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Mayhem at Maruti
Introduction
On July 19 2012 Maruti Suzuki India Ltd, a subsidiary of Suzuki Corporation of
Japan and the largest car maker in the country ,made it to the headlines of all
leading newspapers and television channels ,in India ,for reasons not so desirable.
The management-labour conflict escalated to such an extent that it finally culminated
in arson, rioting and the gruesome killing of a senior manager. What happened on
July 18 was the breaking point of a communication time bomb that had been waiting
to explode since a long time.

The Issues
a) The Workforce:
The Manesar facility of the MSIL employs about 1,500 odd permanent workers and
approximately the same number of workers employed on a contractual basis.
Manesar plant draws its employees mostly from Haryana. It has about 950 regular
workers, 400 trainees, 700 contract workers and 400 apprentices. A regular worker
at Maruti could make up to Rs.25,000 per month in CTC in his first year (after three
years of traineeship). About 50% of this is in the form of performance incentives,
including an attendance reward that amounts to 18% of CTC and has become a
contentious issue in the on-going strike. Trainees make Rs. 13,000-14,000. And a
contract worker, depending on his skills, anywhere from the minimum wage ( . 4,644
in Haryana) to Rs.12,000. About 60% of Maruti workers are regular employees and
the remaining are contract workers. The minimum qualification to be a regular worker
at Maruti is class ten and an Industrial Training Institute diploma. The average age of
workers at Manesar is under 25, while that at Gurgaon is above 30. Only very few
workers at Manesar are married or have children, allowing them greater staying
power in a strike.
In Haryana, young blue-collar workers have seen dramatic changes around them.
Land prices have surged as Gurgaon has become a commercial hub. Overnight,
people have become rich and their lives have transformed simply because they
made a killing selling their land. Such changes have re-calibrated worker expectation
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who have seen their sleepy little hamlet transform into a city of high rises and malls
in a decade.
They are less tolerant and fairly aggressive in their expectations and how they want
to achieve it. Poor wage hikes and raging inflation have queered the pitch further,
resulting in an impatient, militant workforce, which believes in aggressive posturing.
Sonu Gujjar, the leader of the labour unrest at Maruti plant last year, represents that
generation. In his 20s, Gujjar organised a con-call with analysts to put forth the
workers' point of view and made headlines.
b) THE 7.5-MINUTE TEA + LOO BREAK
The strategic decision to squeeze out more cars from existing plants didnt trickle
down smoothly to the shop floor. Striking workers complain about abusive behaviour
by supervisors, which the company denies. Workers say the conditions at the
Manesar plant were too stringent, while the management says the Gurgaon plant
has operated under identical conditions for more than 25 years. In an eight-hour
work shift, workers get a 30-minute lunch break and two 7.5-minute tea breaks. In
that time the workers had to remove their safety equipment, run 150 metres to grab
their tea and snack, and then run to the toilet that is 400 metres away, and be back
in seven minutes. Workers cant leave their workstation even for a minute,
supervisors sometimes deny permission for an additional toilet break, and steep
salary cuts are affected for even a day of absence from work. The Maruti spokesman
says tea and snacks are laid out at 80 rest areas next to each work station, across
the plant. Im not saying you will see anyone strolling about during the tea break, but
it is designed to be just sufficient, he says.
c) The Union politics
The basic reason for the ongoing impasse of the last one year and its culmination in
the grisly violence this July is the demand of the young Manesar workers to have
their own representative union. They did not want the union of the Gurgaon plant --
the parent plant where Maruti began its operations in the 1980s -- to represent them
as they contended it was compromised and had failed to represent workers
interests. But the management insisted that the Gurgaon union was the true
representative of the Manesar workers
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According to some accounts, the workers first approached the Maruti Udyog Kamgar
Union (MUKU), the Gurgaon-based union recognised by the company as the union
for all Maruti workers. MUKU office bearers told their younger colleagues from
Manesar this was par for the course. This is where the divergence in accounts begin.
Demands for a separate union seem to have started towards end-2010 or early-
2011. The company says it has persuaded the Manesar workers to join the existing
union and not form a new one. The workers say the company first promised
elections to the existing union in April and officials began warning workers against
forming a new union, a charge the company denies. In May, the company
announced that elections to MUKU, with a proposed new chapter for Manesar
workers, would be held on July 18. (When this election eventually happened,
Manesar workers boycotted it, and a panel in the Gurgaon union that was seen as
backed by the management was thoroughly beaten by a rival panel.) Manesar
workers first struck work on June 4. Workers say the provocation was that company
officials were forcing workers to sign an affidavit stating they were happy to be with
the Gurgaon union and dont want a new one. The company spokesman denies this,
and says the provocation was that some workers were taking the signatures of
others for the purpose of forming a union and supervisors objected to it being done
during work hours. A day before, the workers had filed an application with the
Haryana labour department to form a new union: Maruti Suzuki Employees Union.
