Labour Trouble at Omax Auto, Component Supplies to Hero Hit

New Delhi: Labour unrest at two factories of auto component firm Omax Autos at Dharuhera in Haryana has led to disruption of supplies to various manufacturers, including two-wheeler manufacturer Hero MotoCorp.

The Gurgaon-based company, which supplies over 90 per cent of the components it manufactures to Hero MotoCorp, has alleged that its workers are slowing down production to demand increase in salaries and confirmation of jobs.

"Since last week, the workers have deliberately slowed down the production at our two factories in Dharuhera. It has led to over 35-40 per cent decline in daily dispatches. Supplies to major customers like Hero Moto Corp is also hit," Omax Autos AVP-operations and plant head Dharuhera Suresh Sharma told PTI.

He said Omax Autos supplied components worth Rs 1.1 crore per day earlier, which has now come down to around Rs 80 lakh per day to Hero MotoCorp since the workers started slowing down production.

The company supplies components such as sprockets and tubular parts to the Hero MotoCorp.

Comments from Hero MotoCorp could not be immediately obtained. Other customers of the Omax include Yamaha, Piaggio and Honda Motorcycle & Scooter India.

Asked about the reasons for labour unrest in the company's two plants, Mr Sharma said, "We are negotiating with worker union for Long term Settlement (LTS) which happens every three years. This settlement is due from April 1, 2014. Due to differences during the negotiations, the workers have now resorted to slowdown in production."

The workers are demanding that the new settlement should be like the previous years but because the company suffered loss last year it is unable to meet such demands, he added.

The company had posted a consolidated net loss of Rs 5.5 crore for the fiscal year ended March 31, 2014. Revenues stood at Rs 984.71 crore.

Established in 1985, the company specialises in sheet metal components, tubular components and machined components.