Vendors' strike hits Hero MotoCorp's Haridwar unit

Permanent workers of two critical component makers that feed two-wheeler manufacturer Hero MotoCorp's biggest plant at Haridwar have been on strike for the past two weeks, but the company claims this has not impacted production.

Persons familiar with the matter told ET that 1,200 permanent workers of Satyam Auto, which makes plastic parts and two-wheeler chassis, and Rockman Industries, which supplies metal casting for engine and gears among other components, have been on strike to press for higher wages and the right to form workers' unions.

According to rules in the state, at least half of the workforce must be composed of permanent employees. Such employees at the two companies are demanding parity with workers in similar facilities in other states. The temporary workers have not joined the stir.

The component makers, owned by close relatives of Hero MotoCorp's promoter, are located in a 275-acre plot where more than 100 ancillaries churn out different components for the Haridwar plant. This plant churns out more than two million units a year, including the bestselling Splendor and Passion bikes.

"There has been no impact on our production due to the labour issue at one of our ancillaries' factories," said a senior executive of Hero Motocorp, the world's leading two-wheeler maker which reported record sales of 6.2 million two-wheelers in 2011-12.

While executives at the component makers refused to comment, major trade unions such as the All India Trade Union Congress and Hind Mazdoor Sabha said the agitating workers had their full support.

"Most of the employees in this largest industrial cluster of the state are not getting reasonable remunerations," All India Trade Union Congress national secretary DL Sachdev said, adding that the union was planning to meet Uttarakhand chief minister in this regard. "The protest may spread to other units and we expect the state labour department to come up with new wages to find a long-term solution," he said.

The industrial cluster at Haridwar, promoted by the State Infrastructure and Industrial Development Corporation of Uttarakhand, is a tax-free zone that allows excise and income tax benefits for local manufacturing.
According to the state industrial department, this has attracted about 850 companies to the cluster providing employment to more than 70,000 people. Fast-moving consumer goods firms Hindustan Unilever and ITC, capital equipment maker Bharat Heavy Electricals, battery manufacturer Eveready and luggage manufacturer VIP have set up large manufacturing facilities here over the past decade.