Maruti Suzuki India Limited: Industrial Relations

MSIL Evolution
1981

Maruti Udyog Ltd was incorporated, 100% govt. owned Suzuki Motor Corp. joined with 26% share Suzukis share increased to 40% Suzukis stake increased to 50%

1982

1987

1992
2007 2007

Suzuki became major share holder, 54.2%

Company name changed to Maruti Suzuki India Ltd.

Production Capacity of MSIL

2 Manufacturing plants - Gurgaon (old) and Manesar (new in 2007) Younger labor force in Manesar Plant compared to Gurgaon Plant, average age 25
Gurgaon Plant Capacity Products 900,000 per annum Maruti 800, Alto, Estilo, Ritz and Wagon R Manesar 550,000 per annum Swift, Swift DZire, A-star and SX4

MSIL Employed 9000 people totally Cumulative capacity of 1.5 million cars per annum

Trade Union
1981- Maruti Udyog Employees Union (MUEU) supported by INTUC In 1987, MUEU removed its affiliation with INTUC First strike
On October 2000 Reason: Issues related with Production Incentives Lasted for 90 days Termination of 39 employees Union was de-recognized by the then MUL

New union Maruti Udyog Kamgar Union (MUKU) No affiliation with any political party Election was not through secret ballet

Economic Slowdown and accelerated recovery

Domestic and export demand rose rapidly post slowdown MSIL implemented several measures to increase plant output Saving of 1700 Crore, 40 % increased production at Manesar Plant and 17% at Gurgaon plant Shift was 8 hours with a 30-minute lunch break and two tea breaks of 7.5 minutes each Manesar workers demanded union Workers approached MUKU at Gurgaon plant but no response Company promised MUKU elections in April ensuring Manesar plant representation But Manesar workers demanded separate union, Maruti Suzuki Employees Union (MSEU)

MSIL - First Strike

4th June 2011, 2000 workers at Manesar plant went on strike demanding new union, higher wages and better working condition 6th June - Company suspended 11 workers Labor office cancelled application for new union Strike was taken up by national level trade unions and Joint Action Council (JAC) was formed. 9th June, JAC rallied workers from other factories 10th June Haryana Govt. referred strike to labor court Govt. declared strike as illegal while MSIL supply chain was piling up 12th June - MSIL agreed to take 5 workers back but union disagreed 15th June Company agreed for separate union 17th June Strike ended after 13 days 19th June Plant started Functioning Company lost US $ 133 million on strike

Q1. Are these a one-off incident ?

Q2. Trust Deficit and way forward