This document focuses on industrial relations within India's automobile manufacturing sector, highlighting the challenges and changes faced due to globalization and employee expectations in the 21st century. It discusses various case studies of notable companies, including Maruti Suzuki and Mahindra & Mahindra, showcasing how communication gaps and management practices have led to industrial disputes. The analysis emphasizes the importance of effective human resource management to foster healthier employee-employer relations amidst evolving economic conditions.

1. Human Resource Management Project
Topic: A Study of Industrial Relations in the Automobile
Manufacturing Sectors- Key Issues and Interventions
Submitted by - Submitted to –
GROUP NO. - 10
Akanksha Gohil (Section B)

2. EXECUTIVE SUMMARY:
We all know that all worlds are looking towards India for investment in different areas like
manufacturing, trading, services etc. India has one of the world’s largest automobile
manufacturing sectors. After globalization Indian government also open for FDI. In India big
Corporate are coming from outside countries with their good vision and investing huge money.
India. They know the capacity, capability and scope of Indian Market. Also they know the
growth of Indian economy and scope in development of Infrastructure, education, skill, energy
etc. India has potential work force in upcoming years.
In 21st century entrepreneur and employees also sophisticated because in present means in 21st
century entrepreneur are facing industrial disputes because of their communication gap. This is
the most important factor and because of the communication gaps between employee and
employer other factors like misunderstanding, trust etc. also increasing and it cause to create
unhealthy industrial relation. The present 21st Century’s era employee is educated, they knows
easily what is happening around them, because of the source different communication channels
like newspaper, TV, mobile etc. In 21st century employee is very much high level of
expectations and thinking, they are futuristic. They want to grow fast. If the management
communicate properly they are interested in new innovative things, they are ready to change and
develop themselves. People are ready for developing their skill through training education etc.
They are very much interested to grow themselves and their children also. If they can’t get
proper support from management than they turn in to the different subject and that case disputes
may be raised differently. We know that present and past Industrial Disputes like Maruti Suzuki
Manesar Plant, Hero Honda Gurgaon, Honda Motors Gurgaon, Allied Nippon Gaziabad UP,
Pricol Tamil Nadu and Tata Motors Pune.
The scope of employment relations has witnessed a lot of changes such as pro labor judgments,
pro management judgments, recognition of unions, alignment and realignment of unions, cause
of contract labor etc. These have taken place because of a variety of reasons such as HR
practices, political factors, economic realities and constraints and so on. In 21st century the root
cause of industrial relation have been changed to Level of Employee Education, Available
Information media, Increased Standard and Cost of Leaving, Futuristic thinking, Source of
Training and Development, Lack of Employee Involvement, Lack Communication etc. Though
there was impact of globalization on the Indian industry and employee there have been change of
root causes of factors affecting on the industrial relation are distinguished.

3. INTRODUCTION:
India’s automotive industry is well-positioned for growth, servicing both domestic demand and,
increasingly, export opportunities. A predicted increase in India’s working-age population is
likely to help stimulate the burgeoning market for private vehicles. Rising prosperity, easier
access to finance and increasing affordability is expected to see four-wheelers gaining volumes,
although two wheelers will remain the primary choice for the majority of purchasers, buoyed by
greater appetite from rural areas, the youth market and women. Domestically, some
consolidation or alliances might be expected, driven by the need for access to better technology,
manufacturing facilities, service and distribution networks. The components sector is in a strong
position to cash-in on India’s cost-effectiveness, profitability and globally-recognized
engineering capabilities. As the benefits of collaborations become more apparent, super-
specialists may emerge in which the automobile is treated as a system, with each specialist
focusing on a sub-system, akin to the IT industry. Though this approach is radical, it could prove
an important step in reducing complexity and investment requirements, while promoting
standardization and meeting customer demands. Manufacturers are already planning for the
future: early advocates of technological and distribution alliances have yielded generally positive
results, enabling domestic OEMs to access global technology and experience, and permitting
them to grow their ranges with fewer financial risks. This exciting outlook for the industry is set
against a backdrop of two potentially game-changing transportation trends – the gradual
legislative move towards greener, gas-based public transport vehicles, and a greater requirement
for urban mass mobility schemes to service rapidly-expanding cities.
India is the largest tractor manufacturer, 2nd largest two- wheeler manufacturer, 2nd largest
bus manufacturer, 5th largest heavy truck manufacturer, 6th largest car manufacturer and 8th
largest commercial vehicle manufacturer.
With an average production of around 24 million vehicles annually and employer of over 29
million people (direct and indirect employment), the automotive sector in India is one of
the largest in the world.
For every vehicle produced, direct and indirect employment opportunities are created with
employment of 13 persons for each truck, 6 persons for each car and 4 for each three- wheeler and
one person for two-wheelers.

