Maruti Suzuki, India's largest car maker, said on Thursday it would restart production at its Manesar factory on August 21, about a month after it shut the plant following a riot in which a manager was killed and more than 100 people injured.
The 550,000 vehicles-a-year factory in Manesar, where the unit of Japan's Suzuki Motor Corp makes its best-selling Swift hatchback, has been idle since the July 18 clash between workers and management.
Maruti said it w ould start producing 150 cars a day from Tuesday with 300 workers.
The Haryana state government will deploy 500 armed police in the area to ensure safety, the chairman of the company, R.C. Bhargava, told a news conference, adding that the company had created its own force of 100 guards in addition to existing security.
Labour troubles at Maruti have put the spotlight on the country's decades-old labour laws.
Other foreign car makers, such as Hyundai and Honda <7267.T>, have seen labour unrest at their Indian plants in recent years, and industry groups have renewed calls for the government to overhaul laws they say tie their hands.
Maruti has been losing about $15 million a day since stopping production, according to analyst estimates. A one-month shutdown would cut parent Suzuki's operating profit by about 6 billion yen, equal to 5 percent of the Japanese car maker's forecast for the year, according to analysts.
India's labour laws make it difficult for big companies to fire permanent workers so instead, companies hire contractors, to the anger of the unions. Contractors at the Manesar factory said they were paid much less than permanent workers for doing the same skilled work.
After last month's violence, police initially sought to detain all 2,500 workers who may have been present in the plant at the time. Most of those workers fled.
Police now say only a few hundred workers may have been involved in the riot, but Maruti could face an uphill task finding enough workers to operate the plant after the violence.
The trouble flared after one employee faced disciplinary action. Company officials say workers attacked senior management during discussions, while the union said its representatives were attacked first.
The company, which will start hiring additional employees from September 2, has sacked 500 permanent workers based on initial investigations, Bhargava said.
Maruti lost $500 million in production last year because of labour unrest.
Maruti shares, valued at $6.2 billion, ended down about 1 percent on Thursday, underperforming a flat market. The stock has lost 4.4 percent since the riot.
(Editing by Robert Birsel)
