BW Communities

Maruti's Labour Pain

Anup Jayaram Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[The gates at India's leading carmaker Maruti Suzuki India's Manesar plant are shut. The campus is teeming with hundreds of policemen. That's a fall-out of the violence that gripped the plant after workers turned violent, attacked executives and burnt cars and parts of the office on Wednesday. In the fracas, Awanish Kumar Dev, general manager (HR) was burnt to death. At least 88 other executives have been injured. Close to a 100 workers have been arrested post the arson. Ei Mochizuki, a Tokyo-based spokesman for Suzuki Motor Corp, which controls Maruti Suzuki, told Reuters two Japanese employees had been hospitalised after the unrest. The provocation was the suspension of a worker, who had ostensibly beaten a supervisor. The workers' union demanded his reinstatement. According to a statement issue by Maruti Suzuki, "the first act of violence by the mob was to forcibly shut the main gate and prevent managers from leaving the premises after working hours. Thereafter, armed with iron rods and door beams of cars, the mob spread out in groups in the factory area and targeted supervisors, managers and executives." They also reportedly ransacked offices, damaged property and finally, set the offices on fire.  The statement points out that the office facilities have been burnt beyond repair. However, the assembly line has not been hit. Therefore, it is possible to restart production at the plant that makes the Swift, A-Star and SX4 models once the situation is under control. The plant can produce close to 1,500 cars a day. The standoff between the workers and management at Maruti Suzuki is nothing new. After three strikes totaling 45 days in 2011, this is the first flush of worker activism this year. During the last fiscal, Maruti recorded a 28.6 per cent decline in net profits from Rs 2288.7 crore (in 2010-11) to Rs 1m635.1 crore (2011-12). Car production during the year also fell from 1.27 million to 1.13 million. Labour unrest cost the company more than Rs 2,500 crore in lost production during 2011. Shares in Maruti, which saw its sales fall 11 per cent in the fiscal year to March, partly due to the protracted labour strikes, fell 8.9 per cent on Thursday, their biggest daily per centage drop since July 26, 2010. Suzuki's shares closed down 3.8 per cent in Tokyo to their lowest price since February 2009. Maruti Suzuki is not the only automobile company to face labour problems in India. Others including Honda, Hyundai, Ford and General Motors have faced labour problems from time to time, but in the case of Maruti Suzuki it is quite a regular feature. Meanwhile, Maruti has announced plans to set up a Rs 4,000-crore plant in Gujarat. That could be a means to reduce its dependence on Haryana, where labour problems have been on the rise. The Maruti Suzuki statement goes on to add that "it is an orchestrated act of mob violence at a time when operations had been normal over the past many months." The violence at the plant has been condemned by industry. "Assocham expresses its anguish and strongly condemns the violence at Maruti Suzuki premises," says secretary general D S Rawat. He said that India could not afford any disruption in economic activity when industrial growth was declining. That could be critical in the coming months for both the carmaker and its workers.