Apollo Tyres declares lockout at Kerala factory

In another instance of labour unrest in the automobile sector, Apollo Tyres today announced a lockout at one of its factories, in Kerala’s Thrissur district, resulting in an estimated daily loss of Rs 3 crore. This unit constitutes a fourth of Apollo’s total daily output.

“The management has declared a lockout at the company's manufacturing facility at Perambra (Kerala) with effect from early morning of June 11, on account of labour unrest relating to long-term settlement negotiations,” the company said in a filing to the Bombay Stock Exchange (BSE).

Apollo Tyres has four factories: Two in Kerala, one in Gujarat and one at Chennai. The company mainly manufactures truck and bus cross-ply tyres (bias tyres) at Perambra. Daily production is estimated at 300 tonnes per day or 100,000 tyres a month. Since each bias truck tyre costs Rs 9,000, it is estimated the company would incur a loss of around Rs 90 crore a month or Rs 3 crore each day.

“The lockout has been announced in the wake of indiscipline among workers, as they are not agreeing to produce the contracted amount, which in turn has led to financial and material loss to the company,” Apollo Tyres said.

The unrest at Perambra was on for some time. The company had informed the BSE in April that workers there had resorted to a go-slow, as a pressure tactic for bargaining on a long-term settlement, resulting in considerable drop in production.

At the time, production had fallen to one-sixth the normal daily output. However, things improved and were back to normal until Thursday, when the workers again began a stir. This time, the company decided to announce a complete lockout.

Apollo’s shares gained 0.07 per cent on Friday, to close at Rs 68.1 after touching an intra-day high of Rs 69.3.