shift production of motorcycles took off early this month at the plant, the agitation that started on November 5 not only toppled the profit figures of the company, it also caused irreparable damage of shaking the confidence of the prospective foreign investors who were considering Haryana as their investment destination.

The Manesar plant with a production capacity of 16 lakh vehicles annually and 5,500 daily, it missed out on the production of about 60,000 two-wheelers during the agitation period.

With each 2-wheeler (motorcycle/scooter) selling at about Rs. 60,000 on average, the accumulated sales revenue of the company could have been about Rs. 350 crores. And the GST which is levied at 28 percent comes to about INR 98 Crore, the government missed out on.

Even though the Manesar plant has started production but it is well below its daily capacity coupled with the reasons of market slowdown that has affected the overall automobile sector for the last few months.

Even though, the HMSI management attempted hard to resume production with the help of its permanent workers the very next day of the strike on Nov 6 but the workers Union intervened and stopped the production forcing the permanent workers to leave the plant.

Also read: Its Business as Usual at HMSI: Manesar plant starts producing up to 1000 two-wheelers daily

According to company sources, the management laments state government machinery’s lethargic attitude in supporting it. The company had to resort to the court order and ensuing police assistance to evict the agitating contractual workers who had laid siege of the plant for 13 days between November 5 and 18.

The lethargic stance of the state government machinery rather came handy for the unscrupulous elements, who sabotaged production, arm-twisted and blackmailed the management.

However, the Haryana chief minister Manohar Lal Khattar has been issuing statements promising support to HMSI, and off late meeting of Honda’s top management took place with the CM, deputy CM and top labour and industry department sleuths in Chandigarh on Tuesday.

Today on Friday, the Manesar’s apex industry association IMT Industry Association and Panchayats of over a dozen villages surrounding the HONDA plant have called a meeting in front of the plant gates to register their protest against the agitating workers who continue to stage a sit-in outside the plant.