MARUTI SUZUKILIMITED A CASE STUDY ONINDUSTRIALUNRESTBy :-• Bharti Jaswal• Isha Choudhary• Chandni Uppal• Avitej Singh• Nitish Rattan• Parminder Singh• Dipin Pal• Sunniya Khanna
The term industrial unrest is used to describe activitiesundertaken by the labor and other working peoplewhen they feel grievances and protest against pay orconditions of their employment.
MEANING OF LABOUR UNREST MEANING LABOUR UNREST Labour unrest is a term used by employers or those generally in the business, community to describe organizing and strike actions undertaken by labor unions, especially where labor disputes become violent
MARUTI UDYOG LTD. MARUTI CO. got incorporated in 1981 with private ownership and was first co. who brought revolution in automobile industry. It has 10 basic models with over 50 variantsi.e 9 out of maruti being manufactured and 1 from suzuki being imported. Over last decades MUL has launched cars—maruti 800,alto,omni ,esteem,wagon r,gypsy,vitara,baleno with maruti cervo, maruti suzuki eeco,maruti ritz ,sx4 being newly launched. Its functions through 303 sale outlets in 189 indian cities. It is headed by ---Mr.Shinzo Nakanishi who is chairman and director.
Collaborationof Maruti with Suzuki Suzuki collaborated with maruti in december 1983 and actual production also started in 1983. Maruti udyog ltd. Was renamed as maruti suzuki india limited on 17 september,2007. It became first indian car company by manufacturing millions of cars in march 1994. It works on japanese technology but according toindian conditions and indian car users. It has total market share of 44.9% in indian passenger cars industry by march 2011. Now co. had recently launched first life‘s utility vehicle maruti suzuki ERTIGA.
The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over 600 acres (2.4 km2). Initially it had a production capacity of 100,000 vehicles annually but this was increased to 300,000 vehicles annually in October 2008. The production capacity was further increased by 250,000 vehicles taking total production capacity to 550,000 vehicles annually. The Manesar Plant produces the A-star, Swift, Swift DZire and SX4.
MEANING OF GOOD CONDUCTBONDIt is written and signed promise toconduct good behaviour bysignatureholder to organisation forwhich bond has been signed.It includes basic rules or principlesfor determining what constitutes‗good‘ or ‗‘right‘in behaviourIt consist of set of predeterminedmoral judgmentsIt is descipline of dealing with whatis good and bad with moral dutyand obligation
GOOD CONDUCT BONDBY MARUTI SUZUKI COMPANY• REASONS……. WHY CMPANY DEMANDED ABOND SIGNING WITH LABOURERS.• Government reported that company‘s management entered into bond aggreement with labour unions demanding that labour entered into unfair labour practises calling for arbitrary act of bond agrreement given in industrial disputes act 1947.• The company demanded it as strike by labourers resulted in defective production,wide sread indiscipline by labour.
REASONS• The heart of problem at manesar plant is indiscipline displayed by a section of workers over past 2 months.----- Refusal to follow instructions ,resorting to go-slow,deliberately causing quality problems in cars.• Car maker faced a series of occasions where workers struck work causingproduction loss of over rs.2,000 crores between mid july and mid- october this year.
DEMAND OF MANAGEMENT FROM WORKERS IN BOND AGGREEMENT• In December1,2011haryana govt. Had reported that it has authorised bond being sent by maruti co. For its labourers to promise that they will not go on slow down, strike or other indisplinary actions and they will effectively produce goods without any defect and without stopping production in future.• Company also demands labourers not to form union seperately for manesar plant as it is backed by political parties which adversely affects profits of company.
LABOURERS ISSUE ON BOND BEING UNFAIR• IN SEPTEMBER ,2011 WHEN BOND WAS PRESESNTED BY MANAGEMENT, LABOURERS CRITICISED MANAGEMENT CONDITIONS .
