Riot hit Indian car maker restarts production

Featured - August 17th, 2012
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Maruti Suzuki, India’s largest car maker, is getting back on track after a deadly riot wrecked the factory and cut production of about 550,000 vehicles a year.

The July 18 clash underscores India’s labor problems. Companies are opting to hire contractors for cheap labor instead of permanent workers. The Maruti Suzuki Workers Union (MSWU) said they were paid less than permanent workers for doing the same skilled work. Maruti laid off 500 workers over the riot which cost the car manufacturer about $256 million in losses, according to a Reuters estimate.

Analysts said that the company has been losing about $15 million a day since it shut down a month ago. Maruti chairman, R.C. Bhargava, announced that the company will restart production with 300 workers beginning August 21. “The company will not employ contract workers in its production line anymore,” Bhargava told a news conference.