Case study on maruthi Sujuki India Ltd Employees

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Case study on Maruthi Sujuki India Ltd Employees Strike:

Case study on Maruthi Sujuki India Ltd Employees Strike Earlier, on June 4, workers at the plant had gone on a 13-day-long strike demanding the recognition of a new union, the Maruti Suzuki Employees Union (MSEU).

Introduction: Differences in salary pay:

Introduction: Differences in salary pay In the Gurgaon plant the salary of skilled workers adds to 30,000 – 40,000 Rs including the overtime and incentives, whereas the skilled labourers at Manesar get only around 13,000 to 17,000 Rs.

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From 4th to 17th of June 2011 around 2,000 young workers engaged in a wildcat sit-down strike at Maruti Suzuki factory in Manesar . The two Maruti assembly plants coordinate hundreds of local supplying factories [2], the Manesar plant dominates a new industrial area of major importance.

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It was a hard strike. The workers gave no notice to management, they stopped production completely and around 2,000 workers stayed inside the factory for nearly two weeks. The strike ‘postponed’ the production of 13,200 cars and caused a loss of about 6 billion Rs. (133 million USD / 100 million Euro). Maruti Suzuki’s June sales figures dropped by 23 per cent, the sharpest fall in two and a half years.

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Workers continued the strike despite the police stationed within the factory premises and despite strike having been officially declared illegal by Haryana government on 10th of June. The strike stopped production at around 200 local supplying factories, but no active connections were established between Maruti workers and the wider work-force in the territory.

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The main reasons for the defeat of the strike as follows: workers raised direct demands, but early on these demands were ‘integrated’ in the workers’ hope that by formal recognition of an independent union their material situation would improve. An attack both by management and state, cutting of electricity, isolation of workers by army of security guards, declaring the strike formerly illegal and last but not least by sacking the 11 ‘leaders’; the main unions then offered ‘support’ and at the same time focussed the struggle on the question of ‘taking back the leaders’ and ‘workers’ rights’ for representation.

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The fate of the strike was handed over to the ‘negotiating forces’. It is inexpert to repeat the phrase of ‘unfaithfulness’ of the main unions. It evades the question of what gives them the power to betray in the first place. Haryana state sources a fair chunk of tax revenue from Maruti Suzuki. In 2010 the company paid around 13 billion Rs. tax to the regional state.

The Working Conditions:

The Working Conditions There are around 3,500 to 4,000 workers employed in the factory, but their status differs significantly. Around 900 to 1,300 workers are permanent workers, around 800 to 1,000 trainees, around 400 apprentices and around 1,000 to 1,200 ‘temporary’ workers hired through contractors.

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Permanent workers at Manesar compared their wages to the wages of permanent workers at nearby Honda, Hero Honda or Maruti Gurgaon plant and voiced anger about the fact that they earn only half as much. The production capacity of Maruti has gone up from 10 lakh units in 2009-10 to 12.7 lakh units in 2010-11, but our salary has not gone up at all. Where is the incentive for hard work?”

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If a worker is few minutes late, then his half day salary is cut. If a worker takes one day leave, he looses about 1,500 Rs to 2,000 Rs as salary cut in various forms of incentives and allowances. If a worker takes two day leave, he almost looses all the incentives. These conditions form the background of the strike, they form the background of the general situation of workers in Gurgaon and beyond.

Development of the Strike:

Development of the Strike The company knew that trouble was brewing, they knew that some workers planned on registering a separate union and the company had already prepared legal documents for a possible expulsion of workers from the premises. Maruti Suzuki management tried to back a single union, the Maruti Suzuki Kamgar Union, for both Gurgaon and Manesar plant. This union had been set-up by forces close to management after the lock-out at Gurgaon plant in 2000/2001.

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“On 3rd of June, eleven leaders of the workers went to Chandigarh to meet the Labour Department to complete the formalities regarding registration of our union on June 3, 2011. On the morning of that day, the labour department officials faxed the news of our application to the management. On the morning of June 4, 2011, through struggle, we were able to retrieve some of the blank signed papers from the management. By the afternoon, it became clear that the management was using all kind of tricks to break our unity. In such circumstances, we were forced to go on flash tool down strike from the afternoon of June 4, 2011.”

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On the 4th of June after the change between morning and late shift around 2,000 workers stop work and remain in factory. Later on, the C-shift would not be refused entry by management and these workers largely remained outside the factory. During this initial stage, workers raised various issues and demands: low wages, incentive cuts, few breaks. The workers have demanded that the temporary workers should be given preference for permanent posts in new departments, which the company is currently building on the premises.

Management reaction :

Management reaction On 5th and 6th of June management sealed the gates and placed a row of security guards in front of them in order to prevent exchange between workers inside and outside, between workers and supporters and media. Management also restricted water, food, electricity and toilet access. Only after a demonstration outside the gate on 6th of June, the food supply through family and friends was permitted again. Eleven workers were officially dismissed on the 6th of June. Police was deployed both inside and outside the premises.

