Workmen unions are not a good thing, at least that is what recent times have told us. In a shocking demand, workers at Bajaj Auto’s Chakan plant have gone on an indefinite strike, asking for 500 equity shares of the company at a highly discounted value of Rs. 1 per share. The current market price of Bajaj Auto in the Bombay Stock Exchange (BSE) is Rs. 1779.30/- which puts the value of 500 shares to be Rs. 8.90 lakhs. Production at the plant has been affected, which has an annual capacity to churn our 12 lakh units.
So is this demand sensible? Certainly not. How can a company allot shares at such a massive discount, even top management who have played instrumental role in the success of the company don’t get such a huge discount in employee stock option schemes. Bajaj Auto has 925 permanent workers along with 1000 temporary/contractual workers at their Chakan plant. These 925 workers are demanding shares through the union Vishwa Kalyan Kamgar Sanghatana. This puts the overall cost to fullfil the demand of the workers at Rs. 83.25 crores, a significant amount for any company. The workers are also demanding a 25% wage hike along with making contractual workers permanent employees and bringing back suspended workers.
Bajaj Auto manufactures its own motorcycles at Chakan along with producing KTM motorcycles (Duke 125, 200 and 390). It also assembles Kawasaki’s Ninja 300 and Ninja 650 at the same plant. The stoppage in production can lead to huge losses as KTM motorcycles are exported globally. Just yesterday Bajaj Auto launched the Duke 390 and this stoppage in production can lead to a huge waiting period in India as well as other countries. Hopefully the company resolves the issue quickly and commences production.