REASONS FOR CRITICIZING• Labour force criticised management for having their own union in manesar plant as it feels that…….• The old union i.e. Of gurgaon is totally in hands of management and what they do is just for their own employs in gurgaon plant.• Moreover,they feel that their hr department doesn‘t listen to their complaints.Infact they force them only on completing increased targets by management.• Furthermore,many contractual employees had been removed and permanent employees suspended demanding their own union for non exploitation of manesar employees by management
Continued….• Union is also demanded as the working conditions provided to them are not adequate as employees get only 30 minutes break for lunch and 7 minute break for tea .• In addition to it, workers are also not given incentives, pay, medical and other benefits equally nessecitating making of separate union by workers.
BOND ACCEPTENCE BYWORKERS AND MANGEMENT• First agreement was signed by 600workers in 2001 out of 4800 workers forcefully.• An agreement was agreed by management and workers on oct1,2011
• The agreement between employees and management was done in such a way that…. Management would take back terminated employees if the working employees would meet the target and work smoothly• Moreover,management introduced a change in its condition that now employees will be first enquired and then fired out if he is seen inefficient.Earlier it was stated that employees will be fired out without being enquired.• After the bond signing,18 trainees were taken back which were dismissed, 15 permanent workers were suspended only which were terminated.
A STUDY OF MAJOR UNRESTS IN MARUTI SUZUKI .. :-
INDUSTRIAL UNREST IN YEAR 2000.. ON 12 OCT,2000 WORKERS FIRST WENT ON STRIKE WITH 4700 EMPLOYEES RESISTED TO WORK . STRIKE TOOK ITS FORM FROM AGITATION BY WORKERS DONE IN SEPETMEBER2000. IT RESULTED IN PRODUCTION TO FELL DOWN BY 40% IN NEXT 3 MONTHS.
REASONS INCENTIVE SCHEME---- WORKERS WERE NOT SATISFIED WITHINCENTIVE SCHEME DECIDED BY MANAGEMENT BASED ON SALES OF CARS AND SPARE PARTS WHICH WORKERS AGIATED ON ISSUE THAT THIS SCHEME WAS NOT THAT WORKERS WOULD EASILY DETERMINE. DISSMALS---MANAGEMENT SUSPENDED 10 WORKERS FOR SHOUTING SLOGANS,LATER DISSMISSED 4 WORKERSRESULTING IN REGULAR DISSMALS. COMPETITION---DUE TO INCREASED COMPETITION , MANAGEMENT INCREASED PRODUCTION TARGET FROM 400 CARS IN 1982 TILL 4 LAKHS IN 1999-2000.
Introduction of SCANLON type incentive scheme. The union demanded reinstatement of the original incentive scheme which had been in place prior to 1995, according to which 65% of all savings in labour-cost above the norm set (at 41.5 cars per worker per year) was to be distributed to workers as an incentive bonus. Death of three persons in October 2000. Mandatory requirement of signing a ‘good conduct undertaking’
STRIKE OFF!!!!! ULTIMATELY WHEN WORKERS WERE TO ENTER FACTORY AT GURGAON, POLICE FORCES GREETED THEM AT GATE WITH THE RESULT FORCING WORKERS TO SIGN AGREEMENT RESULTING IN 600 WORKERS SIGNED OUT OF 4800 WORKERS DUE TO FEAR OF BEING DISSMISSED. MANAGEMENT AND WORKERS COMPROMISED ON TERMS THAT MANAGEMENT WOULD REINSTATE DISMISSED WORKERS AND WORKERS WOULD AGREE TO INCENTIVES SCHEME IMPLEMENTED BY MANAGEMENT.
CONSEQUENCES OF STRIKE OF2000 As a result of compromise ,the management started harrassing workers so by not letting them get free time for rest etc so that employees may go in for voluntary retirement scheme .It helped management in a way that they were able to opt for contractual employment of workers which helped to decrease the operational cost and increase profits by 50%. The kamgar union was formed which was puppet in hands of management in gurgaon resulting in no favourism to workers by union.
