Bosch Limited, the publicly-held Indian subsidiary of German automotive parts supplier Bosch, late on Thursday night said it was facing a strike at its Bangalore plant which employs 2,500 people.
Bosch Limited is the flagship company of Bosch in India and has sales of around Rs 7,000 crore and is a major supplier to almost all automotive companies in India.
According to a statement from Bosch India, the employees' union of Bosch Limited — MEA (MICO Employee’s Association) declared a ‘Tool Down’ strike at the Bosch Bangalore Plant on September 28, 2011, beginning with the first shift of production. The company has termed the strike illegal. The loss per day due to the strike is around Rs 5 crore a day.
This is the second disturbance for Bosch Ltd within six months. In March this year, production was affected at the plant for a couple of days over the demand for a wage increase, an issue which was settled amicably after Labour Commissioner intervened. In March 2010, around 4,000 employees of Bosch went on strike for a protracted period over demands for higher wages and medical support and the company is estimated to have lost nearly Rs 1,000 crore.
According to Bosch, to cut costs to keep its prices at competitive levels, the Bosch Bangalore Plant Management has taken a decision to outsource certain non-core manufacturing and support processes, is a normal industry practice being followed by Bosch for many years. This decision was taken after monthly meetings with its labour union – MEA.
Though the original plan would have resulted in the re-deployment of about 140 workers, it has now been scaled down due to the current slowdown. This year only about 40 workers have been re-deployed. Despite deliberations on the topic, the union has decided to protest the initiative without an advance notice (mandatory as per labour laws) through a “Tool Down” strike.
The outsourcing has not resulted in any job loss whatsoever and is a common practice followed by Bosch Limited and the industry as part of their modernisation to maintain a competitive edge. In fact a settlement to formalise modernisation, automation, ancillarisation and outsourcing was first signed between Bosch management and the union way back on October 14, 1992. In the past nearly 1,000 workmen have been re-trained and re-deployed within the Bosch Bangalore plant over the years with consequential benefits of increment and promotion.
The management has further assured fair and long term benefits to redeployed associates and asked them not to get misguided by external influences. “The Bosch Management is in constant touch with the union and relevant authorities to restore normalcy at the earliest without any further loss of production and disruption of supplies to customers," the statement from Bosch added.
The union members of Bosch who are part of this strike could not be reached for comments.
In India, Bosch set up its manufacturing operation in 1953 which has grown over the years to include 13 manufacturing sites and four development centres. Bosch Group in India employs over 25,000 associates. It generated consolidated revenues of over Rs 9,270 crore in 2010.
Bosch' stock lost little more than 2 per cent on NSE and closed at Rs 6,977 per equity share.