Hero MotoCorp to invest Rs 950 cr wage talks inconclusive

Last Updated: Mon, Jan 14, 2013 19:26 hrs

Hero MotoCorp, India’s largest two-wheeler manufacturer, will invest Rs 950 crore in Rajasthan to commission its fourth production unit, a global parts centre (GPC) and an integrated state-of-the-art research & development (R&D) facility in the state.

While the two-wheeler manufacturing unit would be set up on a 47-acre site at Neemrana at an investment of Rs 400 crore, the GPC would come up at the same location with an investment of Rs 150 crore. The manufacturing facility would have capacity to roll out 750,000 units a year.

To strengthen its R&D initiatives, the company has additionally earmarked an investment of Rs 400 crore to set up an integrated R&D centre at a 250-acre site at Kukas near Jaipur.

Hero MotoCorp, which started the work on its fourth production unit on Monday, said both the factory and the parts centre will become operational by the end of FY14. While the plant will directly provide employment to 1,000 people, the company will hire another 400 employees for the global parts centre.

Meanwhile, Hero MotoCorp has been grappling with labour disquiet at the company’s Gurgaon facility, where wage negotiations have been on for the past six months. When contacted, a senior member of the employees’ union informed, “Talks have not progressed. We are protesting peacefully within the factory by wearing black arm-bands and not taking tea. If some resolution is not arrived at over the next two-three days, we will consider further action.” The workers have been demanding a wage hike of around Rs 15,000 (at par with what offered at Honda Motorcycle & Scooter India), whereas the company’s management has made an offer marginally higher than the Rs 6,500 given in increments over a three-year period to those at the Dharuhera plant in 2011.

Hero MotoCorp’s shares were trading at Rs 1,846.35 a piece on Monday, up 0.60 per cent on close at the Bombay Stock Exchange (BSE). The BSE went up by 242.77 points (1.63 per cent) to close at 19,906.41 on Monday.

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