4. Figure 1: Number of Automobile sold in India
ABOUT THE SECTOR:
The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent
year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest
manufacturer of commercial vehicles in 2017.
The Two Wheelers segment dominates the market in terms of volume owing to a growing
middle class and a young population. Moreover, the growing interest of the companies in
exploring the rural markets further aided the growth of the sector.
India is also a prominent auto exporter and has strong export growth expectations for the near
future. Automobile exports grew 20.78 per cent during April-November 2018. It is expected to
grow at a CAGR of 3.05 per cent during 2016-2026. In addition, several initiatives by the
Government of India and the major automobile players in the Indian market are expected to
make India a leader in the two-wheeler and four wheeler market in the world by 2020.Domestic
automobile production increased at 7.08 per cent CAGR between FY13-18 with 29.07 million
vehicles manufactured in the country in FY18. During April-November 2018, automobile
production increased 12.53 per cent year-on-year to reach 21.95 million vehicle units.
Overall domestic automobiles sales increased at 7.01 per cent CAGR between FY13-18 with
24.97 million vehicles getting sold in FY18. During April-November 2018, highest year-on-year
growth in domestic sales among all the categories was recorded in commercial vehicles at 31.49
per cent followed by 25.16 per cent year-on-year growth in the sales of three-wheelers.

5. Premium motorbike sales in India crossed one million units in FY18. . During January-
September 2018, BMW registered a growth of 11 per cent year-on-year in its sales in India at
7,915 units. Mercedes Benz ranked first in sales satisfaction in the luxury vehicles
segment according to J D Power 2018 India sales satisfaction index (luxury).
Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2019-20.
LITERATURE REVIEW:
The following deals with the review of literature in connection with Industrial Relations and
employee retention in automobile industry. There are several publications which have made
considerable contributions to the theoretical discussion.
The objectives are:
 To understand what is industrial relations and factors affecting to it
 To understand how industrial relations are playing role in automobile industry
 To understand events happened related to industrial relations in automobile sector in
India
Paper 1:
Empirical study of Industrial Relation in 21st Century – Balasaheb Nanaware & Dr. A. B.
Dadas
The reasons of industrial disputes in 21st century and 20th century may be not big difference, but
the level of understanding and thinking of people is very big difference due to some reason
which we will find it out in this paper. Full filling different demands of Employees is being very
challenging for entrepreneurs. In this situation role of Human Resource Specialist is very
important to handle to keep balance between employees demand and management practices to
fight and sustain in global market for the betterment of the organization, society and themselves.
This paper will help to differentiate industrial relation scenario of 21st and 20th century. The
comparative study which will show us what were the areas which caused to distract industrial
relation in 20th century may not be consider in 21st century due to change in people prospective
to look towards the way to management practices.
In 21st century entrepreneur and employees also sophisticated because in present means in 21st
century entrepreneur are facing industrial disputes because of their communication gap. This is
the most important factor and because of the communication gaps between employee and
employer other factors like misunderstanding, trust etc. also increasing and it cause to create
unhealthy industrial relation.
In 21st Century Factors of Industrial Relation is as under:
1. Level of Employee Education.

