4th Strike Since 2008 Halts India Hyundai Production

Striking workers forced Hyundai Motor to stop all production in India on Monday, the latest in a series of union battles that have pushed the nation’s No. 2 carmaker to move some production to a factory in Turkey.

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, the company said.

Hyundai is India’s leading car exporter, having pioneered the model of making India a small car export hub which global auto majors like Ford, General Motors and Nissan are now trying to emulate.

But labor unrest is unraveling those plans for Hyundai.

Spokesman Rajiv Mitra said in an interview Monday that Hyundai plans to move European export production of its popular i20 compact from India to an existing factory in Izmit, Turkey by August.

“What triggered it is the labor problem,” he said.

Turkey has other advantages, like reduced delivery time and lower taxes for its main export market, the European Union, he added.

Last year, Hyundai exported about 50,000 i20 compacts from India to Europe, more than half its total production of the car, he said.

Mitra said i20 cars for the domestic market and for export to other countries, like Australia, will still be made in India. He said no workers in India would be fired as a result of the shift, and the company currently has no plans to move additional production out of India.

In a statement Monday, Hyundai said 150 workers had occupied the factory, forcing a halt to production that resulted in a loss of 2,200 cars worth 650 million rupees ($13.8 million).

The honorary president of the Hyundai Motor India Employees Union, A. Soundararajan, told the Times of India that 400 workers occupied the factory Sunday midnight, and another 800 gathered outside after four more workers were dismissed Sunday. All shifts have been halted since then.

The union is also pushing Hyundai to officially recognize it over an existing worker’s committee, which it maintains is controlled by management.

Under an agreement brokered by the government in July 2009, Hyundai agreed to reinstate 20 of 87 employees dismissed in the wake of violent protests.

Mitra said the remaining 67 workers had damaged company property and beaten up guards and would not be rehired.

“If you take them back, it sets a strong precedent: Anyone can do anything and not get punished,” he said.

The company and union are scheduled to meet with state labor officials Tuesday to continue talks.

“We hope we can resolve it soon,” Mitra said. “We expect the government to give us some support.”

Hyundai employs about 10,000 in Sriperumbedur directly and its suppliers employ an additional 40,000 people. Last year the company produced 560,000 cars in India.

India’s fast-growing auto sector has been roiled by other protests.

Last fall, thousands of auto-parts workers, some armed with rocks and makeshift clubs, went on strike in Haryana state’s Gurgaon, just outside the capital New Delhi.

The protests, which initially targeted better wages, spread after a worker at Rico Auto Industries, which makes gear and brake parts, was killed in the agitation.

The 45-day strike reportedly forced GM and Ford to temporarily halt production at factories in the U.S. and Canada.

ERIKA KINETZ,AP Business Writer MUMBAI, India