Maruti Suzuki’s Industrial Relations Issue – 2012

Done by Nighesh and Anupriya

About Maruti – In a glance

Maruti Udyog Limited was established in February 1981, though the actual production commenced only in 1983. It started with Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India. Its only competitors were Hindusthan ambassador and Premier Padmini. Originally, 74% of the company was owned by the Indian Government, and 26% by Suzuki of Japan As of May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.

 Maruti Suzuki India Limited commonly referred to as Maruti and formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki.

In India's closed market, Maruti received the right to import 40,000 fully built-up Suzuki’s in the first two years, and even after that the early goal was to use only 33% indigenous parts. This upset the local manufacturers considerably.

 Maruti Udyog Limited experienced problems with its labour force.

 In 1997, there was a change in ownership, and Maruti became predominantly government controlled. Shortly Conflict between the United Front Government and Suzuki started.

In 2000, a major industrial relations issue began and employees of Maruti went on an indefinite strike, demanding among other things, major revisions to their wages, incentives and pensions.

Employees used slowdown in October 2000, to press a revision to their incentives and pensions. The management refused union demands citing increased competition and lower margins.

About industrial relations

About Manesar Violence

On 18th July 2012, Maruti’s manufacturing plant in Manesar (Haryana) was hit by violence as a group of factory workers, they attacked supervisors, two Japanese expatriates and started a fire that killed a company official.

Company's General Manager of Human Resources Mr Awanish Kumar Dev was charred to death.

The violent mob also injured nine policemen. According to the Maruti Suzuki Workers Union a

supervisor had abused and made discriminatory comments to a low-caste worker.

 The supervisor alleged was found to belong to a tribal heritage and outside of Hindu caste system

Maruti said the unrest began, not over wage discussions, but after the workers' union demanded the reinstatement of a worker who had been suspended for beating a supervisor.

What made workers so vibrant?

Their demands was not fulfilled for a longer period.( A hike in Basic salary, CA,LA)

Supervisor have abused and made discriminatory comments to a low-caste worker.

The worker’s union demanded the reinstatement of a worker who had been suspended for beating a supervisor.

Workers claim harsh working conditions and extensive hiring of low-paid contract workers which are paid about $126 a month, about half the minimum wage of permanent employees.

 Company executives denied harsh conditions and claim they hired entry-level workers on contracts and made them permanent as they gained experience company.

Effects of the issue

This incident costed Maruti one of its HR manager’s life.

This was the crucial issue which company ever had to deal with.

The company had to dismiss 500 workers( accused of causing the violence )

They re-opened the plant on 21 August (saying it would produce 150 vehicles on the first day, less than 10% of its capacity.)

The shutdown costed, company -1 billion rupees ($18 million) a day and costing the company market share.

Thankyou