Honda Motorcycles and Scooters India Private Limited on Monday indefinitely shut operations at its plant in Manesar in Haryana because of an ongoing strike by contractual workers, Hindustan Times reported.

Production at the plant has been hit since November 5, when more than 1,500 workers went on strike to protest against the retrenchment of around 650 colleagues. The move to the shut down the plant came after talks between the management and the union leaders failed to find a solution.

A notice issued by the company management to the employees said: “Due to the prevailing IR [industrial relations] situation, plant operations have been suspended and the plant will remain closed till further intimation.”

The protesting workers demanded that those retrenched be either called back or to be paid a compensation of Rs 1 lakh for each year of service.

Employees’ Union President Suresh Gaur said talks held with the management and labour department officials did not break the stalemate. “A representative from the management didn’t make it to the meeting,” he said. “We expect that a solution can be reached on Tuesday.”

An unidentified company spokesperson confirmed that the three assembly lines – two for motorcycles and one for scooters – will remain shut till further intimation.

The workers’ union said Honda’s Manesar plant employed around 1,900 permanent workers and 2,500 contractual workers. Gaur alleged that the termination of the workers was illegal and said they were employed with the company for many years.

In a press statement last week, Honda had said the workers were relieved due to demand fluctuations and production adjustment. In August, as per figures released by the company, about 700 contract workers were laid off because of a production cut.

The automobile industry has been in crisis, with 15,000 jobs lost in the previous quarter and hundreds of dealerships closed in the last year. The decline in consumer confidence, coupled with a crisis in non-banking finance companies, have caused a steep fall in sales.

Honda officials claimed the job losses were a consequence of the downturn.

Passenger vehicle sales rose for the first time in 12 months in October, albeit a marginal 0.28%, data from the Society of Indian Automobile Manufacturers said on Monday. The slowdown so far was one of the worst to have disrupted the automobile industry since the collection of data on vehicle sales started in 1997.