LG strike to hurt production as festival season nears

LG posted Rs 13,000 crore in sales in India in 2014-15

Labour unrest at LG’s plant in Greater Noida in Uttar Pradesh might hurt the company’s production of large home appliances. Hundreds of permanent and contract workers are agitating near the plant since Monday. The majority of the plant’s 2,000-odd workers have joined the strike.

The plant produces 8,000 refrigerators, 5,000 washing machines and 700,0000 compressors a day, apart from microwave ovens. The 19-year plant is LG’s largest in the country. The other plant near Pune produces televisions, air conditioners and smartphones.

LG posted Rs 13,000 crore in sales in India during 2014-15.

If production was not restored within a few weeks, the South Korean consumer durables major could face a shortage of air conditioners, industry sources said.

As the monsoon has reached all parts of the country and is expected to be normal this year, companies are expecting higher festival sales this year during the season that starts from mid-September.

This is not the first time a major consumer durables company has faced labour unrest. In 2014, Bosch had to incur a Rs 176-crore loss due to unrest in its Bengaluru plant. Voltas faced a similar problem in 2011 when a few thousand workers went on strike.

“All our production lines are functioning. There is only a partial impact,” LG said.

According to Manoj Kumar Chaubey, president of the LG Electronics Employees Union, 850 permanent workers at the plant are on strike. “Around 1,200 contract workers have also stopped working. Production is shut,” he said.

The union went on strike on Monday when 11 permanent workers were evicted from the premises without notice. “We offer an attractive compensation package that matches prevalent wages across the industry. There are ongoing efforts along with the district administration to sort this out,” LG said on Wednesday.