6. 2. Available Information media.
3. Increased Standard and Cost of Leaving.
4. Futuristic thinking.
5. Source of Training and Development.
6. Lack of Employee Involvement.
7. Lack Communication.
8. Increased political and self-influence.
9. Change in Management Practices.
10. Lack of employee development.
11. Unfair labour practices.
In 21st century the root cause of industrial relation have been changed to Level of Employee
Education, available Information media, increased Standard and cost of leaving, futuristic
thinking, Source of training and development, lack of employee involvement, lack of
communication etc.
Paper 2:
Industrial Relations at Maruti-Suzuki – Ratna Sen
India's one of the largest automobile manufacturer, Maruti Suzuki India Ltd, has achieved
distinction in product innovation, customer services and satisfaction, and has grasp of over half
the Indian auto market. It is also a corporation which is known for making numerous changes
over the years to face the competition and for using HRM strategies extensively. Yet the
company does not emerge to have been able to build up a mature relationship with its employee
unions, and has been constantly facing confrontation with employee representatives. This could
be a sign of ineptitude on the part of the company in understanding employee rights in the host
country, or a deliberate strategy to manage unions in spite of facing small periodic losses.
Maruti's Recurrent Problem
In 2000 the enhanced emphasis on productivity provoked a tool down agitation in the Gurgaon
plant in September. This concerned the revision of production incentive scheme and the
finalization of the annual production target.
The incentive scheme was incorporated in a bipartite agreement made in 1988, based on the
number of cars produced and 65% share in the savings in labour cost.
In 1995 the management had unilaterally modified the scheme. This time, the union protested
against further modification and started leaving their plates on the dining table. The union
contention on the incentives was that while they would earn more with higher sales, their
earnings would reduce if sales fell.

7. The protests began on 9 September when the workers started wearing black badges during
working hours. The union at that time, the Maruti Udyog Employees Union (MUEU) placed
three initial demands: (a) revision of the production incentive scheme in place of the one ended
in March ‘99, (b) execution of pension package agreed upon in the previous wage settlement on
1 April 1996, and (c) a new wage settlement for all regular employees in place of the one expired
on 31 March 2000.
On 11th of September the Maruti Udyog Employees Union (MUEU) started a relay hunger strike,
and intensified their agitation with go-slow, slogan shouting, coming to work without uniforms.
From 30 September it started a daily tool-down strike for two hours. The union demanded a
negotiated settlement on all the issues of concern and threatened total strike without such a
settlement. The management responded with the demand for a good conduct undertaking which
led to the crisis of 12 October.
Conclusion
While Maruti's confrontation with its workers over the issue of production and remuneration
changes was triggered by the competition created by globalization, the manner in which it dealt
with the problem indicated very close resemblance with Honda's handling of its union in 2005.
Or possibly, Maruti's experience was sought to be replicated by Honda.
Maruti's strategy was characterized by:
 Close links with the industry-friendly state government, and getting the state to help
management by asking it not to register the new union.
 Undermining a resistant union (MUEU) by dismissing its office bearers and activists, de-
recognition of the union and establishment of a pliable and friendly union (MUKU), even
if not a management sponsored union. Many union members had signed the good conduct
bond in 2000.
 Ability to read the Central government's favourable stance, regardless of the political
affiliation (neither NDA nor UPA governments intervened on behalf of the workers,
despite the PM's meeting).
 Introducing changes in the employment structure (from permanent to contract) and using
the large labour supply to maintain a tight control over employees.
Paper 3:
Employment Relations in Automotive Industry: lndian Experiences - P.Sreenlvasan &
Manas Ranjan Tripathy
The forces of globalization and marketization of the economy have shifted the scaie in favor of
empioyers. The changing pattern of work as well as nature of employment coupled with not so