CASE STUDY (2011) INDUSTRIAL UNREST IN 2011 AT MANESAR PLANT IN HARYANA.
EXPLANATION OF STRIKE IN2011 FIRST OCCUPATION--- 4TH JUNE TO 17TH JUNE 2011-----
First Occupation Maruti - Suzuki workers launched sit-in strike from June 4 demanding trade union rights. Knowing workers‘ initiative for a new union, the management forced and threatened workers to sign on a blank sheet allegedly to state that they will not join the new union. 3,000 workers started a sit-in strike from June 4, 2011 in the Manesar Plant, demanding recognition of newly formed Maruti Suzuki Employees Union (MSEU). To put pressure on workers, on June 6 the management dismissed 11 workers including MSEU office bearers for allegedly inciting workers to go on strike.
Maruti – Suzuki has an in-house union, Maruti Udyog Kamgar Union (MUKU) at its Gurgaon Plant for which elections have not been conducted for a long time . Workers at the Manesar - Industrial Model Township (IMT) plant feel that the MUKU is dominated by the management and is not taking up workers‘ issues such as wages, intensification of work and regularisation of trainees and contract workers. However, the management has been maintaining that it will not allow the Manesar plant to have an independent union or a union affiliated with a political party, and they can become part of the existing MUKU union.
The 13 day long sit-in strike by workers at the Manesar was successfully concluded on June 17. An agreement was reached under section 12(3) of Industrial Dispute Act in the presence of Hon‘ble Labour Minister of Haryana. Broadly the terms of agreements are as follows: 1) The 11 dismissed workers are reinstated pending domestic inquiry, 2) No work no pay for the period of strike, 3) The application filed by the workers for registration of a new union on June 3, 2011 will be duly processed by the labour department of Haryana, and 4) Both the parties agreed to cooperate with each other.
THE UNDERGROUND From 17th to 28 august dispute continued. But by the end of june authorities refused the application for union registration. Workers refused to take part in voting process of kamgar union of gurgaon‘s elections. Company fenced grassy and open areas which usually became place for occupation by workers for undertaking strike.
THE LOCKOUT On 28th july onwards---Police took 4 workers to management for creating violence.In protest workers of a –shift laid their tools.Management refused b-shift workers buses to enter plant. Then management agreed to let b-shift enter.A-shift workers refused to go out of plant. At beginning of august– contractual workers complainted for work load being excess. The line manager abused one of worker .At end he had to applogise in front of large crowd of workers.
Second Occupation On August 23, Maruti Suzuki suspends 2 workers at Manesar plant (suspended two workers at Manesar plant for indiscipline on the shop floor). On August 30, Company management forced a ―good conduct undertaking‖ on workers to check constant labour problems and ensure orderly production, around 20-25 of 950 workers agreed to sign the undertaking. On August 31, Maruti Suzuki refused to hold any negotiations. Also, suspended 16 more workers and terminated 12 trainees for creating indiscipline. On September 2, Workers from adjoining plants like Hero Honda, Hero Motocorp, Suzuki Motorbike plant extended support .
On September 7, "Lathi khayenge, jail jayenge... Par union banane ka haq nahi chhodenge.... said MP Gurudas Dasgupta to extend support to the protesting workers at the Manesar plan. On September 10, Suzuki chief Osamu Suzuki said that, ‗Maruti Suzuki won‘t tolerate indiscipline‘. Company sought a ―good conduct bond‖ from workers to control indiscipline in production and quality . On September 13, Maruti Suzuki India is understood to be planning to recruit 100 new permanent employees to replace the existing ones. Also, the company has decided to give the current workers time till September 19 to sign the "good conduct bond" before replacing them with new workers.