On June 6, the company summarily dismissed 11 workers for indiscipline and
striking work. This included the four office bearers of the proposed union. The strike
went on till June 16, when the company agreed to reinstate the dismissed workers.
At this stage, the workers were being helped by the Gurudas Dasguptaheaded All
India Trade Union Congress (AITUC), a leftist trade union.
The cautious statement masked what the strike represented for AITUC and the trade
union movement. About 400,000 workers are employed by about 1,000 companies
in the Gurgaon-Manesar-Dharuhera-Rewari auto hub. Trade unions have had a
mixed track record here. AITUC and the Hind Mazdoor Sabha (HMS) are the two
most prominent trade unions in this belt. The general perception is that AITUC, like
other Left-aligned unions, has a propensity for violence, while the HMS is more
conciliatory. It is no secret that most management see HMS as the lesser evil. In the
months prior to applying to form a union, Marutis Manesar workers had grown close
to AITUC. AITUC helped them file their application, its leaders met with state labour
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department officials along with the Maruti workers, and at one point during the strike,
Haryana chief minister Bhupinder Singh Hooda met with AITUCs Dasgupta. But
after the first strike ended on June 16, the Manesar workers, says a AITUC leader,
no longer remained in our grip. Several unions were now advising the striking
workers. Gujjar, Kumar et al, listened to everyone, but confided in none. This was an
astute move. The union at Suzuki Powertrain India, which is based in the same
Manesar campus and shares the assembly line, is affiliated to HMS, as is the union
of Suzuki Motorcycles a few kilometres away. Too much proximity towards AITUC
would have made it difficult to secure the support of these workers. Apart from HMS
and AITUC, leaders of Central Industrial Trade Union (CITU), New Trade Union
Initiative (NTUI), among others, started advising the Manesar group. After the first
strike ended, Maruti went into damage control mode. It brought in external trainers
and the spiritual organisation Brahmakumaris to organise sessions with the workers,
where they were encouraged to speak about their problems. But already damage
was done.
But the peace didnt last long, and the reasons are contested. Company officials
claim the 11 reinstated workers started flouting all shop floor norms by appointed
their own representatives at each bay and asking workers to obey their orders
instead of company supervisors and managers.
A worker at the Manesar plant on condition of anonymity said the Maruti Suzuki
Kamgar Union was dominated by workers from the Gurgaon plant and that it wasnt
really bothered about those at the Manesar factory. He added that the workers had
given the company enough notice of a strike, a claim Bhargava was quick to dismiss.
What are the consequences of such a myopic outlook? When the crisis occurred on
the morning of July 18 in the form of an altercation between a worker and a
supervisor, there was no structure in place through which a management-worker
dispute could be addressed management had eliminated the whole set of
leadership whom the workers trusted, there was no representative organisation
which could have served as go-between and this kind of vacuum of leadership,
organisation and trust set the stage for the unforgivable violence by the end of the
day. Though there was a new union registered and recognised in February this year,
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management had continued to undercut it in the same manner as before. I am not
getting here into which side is more to be blamed for the events of that particular day
all I am saying is that once the mechanisms for a dialogue were systematically
undermined, the preconditions for such an event were ever-present.

d) The Management
A foreign management ethos divorced from labour realities inflamed Manesar
ARINDAM MUKHERJEE
Since 2007, Maruti has been a fully-owned Japanese company that holds over 50
per cent of the Indian car market.
Since 2007, two important changes happened at Maruti. One, Shinzo Nakanishi, the
current MD of Maruti Suzuki, took over the reins from Jagdish Khattar. RC Bhargava,
who was a director, was made chairman. Two, Maruti and the India market are also
becoming increasingly important for Suzuki Motors as Maruti contributed more than
half of the parent's profits.
As Maruti's contribution to Suzuki increased, the latter's tendency to control India
operations has increased. It does have many senior Indian executives who have
been 'lifers' at Maruti. But insiders who will speak on the condition of anonymity say
the Japanese voice counts and often tends to dominate crucial decisions. Culturally,
Indians and Japanese are far apart. Their sense of discipline, punctuality, employee
connect too are very different. Some loss of connect with Indians is expected.
