Wednesday, 24 July 2013

Maruti Suzuki threatens to shut down Manesar plant in Gurgaon

Maruti Suzuki, India's largest carmaker has now threatened to shut down its most modern facility at Manesar in India on the prospect of paying additional INR 500 Crore for its 600 acre land. The threat is significant as Maruti makes blockbuster models like the Swift hatchback and Dzire sedan at Manesar, which is also its sole base for making diesel engines.

"...If further enhancement is granted, the (Maruti) management may have to take a decision to discontinue the plant at Manesar," said counsels P S Patwalia and Abhishek Manu Singhvi while appearing for the company before the Supreme Court.

The higher compensation was awarded by the Punjab and Haryana High Court in 2011, and this had been contested by the landowners — who wanted higher award — and Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) in the Supreme Court. While the landowners wanted the enhanced compensation amount — granted by the high court — to be sweetened further, HSIIDC had contested the higher claim.

When contacted, a spokesperson for Maruti Suzuki refused to comment. Attempts to reach top officials of the company, including chief operating officer (administration) S Y Siddiqui, did not yield any result. The 2011 order, based on which HSIIDC raised a Rs 500 crore-plus demand on Maruti, had raised the compensation amount from Rs 28.15 lakh to Rs 37.40 lakh (per acre), leading to the huge recovery notice on the country's top carmaker.

We will have to wait n watch closely over this matter while there could be some other decisions taken up as Suzuki chairman Mr. Osamu Suzuki plans to visit India tomorrow. 


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