8. workers friendly judgments have an long-lasting impact on the psychological contract at place of
work.
The issues which are most pertinent in employment relations raise certain questions which
needed to be probed and analyzed. Is compliance of statutory requirements not given the
required push? In seek of answers to these questions, incidents happened in five companies were
investigated. The conclusion illustrates declining agreement to statutes and unfair practices.
We could understand the following trend from the employment relations of the above said
industries:
 The industrial unrest (strike/lock-out) have mainly took place in fast growing automobile
and auto ancillary units located away from Bengal and Kerala.
 All these events have happened within a period of five years
 Many of the issues were related to union recognition or management shying away from
the unions.
 Inappropriate handling of 'collective relations' by the management.
 The problems generally emanated from management insistence on written undertakings
of good conduct and not adhering to the understanding reached.
 The entire developments in the above said industries depict workers resorted to or
instigated violence. At some places instigated employees indulged in violence either
knowingly or unknowingly
 Workers were not treating the HR man as messenger of the management
 Proactive HR policies were not in place
 Similarly management's cold reaction to workmen's emotions led to crisis as mentioned
in these cases. The workers who demand their rights were brutalized either by police or
directly by people hired by the companies
 Settlements reached through understanding were being reopened before the time period
 Not adhering to the settlements reached
 Interest of the contract and casual labor had not been paid required attention
Conclusion
Employers and workers need to recognize and respect each other's rights and obligations.
Organizations should avoid employing two sets of employees for the same job. Further decent
work conditions and decent pay has to be provided to all sets of employees. The management
needs to look at employee empowerment, through getting the workers to take responsibility for
shop-floor decisions over quality, safety, productivity and material use as a strategic option to
develop strong industrial relations. Both employers and unions need to secure settlement of
disputes through negotiations conducted with integrative strategies and maintain business
discipline.

9. RESEARCH DESIGN:
To carry out our research we have used secondary data. Secondary data is research data that has
previously been gathered and can be accessed by researchers. It is easy and less time consuming
to obtain secondary data from the internet, government data etc.
COMPARISION OF FOUR ORGANISATION:
 Company 1 : Mahindra & Mahindra
Mahindra & Mahindra Ltd. is an Indian car manufacturing company based in Mumbai, India. It
was established as Mohammad & Mahindra and later renamed as Mahindra and Mahindra
(M&M). It is one of the largest automobile manufacturers by production in India and the only
largest manufacturer of tractors in all over the world. It is a part of the Mahindra Group, which is
an Indian conglomerate. Mahindra & Mahindra has worked very hard towards employee
relationship and industrial relations.
Key Issue:
The workers of the Nashik plant of the automotive major Mahindra and Mahindra called off their
'tool down' strike after the company management agreed to reinstate the two suspended office
bearers of the M & M employee’s union and sign the new wage agreement. This happened in
April 2013.
The company workers went on tool down strike after the suspension of union’s general secretary
Pravin Shinde and Vice president Amol Sonawane, who were on hunger strike. This was done
for the demands of a revised wage agreement. This was 15 day long strike, resulting into huge
losses to the company.
A 15-day tool down strike by the workers had badly affected the production losses to M&M and
its 350 vendors across the country. M&M itself has reportedly lost the production of 6,000 units
in the 13 working days, which is estimated at around Rs. 325 crore. On the contrary, the total
production losses to 350 vendors of M&M are estimated at Rs. 225 crore during those 10 days.
Interventions/ Steps taken by the company:
An amicable settlement was signed between the company management and the union at a
meeting called by deputy labour commissioner. The settlement was signed by general manager
and union president. The company had to listen the employees’ demand. Management of

10. company had agreed to reinstate the two suspended office bearers of the union. And the new
wage agreement was signed with concerned of the employee union.
According to agreement, the management will give an average wage hike of Rs 9,300 per month
to all its 2,950 permanent employees at the facility and the union has agreed to scale up
production by 18 per cent in a quid-pro-quo arrangement.
 Company 2 : Maruti Suzuki India Limited
Maruti Suzuki India Limited is an automobile manufacturer in India, established in 1982 and
headquartered in New Delhi. It was the first company in India to mass-produce and sell more
than a million cars.
Key Issues:-
The Manesar manufacturing plant was inaugurated in February 2007 and is spread over 2.4 km
production capacity of 100,000 vehicles annually initially.
In July 2012, the labor unrest started in the Manesar Plant with Sonu Gujjar, a local labour leader
demanding right to establish an alternative labour union due to non alignment of a large section
of workers with the existing union.
The Manesar union had demanded a three-fold increase in basic salary, a monthly conveyance
allowance of 10,000, a laundry allowance of 3,000, a gift with every new car launch. As well as
a house for every worker who wants one or cheaper home loans for those who want to build their
own houses.
The management decided to solve this problem in a less transparent way. They decided to send
off Sonu Gujjar and twelve others by stating a Golden Handshake scheme, the entire process
lacked transparency.
On 18 July 2012, Maruti’s Manesar plant was hit by violence as workers at one of its auto
factories attacked supervisors, engineers and other management personnel and burnt and killed a
senior HR executive, injured 100 managers, which included two Japanese expatriates. The angry
crowd also injured nine policemen who were trying to control the situation. The company’s
General Manager of Human Resources had both arms and legs broken by his attackers, unable to
leave the building that was set ablaze and he was charred to death.
Interventions / Steps taken by the Company :-
 As a result on July 21, 2012, the company announced a lock-out under The Industrial
Disputes Act, 1947 to take up safety and security of other personnel .