Entrance of mediators into issue:

Entrance of mediators into issue On the 8th of June the main unions AITUC, CITU, HMS, INTUC, UTUC formed a ‘joint action committee’ to ‘support’ the strike. Although this committee dominated by AITUC had no formal link with neither the Maruti workers nor the new Maruti union in formation, it became the main broker and spokesperson of the strike. Often quoted ‘representatives’ were union leaders from Honda HMSI, Hero Honda Dharuhera and Rico Auto.

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On the 9th of June this action committee mobilised “workers of 50 to 60 factories in Gurgaon ”, around 1,000 to 2,000 union members gathered in front of the gates. Sachdeva , secretary, AITUC, said, “As we are a major union in this area, it’s our prime responsibility to support any cause that involves the rights of our affiliated workers. 10th of June the over-all pressure on the striking workers increased and pushed them further into the arms of the main unions.

State government supported MSIL:

State government supported MSIL “The Haryana government has, under the provisions of the Industrial Depute Act, 1947, referred the matter of ongoing strike in Maruti Suzuki Udyog Ltd, Manesar , by the workers to the competent labour court and has also passed the orders prohibiting the continuance of the strike in the industrial unit,” Minister of State for Labour and Employment Shiv Charan Lal Sharma said in a statement. The strike was officially called ‘illegal’.

Strike call off:

Strike call off On the 16th of June Maruti management told the media that it would try to ‘revive’ production lines in the Gurgaon plant in case the strike dragged on for longer – unnecessarily so, because a day later, on 17th of June, the dispute was settled. The workers were represented by leader of the proposed new union Maruti Suzuki Employees Union Shiv Kumar and national secretary of AITUC Sachdev . “The company has now agreed that we would not be asked to sign the paper. Also, the fact that Maruti took back the 11 workers shows that our demands were met,” said Shiv Kumar.

Strike again:

Strike again July 28, 2011  | 17:05 , Just over a month after they called off a 13-day-long stir that resulted in a loss of about Rs 630 crore , workers at Maruti Suzuki India's Manesar plant went on strike again on Thursday afternoon. The workers resorted to a strike when five of them were suspended for "allegedly assaulting a supervisor" on Wednesday.

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Workers of Suzuki Powertrain India Ltd and Suzuki Motorcycle India Pvt Ltd, located in the Gurgaon-Manesar industrial belt, declared a strike at 3-45 p.m on Wednesday. Workers from Suzuki Castings — a part of Suzuki Powertrain India Ltd — affiliated to the Suzuki Powertrain India Employees' Union also joined the strike. On Tuesday MSI management dismissed five more workers “on charges of attacking on three supervisors and a worker last Friday” and hired 100 strike breakers to replace workers who have refused to sign the ‘good conduct bond’.

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Consequences: Haryana Labour Commissioner Satwanti Ahlawat declared the government’s support for the company, saying: “Whatever the bond that the management (MSI) is asking its workers to sign is as per rule and workers will have to sign it.” Isolated by the AITUC bureaucracy and under pressure from the employers, over 100 locked-out workers have signed the good conduct bond.

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October 13, 2011 Haryana government on  declared strike by workers at Maruti -Suzuki's Manesar plant as illegal. The strike on Thursday entered seventh day as workers continue to demand that the management take back all suspended and casual employees. Suzuki India Ltd. has incurred a revenue loss of 15 billion rupees ($306.7 million) since Aug. 29 due to labor woes at one of its factories that have severely impacted vehicle output at the country's largest car maker by sales.


Negotiations The Haryana government signed separate pacts with MSI and its arms — Suzuki Powertrain India Ltd (SPIL) and Suzuki Motorcycle India Pvt Ltd (SMIPL) and their respective workers' bodies to end the stir. Haryana government-brokered negotiations between Maruti Suzuki India management and its workers to end the standoff at MSI’s Manesar plant failed today.

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Haryana Minister for Labour and Employment Shiv Charan Lal Sharma held talks with the company’s management and workers of the Manesar plant — along with representatives of MSI’s recognised union Maruti Udyog Kamgar Union (MUKU) — through the day but an agreement proved elusive. “The workers were apologetic about the production loss that MSI has suffered and also about yesterday’s violent incident, but they are insisting that the dismissed and suspended colleagues must be taken back,” Sharma said.


Conclusion In response to the workers request for transport, the company agreed to provide bus services in line with shift timings. To address the concerns of the Manesar workers, the company has agreed to set up a ‘grievance redressal committee’. The committee will have representatives from the management and the workers. A labour officer from the state government will be a permanent invitee to it and review its proceedings. Maruti Suzuki has also agreed to the formation of a ‘ labour welfare committee’ to promote good relations between the management and the workers. The committee will comprise members of the management and the workers.



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