Group-2

INTRODUCTION
In 2009, labor unrest started in the Manesar plant of
Honda Motorcycle & Scooter India Ltd. (HMSI), the
Indian subsidiary of the Japan-based Honda Motor
Company. The workers allegedly resorted to a job
slowdown and other tactics to push for higher wages
and perks.
• Issues
– Labor/industrial unrest
– Labor/industrial dispute
– Strike and job slowdown
HMSI
HMSI was established on August 20, 1999, and a plant
was set up at Manesar to manufacture two-wheelers
for the Indian market. HMCL made an initial
investment of Rs. 3 billion to establish the plant
which had an annual production capacity of 200,000.
About the factory
The factory is modern, only four years old. The plant churns out
2,000 scooters per day and employs about 1,900 to 2,500
workers.
In 2004 HMSI is said to have sold 550,000 scooters in India.
Scooters and other two-wheelers are still the most important
means of motorised transport in India. In 2003-04 about
5,625,000 motorcycles were sold, compared to 850,000 cars.
Most of the workers are hired by subcontractors or only get
daily contracts. The wages are poor, securing mere survival.
A lot of workers come from the surrounding small villages or
even from other states and they rely on the company’s bus
service.
Labor Unrest at HMSI

The Gurgaon plant of HMSI had peaceful labor relations

for the first few years after it was set up in October 1999.
The management entered into labor contracts with
individual laborers, which covered the basic wage
structure and detailed parameters specifying the work
conditions for workers.

In December 2004, the workers at HMSI's Gurgaon plant

started demanding that the management increase their
wages commensurate with the company's growth in the
market.
Violation of Laws

Some analysts charged that the incident was fallout of the

long-term oppression and malpractices at the Gurgaon
factory by the HMSI management.
They alleged that HMSI's management had violated
certain laws relating to the welfare of workers (Refer to
Exhibit III for laws related to welfare of workers in India).
It was reported that a worker had allegedly been kicked by
a Japanese manager on the shop floor in December 2004.
The services of four other workers who had come to his
rescue were allegedly terminated.
The Cause of the Conflict
The conflict began in December 2004 after a manager allegedly
hit a worker, who was said to be engaged in organising a union
within the plant.
Another four workers were sacked after they expressed their
solidarity with their workmate. The official justification for the
dismissals was "undisciplined behaviour in the factory”.
The whole situation came to boiling point when the
management sacked another 57 workers and nearly all the
workers in the factory reacted by going on strike in June 2005.
At the end of June 2005 the management replied by officially
sacking 1,000 workers and locking out the strikers.
About the Strike

27th of June: Workers from the surrounding

villages are not fetched by the company buses.
The management wants to force them to sign a
declaration saying that they renounce further
demands and strikes.
10th of July: According to media reports, about 38
percent of the workers are still working, some of
them are recently hired temps and redeployed
office workers.
Contd.
13th of July: The employers’ association of the automotive
supplying industries (ACMA) demands that the
government takes steps against the strike at Honda,
complaining about the negative impact on the situation in
other plants in the region.
25th of July: Between 2,000 and 3,000 workers of the
Honda plant demonstrate in Gurgaon, supported by family
members and employees of other factories.
Contd.
28th of July: A solidarity strike takes place in
Gurgaon, called for by left parties. The
participation is low. An India-wide day of protest
is announced for the 1st of August.
1st of August: Production is officially resumed,
but only 800 to 900 scooters are produced per
day. Arbitration proceedings take place, but no
representative of the workers is admitted.
About the Results of the Strike
In total the company lost about 1.2 Billion Rupees due to
the strike. The media presented the result of the strike as
following:
All dismissed workers are re-hired, under the condition
that they sign a so-called ‘good-conduct’ declaration
promising to abstain from further demands and strikes.
The workers are granted a wage increase for the year,
although we couldn’t find any info on the exact amount.
There is contradictory information on the question of
whether the days of the strike will be paid or not.
Some sources say that all strike days in May and June
will be paid, others say that they won’t.
The AITUC demands the release of all workers still in
custody and union recognition in the company.
Could this Ugly Situation have
been Averted?

Several factors can lead to a conflict between the

workers and the management of any company,
and as such, companies should be prepared to
trace the root cause of the problem and solve it
Industry experts opined that with proper
understanding of the industrial laws and causes of
disputes, the management and the workers of any
company could avoid incidents such as the one at
HMSI
Conclusion-

Factory managements admitted production was disrupted.

“Workers were boycotting work and had joined the procession,
though the general office staff had reported for duty. The
assembly lines were not working,” a senior Honda Motorcycle
and Scooter India (HMSI) official said to agencies.
Hero Honda, the world’s largest two-wheeler manufacturer,
also admitted that the strike has made some impact on
production. “The recurring labour issue in the Gurgaon-
Manesar belt is severely impacting the industrial environment
in the state, and hence it is indeed a concern for all industry.
The ongoing workers’ problem at some of the auto component
suppliers’ plants has impacted our operations.”
In a statement, the company said production on the morning
shift at its Gurgaon plant was impacted owing to a shortage of
components
Thank You