Maruti to Restart Riot-Hit Manesar Plant on Aug. 21

Maruti Suzuki, India's largest car maker, said it would restart production at its Manesar factory on August 21, 2012 after sacking 500 workers over a deadly riot that shut the plant, costing tens of millions of dollars in lost output.

The 550,000 vehicles-a-year factory in Manesar in Haryana, where the unit of Japan's Suzuki Motor Corp makes its best-selling Swift hatchback, has been idle since the July 18 clash between workers and management.

The company will start producing 150 cars a day from Aug. 21, less than 10 percent of its average daily production before the violence in which a manager was killed and more than 100 people injured.

The resumption of production comes just in time for India's festival season, when people tend to make big-ticket purchases.

Deepak Jain, an auto analyst with the brokerage Sharekhan, estimated the company would be able to produce 300 cars daily in two weeks and about 500 in a month.

The company has seen a revenue loss of about $256 million because of the shutdown, while analysts estimate it has been losing about $15 million a day.

A one-month shutdown would cut parent Suzuki's operating profit by about 6 billion yen, equal to 5 percent of the Japanese car maker's forecast for the year, according to analysts.

Labor troubles at Maruti have put the spotlight on the country's decades-old labor laws.

Other foreign car makers, such as Hyundai and Honda, have seen labor unrest at their Indian plants in recent years, and industry groups have renewed calls for the government to overhaul laws they say tie their hands.