How 2011 shaped 2012 for Maruti, its workers

It all began in June 2011, when a 13-day workers' strike at Maruti Suzuki India Limited’s
Manesar plant ended 11 years of industrial peace at the company which sold itself as the
manufacturer of India's family car. By the time that year ended, Maruti had lost Rs 1,000
crore, workers had gone on strike thrice and 55 productive days were wasted. To make
matters worse, on July 18, 2012 industrial relations violence at the company’s Manesar plant
resulted in the plant Human Resources (HR) chief being burned alive and nearly 100
managers injured.

When Maruti began operations in the 1980s, the response to its Maruti 800 was tremendous
and the company quickly captured the car market. However, it started to face real competition
in 1998 with Hyundai’s Santro and Tata Motors Ltd.’s Indica. Maruti responded to the
challenge and managed to maintain an average market share of 45 to 47 percent until 2009
when foreign car makers entered the fray. The global recession of 2008 also affected the
company’s profits.
In 2009, Maruti introduced several initiatives to increase production at its Gurgaon and
Manesar Plants. Output at the Manesar plant increased swiftly, however workers began to
complain about working conditions such as fewer and shorter breaks and misbehavior by
supervisors.
It was on a Saturday afternoon (June 4, 2011) that 2,500 workers at Manesar went on a strike.
The workers primarily wanted three things: (1) The management recognise a new union at the
company's Manesar plant; (2) 700-odd contract workers be paid and be given perks similar to
permanent workers; and (3) workers not be forced to sign the good-conduct bond. Workers
felt they deserved higher wages, better incentives, longer breaks during shifts. While Maruti
was resisting the demands, it was most opposed to the one on granting recognition to the
Manesar union.
According to Maruti, the Gurgaon plant had a union and, hence, there was no need for
another union. The company did not recognize, however, that the worker demographics at the
Manesar plant were different from the Gurgaon Plant. Manesar had mostly young and
unmarried workers and a large number of casual workers. More than the management of
multiple unions, the car maker was concerned the Manesar union was being politically
backed by the Left. If recognised, it would result in third-party interferences in the company's
affairs.

Both sides stuck to their positions. However, with the Haryana government stepping in, a
settlement was reached 13 days later, but without resolving issues such as the fate of the
contract workers or a final settlement on forming a union.

Naturally, the peace didn't last too long. Within a month of this agreement, workers first went
on a one-hour tool-down protest. In August-end, they went on a strike. This time, the
flashpoint was a refusal of workers to sign the good-conduct bond. Once they started the
strike, the workers demanded their union be recognised and contract workers be given a
better deal, both of which were turned down by Maruti.

This strike lasted for 33 days. In the end, the workers agreed to sign the bond. However,
while this agreement was reached, a fresh issue cropped up. While the strike was on, Maruti
had decided to hire new workers to keep the factory running. This meant some of the striking
workers had to lose their jobs. So, when the strike ended, workers remained dissatisfied. This
became the reason for another 14-day strike. And what added to Maruti's headache was that
two other subsidiaries of Suzuki Motor Corporation in India - Suzuki Powertrain India
Limited and Suzuki Motorcycle India Private Limited - also went on strike.
The problems for Maruti did not seem to end. Around that time, news came that the company
had bought peace by offering a lucrative severance package to 30 workers, who were under
suspension. These workers also included those who were leading the agitation for forming a
union in the Manesar plant (Maruti had recognised a workers' union at its Manesar plant
before the July 2012 violence). While the company did not disclose the sum it paid, media
reports cited that each worker was paid around Rs.16 lakh.

So while the leaders of the protest pocketed big money, the rest felt betrayed. And what
remained unresolved were the issues, which had first begun the June strike and which could
have contributed to the violence that broke out in July 2012.
Adapted From Source: http://www.business-standard.com/article/companies/how-2011-shaped-2012-for-
maruti-its-workers-115032100040_1.html