The first is the fabled Japanese management. Not too long ago it was assumed that
the Japanese have all the wisdom in manufacturing and management and if only we
could learn from them we would find the answer to our woes. Business schools
worldwide teach special courses on Japanese management and such offerings are
highly subscribed; books on the subject are bestsellers. But descriptions over the
last one year of operations at Manesar demonstrate that essentially the Japanese
trick to success is not so different from the rest: the principle followed is to get more
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work out of a worker, while at the same time paying less. Accounts of Manesar tell of
workers being forced to steal rest breaks, docking of pay for minor infringements,
almost no paid holidays, an army of poorly-paid temps etc. Here is an account of a
typical workday at Maruti Manesar :
You catch a bus at 5 am for the factory. Arriving a second late to punch in
your card means a pay cut, but you cant leave the premises once youve
entered. At 6.30 am, you exercise and supervisors give you feedback on your
previous output. Start work at 7 sharp. Everyone does his one task
assembling, welding, fixing for a minimum of 8 continuous hours. A car
rolls off the line every 38 seconds, which means you cant budge from your
position, ever. You get two breathless breaks during the day. At 9 am, a 7-
minute break to drink tea or go to the loo, or both. After a while you might, like
many of your friends here, end up taking your hot tea and kachori to the
bathroom with you. Then a lunchbreak of 30 minutes, in which you walk about
a half-kilometre to the canteen, wait in line with everyone, eat and walk back.
Returning even a minute late from any break, or leaving the assembly line for
any reason even for a minute, means half a days pay cut.
Overtime is a compulsion whenever the company needs it and the privilege of paid
leave is a fantasy -- Rs 1,500 is deducted for one days leave (even when you
intimate in advance) from a maximum possible monthly pay of Rs 16,000 and five
days leave for any contingency reduces it to the base salary of Rs 8,000. Out of a
workforce of 2,500, 40% are on contracts, casual or apprentice (but do similar work
as permanents) and their take-home is around Rs 6,000, with the threat of
comparable deductions as regular workers looming all the time and no job security.
Another worker states,
The problem is the immense pressure. They are extracting the work of 5,000 from
half that number.
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Marutis Manesar fallout: a management shuffle
Apr 09 2013.
Japanese parent Suzuki is seen wanting to closely oversee several critical functions
at Maruti
Amrit Raj | Shally Seth Mohile


Suzuki Motor is deputing two key Japanese officials to keep a close watch on
Marutis plant and production activities.
New Delhi/Mumbai: Maruti Suzuki India Ltd, Indias largest car maker, is in the
process of making several top management changes, with its Japanese parent
wanting to closely oversee several critical functions, including human resources
activities.
The move appears to be prompted by growing competition in the Indian car market
and a late reaction to last years labour unrest at the companys Manesar factory that
ended with the death of a manager.
Suzuki Motor Corp. is deputing two key Japanese officials to keep a close watch on
the plant and production activities in the company.
Toshiaki Hasuike, who is serving as managing officer at Suzuki, will be the joint
managing director of Maruti, while Toshio Ozawa will come in as an adviser for
human resource activities. Hasuike also served as a director on the Maruti board for
a brief period between September 2007 and January 2008.
The Maruti board is expected to approve these changes in a board meeting
scheduled on 26 April.
The changes may redefine and limit the roles of senior executives at Maruti including
M.M. Singh, chief operating officer (production), S.Y. Siddiqui, chief operating officer
(human resource and administration) and S. Maitra, managing executive officer
(supply chain).
While Singh and Maitra will now directly report to the joint managing director,
Siddiqui will work in close collaboration with the human resource adviser, who will be
sending reports on a regular basis to the Suzuki chairman.
Earlier this month, the company announced the appointment of its new managing
director and chief executive Kenichi Ayukawa, who succeeded Shinzo Nakanishi.
At the moment, there is only one change (appointment of the new managing director
and chief executive) and that has been announced, Maruti chairman R.C. Bhargava
said: Apart from that, I cant say anything as the agenda for the board meeting has
not been prepared.
A company spokesperson declined comment on the matter.
The Suzuki chairman is not very happy with the way things were handled at the
Manesar plant. Post-violence, Suzuki had asked the company to find out the reasons
but the company has been unable to provide concrete reasons, said a person
familiar with the matter who asked not to be identified.
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Last year, production at Marutis Manesar plant was disrupted by mob violence,
which left a senior human resource manager dead. The incident was followed by a
month-long lockout. Prior to the violence, the workers had gone on strike demanding
wage hike and other facilities. Later, Maruti suspended at least 550 workers
allegedly involved in the violence.
In Japan, there has not been any strike in the last 58 years. The idea behind
bringing these Japanese officials is to align the HR processes followed in Japan with
that of India, said another person familiar with the development who also spoke on
condition of anonymity.
India has been driving Suzukis growth, with Maruti contributing 40% of the parents
net profit. In contrast, Suzuki has pulled out of the US market and its sales have
suffered in Europe and Japan.
In the last fiscal, the companys car sales grew 3.3% to 1.13 million units.
Shares of Maruti fell 0.62% to Rs.1,407.85 on BSE at the close of trading on
Tuesday. The exchanges benchmark Sensex fell 1.15% to 18,226.48