Honda's Manesar factory reopens

After the temporary closure that lasted for less than a day, the Honda Motorcycle and Scooters India's (HMSI) unit in Manesar was reopened with an estimated 1,000 people reporting to work, according to a HMSI spokesperson.

"The law and order situation around the factory had been normal and around 1,000 people reported to work. Most of these were either contract workers and people borrowed from our vendors. Around 100 of them were full-time line associates of the company," the spokesperson said.

HMSI, under normal conditions, employs close to 1,800 people of which 1,000 are permanent employees and the balance trainees.

Since the issue with the employees escalated towards the end of June, the company kept the production at 50 per cent levels with the help of temporary hands and some borrowed from vendors in the region.

Earlier, the production had dipped to 20 per cent levels against a full capacity of 2,000 units per day.

HMSI had closed its factory after lunch on Tuesday and said the shutdown was a precautionary measure to avoid any law and order problem. However, with normalcy returning in the Gurgaon region, the factory was re-opened today.

HMSI said that loss during the strife period was around Rs 100 crore. However, media reports from Japan said that the loss so far was around $27 million (around Rs 120 crore).

The HMSI labour problem, though seen by many as an isolated case of labour-management difference going out of control, raised serious questions on the future prospects of FDI flow into the country.

Heads of industrial units and prominent representatives of the government said that generalisation on the FDI flow into the country based on the HMSI case was completely baseless.

Terming the HMSI incident as an "isolated one", planning commission deputy chairman Dr Montek Singh Ahluwalia, said the labour problem at Honda Motors would not affect the FDI in the country as it is just an isolated incident. Appealing to resolve the issue at earliest, Ahluwalia said, "The labour, company and politicians should be flexible in their approach."

In fact most manufacturers in the Gurgaon-Manesar belt said that the region was still a fertile ground for investments in manufacturing as it had always been.

"The incident however brings to fore the need to discuss and debate issues regarding labour law reforms. In a liberalised environment, we have very archaic labour laws that is almost similar to the licence raj. Liberal labour laws does not mean hire and fire at will, but give manufacturers more scope for hiring temporary and contract workers," said Surindar Kapur, chairman of Sona Group, that has a strong base in the Gurgaon region.