11.  On July 26, 2012, Maruti Udyog announced that employees will not be paid for the
period of lock-out in accordance with labour laws of India. Later on they also declared
that it will stop using the same contract workers by March 2013.
 Maruti Manesar Plant management decided to de-recognise Maruti Suzuki Workers’
Union and dismiss all workers named in connection with the incident.
 The plant then started Hiring contract workers through company HR and not through a
contractor. There was fresh recruitment of permanent workers.
 The plant terminate the services of 500 permanent workers who were involved in
violence.
 They reopened the plant 300 permanent workers.
 Company 3 : TATA Motors Limited (TATA NANO)
Key Issues:
Every now and then, a magnificent dream miraculously turns into reality after years of
dedication and hard work. The Nano started off as one such dream by Ratan Tata that eventually
became reality as an inexpensive hatchback for Indians who commuted every day on their
scooters or motorbikes. Those who braved the weather, the pollution, and the risk to commute to
work and back simply to provide for their families deserved at least some respite, some soothing
comfort. For most, the Nano would have been their very first Tata car, while for others it was a
dream come true. Yet, even though the idea was sound, the vehicle failed to capitalize on the
market potential and production has all but ended after sales of the company dropped to
extremely low levels. So, what could have been a great legacy, became one of the most
important case studies in brand positioning and effective marketing for the automobile industry
in India. A number of things contributed to the Tata Nano’s failure. But, let’s first look at
the small car itself.
The Specifications:
The powertrain was a 624CC SOHC petrol, rear engine and rear-wheel car with a manual
gearbox that gave a very commendable 25 kilometers per liter. But, the four-door hatchback’s
key selling point was its price. Albeit more expensive than motorbikes or scooters, it was the
cheapest small car available on the market at launch, with more variants on the way which
offered more options at a heftier price.
In fact, the manufacturer had employed a number of techniques to keep costs low, including
cutting down on all unnecessary parts by:
o Using just one windscreen wiper instead of two
o Removing airbags altogether
o Providing a thinner and lighter spare tire
o Making the fuel inlet only accessible through the front hood
o Adding only one wing mirror
This was almost the same as its immediate competitor, the base model of the Maruti Alto 800,
which was also more expensive.