On September 15, The labour unrest at Maruti Suzukis Manesar plant spread to Suzuki Casting Division, Suzuki Motorcycles in Gurgaon , threatening to further escalate tensions in the area. On September 16, Maruti freezes operations over labour trouble at both Manesar and Gurgaon plant. On September 22, “We should not make losses, but profitability will be reduced,‖ Maruti chairman RC Bhargava said. On September 30, Management decided to only suspend 44 terminated workers and workers agreed to sign the Good Conduct Bond. In 33-days duration of strike, company‘s production reduced by 22000 cars
On October 3rd, Management accepted entry of permanent workers, but not of temporary workers in premises. On October 7th, Some temporary workers got their final dues, but others went on strike as they didn‘t received it. On October 8th, The workers inside factory along with Suzuki Castings, Motorcycles workers went on sit down strike, those who were hired during lockouts also got involved in it. On October 14, About 1,500 police personnel entering the factory and asking the striking workers to vacate the premises as per the Punjab and Haryana high court order. The high court of the state of Haryana, home to Manesar, declared the current strike illegal on Thursday.
On October 21, A long strike at Maruti Suzuki Indias Manesar plant has been called off this morning following a tripartite agreement between the management, workers and the Haryana Government. Tripartite Agreement involves : 64 permanent workers were taken back. 30 workers remained suspended. Good Conduct Bond was signed. ―No Work No Pay‖ rule was agreed upon.
On November 14, Trade union leader Sonu Gujjar quits with Rs 1crore payout. 30 suspended workers at Marutis Manesar plant, including their two leaders Sonu Gujjar and Shiv Kumar, had quit the company, taking home amounts ranging between Rs 16 lakh and Rs 40 lakh
STRIKE OFF AT LAST ON 21ST OCT. THE STRIKE TOOK OFF BY WORKERS. ON 22ND THE PRODUCTION RESUMED IN MANESAR PLANT.
The Beneficiaries Toyota – Etios Honda - Jazz Mahindera – XUV500 Hyundai - Verna
Maruti Suzuki reported a sales decrease by 12.74% in the month of August 2011 that stood at 91442 units compared to 104791 units in the same month last year. The company has posted that this fall was due to the ongoing labour unrest at its Manesar plant that has affected production. ―The disruption in production at company‘s Manesar plant in end August adversely impacted the sales numbers during the month,‖ reported as by sources.
Sales of the company‘s mini-segment cars, including the M800, A-Star, Alto and WagonR, fell by 18.34 percent to 37,496 units from 45,917 units in August, 2010, it said. The compact segment (comprising Estilo, Swift and Ritz) witnessed a 26.93 percent dip in sales to 16,043 units from 21,955 units in the same month a year ago. Sales of DZiRE decreased by 6.82 percent to 7,856 units from 8,431 units in the corresponding period a year ago, the company said. MSI‘s mid-sized sedan SX4‘s sales slipped by 7.57 percent to 1,893 units from 2,048 units in the year-ago month.
Maruti shares have fallen more than 27 percent in 2011 due to the unrest. Striking workers demanding the re-employment of sacked colleagues, who took control of Marutis 1,000-cars a day plant in Manesar a week ago, stopped production on Friday. A supporting strike at a neighbouring Suzuki power train plant halted parts supplies to Marutis second plant in a nearby town, shutting it down too. That plant usually makes 2,800 cars a day.
LESSONS FROM MARUTI LABOUR STRIKEIT IS SAID THAT BETTER WORKER MANAGEMENT RELATION HELP TO CUT COST AND INCREASE SALES AND FACE COMPETITION . AS MARUTI FACED ABOUT 1500 CRORES OF COST DUE TO LABOUR STRIKE.
There need to be efficient communication and feedback among workers and management so that there will be less chaos and confusionThere should be involvement of workers in atleast the policies and proceduresto accomplish targets .In this way employees will feel motivated.As it involves large sum of money in getting The production done through workers in form of training them , cost of raw material in usage etc. So considering this the management should employ workers and semi skilled and skilled workers as per requirements of the job. The management should treat their employees with respect as employees seek pride in what they do and where they work. 5 strategies to be employed for retaining employees…… Environment Support Compensation Growth Relationship