GURGAON: As workers and the Hero MotoCorp management struggle to reach a middleground, the Gurgaon-Manesar cluster is closely watching the outcome of wage discussions between the workers' union and the management at Hero Motocorp. How the talks conclude, will have implications on the entire industrial belt.


Companies in the region have expressed fears of a 'Faridabad-like scenario' that will make the region a high-wages island. The workers' demands, if met, will catapult their average cost-to-the-company (CTC) to a range of Rs 60,000-65,000 per month from the current level of Rs 47,000-50,000, which automotive players in the region say will take the sheen off what has so far been touted as the global advantage of low-cost manufacturing. The Gurgaon-Manesar belt alone churns out almost half of the total cars and two-wheelers produced in the country and companies fear that any abnormal rise in wages could prove detrimental to India's auto industry.

There are several small and big component manufacturers spread out in the Gurgaon-Manesar industrial belt. The supply-chain base in this region is the lifeline of large auto companies such as Maruti Suzuki, Hero Moto Corp and Honda Motorcycles & Scooters India (HMSI). Scores of industries, including original equipment manufacturers (OEMs), component suppliers and other ancillary units, spread out in the sprawling Gurgaon-Manesar belt are therefore keenly following the ongoing wage negotiations between Hero MotoCorp and its union.