12. The vehicle eventually received a makeover in 2015 and, while the first iteration did not have a
rear hatch, the new one did. It also received a facelift. But, this was not enough to draw people
back to the Nano and sales kept following a downward trend, until there simply were none left.
Too much went wrong too quickly which made the Tata Nano a failure.
Reasons Why the Tata Nano Failed:
The hatchback sounded good on paper, but a number of issues plagued the Nano before
production even started. That is where things really went wrong, bringing about the Tata Nano’s
failure. Reasons were aplenty but here are some of the major ones.
Two-wheelers are a nimble little vehicle that let people navigate through traffic easily, while
parking is rarely an issue. The same could not be said about the Nano. So, a major issue with it
was that it was not a motorbike. While it was small, it simply was not small and convenient
enough for people who were used to motorbikes. That was a major issue in the Nano’s
marketability that the automaker had not even considered. Also, the Nano was more expensive to
maintain than a bike and made car ownership more expensive. The lack of standard features that
are usually expected in such vehicles also made the Nano feel cheaper.
Both these differences compared to bikes could have been overcome with a better and safer
design as well as a more refined look and feel. It simply wasn’t what people wanted to buy.
Car sales in this segment were extremely sensitive to how good a vehicle looks.
Positioning as Cheap:
The automaker was under the misconception that the low price would be enough to motivate
people to buy the Nano. They did not account for their positioning it as a cheap vehicle which, in
India’s markets, translates to low quality. After all, who wants a daily driver that looks cheap and
is poorly built?
Simply put, those who could afford a higher end Nano did not want to drive it.
Also, when people are status conscious, they look for things that make them look wealthier than
their neighbors and colleagues. While a car sounds like it would be an upgrade from bikes, a
cheap one that looks the part will always be shunned and will never be perceived as a means to
boost one’s social status.
An older, used sedan or hatchback that was more expensive when it was first launched would
have more value for such a market than a new one that was marketed as cheap.
So, bad marketing was perhaps the key reason for the Tata Nano’s failure.
Emotionally Disconnected Advertising:
One of the most challenging aspects of marketing a vehicle like the Nano is advertising. A basic
rule of advertising is to create an emotional connection or a bond with the audience that makes
them want to experience the product. Tata failed to do so with their advertisements for the Nano.
While some TV commercials were fairly good, most of their audiences simply could not relate to
what they were seeing on screen. If the bad positioning was not enough, the fact that people also
could not relate to the advertisements made things a lot worse.
In a country where emotions play such a vital role in everything, this disconnect spelled doom
for the Nano before it even hit the roads. After all, why buy an automobile if the car owner can’t
relate to it.

13. Poor Build Quality:
One of the most significant problems with the Nano was its safety rating. The manufacturer
expected the Nano to receive four stars in the Euro New Car Assessment Program (NCAP) crash
test. But, when Allgemeiner Deutscher Automobil-Club (ADAC), a German automobile club,
tested it in 2014, it failed miserably. The Nano lacked airbags and proper adult protection. It also
did not meet basic UN safety requirements and was not as safe as Tata had claimed and expected
it to be.
The Nano was also very lightweight which made it a very bad choice for the usual Indian roads
which are not always smooth as silk. That also meant that it felt unsafe to drive because of the
simple lack of bulk.
On top of that, several incidents were reported in which the Nano caught fire for mysterious
reasons. The company claimed the cause was faulty foreign electrical equipment linked to the
exhaust.
To make matters worse, they refused to recall the vehicles with defective equipment and instead
extended the warranty period to four years, while offering to replace the supposedly faulty parts
in those already sold. Bad customer service also added to making the Tata Nano a failure.
Interventions / Steps taken by the Company :-
 Shift of the plant from West Bengal to Gujrat :-
The main challenge of Nano plant in Singur was the land acquisition. The difficulty of land
acquisition in India is due to two factors i.e. the type of land to use & the population density over
it. According to the land acquisition act, 1894 there are various issues, which became the barriers
in the process of acquiring the land by the state govt. for Tatas.
Section 11 of it makes it obligatory on the part of collector to safeguard the interest of all
person’s involved though they might have not appeared before him. In awarding compensation
the land acquisition collector should look into the estimate value of the land, given due
consideration to the other specific factors. The value of the land should be awarded within 02
years.
In Singur there are more than 1100 land holdings and out of it total 6000 families were about to
suffer from this land acquisition. The Project was to be spread over 700 acres with another 300
kept aside for ancillary production.
On September 25, 2006 the first lot of compensation cheques begin to be handed out from the
Singur Block Development office. About 10,000 people were involved in protest against land
acquisition while about 256 of the 354 people, were to be awarded compensation got their
cheques. Mamta Banerjee had first resisted the acquisition of the land in 2006 by going on a 26
days hunger strike despite appeals from the Prime minister to negotiate the settlement. The
whole process was under review with the Judiciary third party i.e. High court. The West Bengal
on Dec. 06 claimed that 920 acres of land has been voluntarily handed over by the landowners
and compensation has been accepted for 658 acres of land.

