First it was Honda in China, now it’s Hyundai in India. The Korean carmaker, No.2 in India after Maruti Suzuki, is the latest to be hit by worker strikes. According to a Hyundai press statement, 150 workers occupied the factory on Monday, forcing a three-day halt to production that has resulted in a loss of 4,000 cars being made and 1.3 billion rupees ($27.7 million).
This is the fourth strike since 2008 at Hyundai’s two adjacent plants in Sriperumbedur, outside the growing auto hub of Chennai, in the southern state of Tamil Nadu. But here, it isn’t about money.
The strike was to demand the reinstatement of 67 workers who were involved in violent protests in July 2009. Company spokesman Rajiv Mitra said that they damaged company property and assaulted guards and will not be rehired. “If you take them back, it sets a strong precedent: Anyone can do anything and not get punished.”
The strike has since ended after government intervention. Hyundai will take back 35 of the 67 rogue employees. The others will still have to face legal charges.
Hyundai employs about 10,000 in Sriperumbedur directly and its suppliers hire an additional 40,000 people. Last year Hyundai produced 560,000 cars in India, which is the company’s global small car production hub. Hyundai is also India’s biggest car exporter. However, labour issues are causing Hyundai to reconsider putting all eggs into one basket, as it plans to move some production of i20 superminis from India to an existing factory in Turkey by August.
It’s a smart option, as making i20s in Turkey reduces delivery times and incurs lower taxes for the car’s main market, Europe. Last year, Hyundai exported about 50,000 i20s from India to Europe, more than half of total production for that model. However, i20s for the domestic market and for export to right hand drive markets will still be made in India. No Indians would be fired as a result of the shift, Mitra said.