14. In March 07 Tata Motors finally got possession of land for its small car factory in Singur and an
agreement was signed between TML and state government for leasing out 949.5 acres of land to
the company for 90 years. Later on State government itself admitted that only 30% of the
landowners of Singur who own 287.5 acres of land had given consent in writing, (That means
21.65% who have even collected cheques are still against this forcible land acquisition).
The state government has also admitted before Calcutta High Court that it has not been able to
reach an agreement with farmers over the acquisition of around 300acres of the land in Singur
They also disclosed that till April 07, Rs. 90.35 crore has been disbursed to 10,021 people for
671 acres of land. The state had so far acquired 997.11 for the Tatas small car project. It had also
allotted a total of Rs. 118.95 crore to pay the compensation Rs. 0.58 crore for the bargadars.
They had not disclosed about the landowners still left to accept the compensation & their
satisfaction with the compensation they received from the government.
There are certain other reasons due to which Tata Motors Limited selected Gujarat as their home
for Nano project: –
a) Gujarat is one of the few states to have substantially higher private sector investment than
public sector investment.
b) It has relatively peaceful Industrial relations climate.
c) Relatively untouched by projects over acquisition of farmland for industry.
d) It has thriving entrepreneurial culture and SME clusters.
 Company 4 : Toyota
Key Issue:
Trouble began in February 2004 when 15 workers were suspended for misconduct for refusal
to carry out safety instructions and ensuring quality. The company had initiated an enquiry
by a person who is not part of the management & which took one year. The report,which was
submitted, was the basis on which the company dismissed three employees and reinstated
one worker. The company was forced to declare a lock-out under section 24, Industrial
Disputes Act 1947 because the workers threatened to commit suicide by entering the LPG
zone. It was an illegal strike since employee union did not give 14 days notice period.
Loss :
Under the instigation of the Union, certain sections of the employees resorted to deliberate
stoppages of the production line, abuse and threatening of supervisors; thereby continuously
disrupting business for the past 25 days .The company incurred a production loss of 2000
units of planned production in those last 25 days before the lock out was declared.

15. Interventions / Steps taken by the Company :-
Karnataka government was eager to settle dispute at the TKM plant to project the state as
investor friendly. Government was pressurized by the trade unions to intervene into the
matter and resolve the dispute in unions favour. TKMs management lifted the lockout on
January 20 th ,2006. Workers had to sign good conduct declaration which stated that :
in the plant
ISSUES, INFERENCE AND INTERVENTION/
RECOMMENDATION:-
 Issues:-
 The use of Contract Worker is a common source of conflict across many automobile
companies.
 With the hiring of contract workers comes the wage disparity issue. The workers hired
over contract has an issue with the permanent workers regarding the wage disparity.
Usually the workers hired over contract are given less wage then the permanent
employees.
 The unwillingness of the automobile company management's to recognize the worker’s
unions is also an itching issue in this industry. Though the management is not obliged to
recognize the union, it cannot refuse to hear the grievances voiced by it in respect to
service conditions of its members.
For example : On June 2011, Maruti Suzuki India Ltd. (MSIL) faced an issue with the
worker union when it refused to recognize a new union, Maruti Suzuki Workers Union
(MSWU) and insisted all workers remain part of the older union, Maruti Udyog Kamgar
Union (MUKU), which the management itself had helped set up. As a result of which
there were agitation between the management and the workers and ultimately the workers
went for a strike.
 The influx of expats has also been one of the issue in this industry, as many of them are
ignorant of Indian cultural nuances. Therefore many times these expats are not able to
understand the mindset of workers/villagers and take sensitive steps.
For Example : "We are taking steps to sensitize our members on industrial relations,
Compensation is important, but automakers should also understand the cultural transition

16. that is taking place at a humanitarian level" says Sugato Sen, Deputy Director General,
Society of Indian Automobile Manufacturers (SIAM)."
 Inference :-
Intervention and effect of the issues that the automobile industry has faced in India have been
both good and bad.
Not in favor:
1. Early in 2010, due to a series of strikes that were happening Hyundai, it had shifted
partial production of its i20 premium hatchback from India to Turkey following a series
of strikes at its plants. Similarly, Hyundai's i10 is no longer made exclusively in India as
it was before, but in Turkey and headquarters Korea as well.
Following were the words of Mr Rakesh Srivastava, Senior Vice President (Sales and
Marketing) Hyundai Motor India, "Going by the rise in conflicts, we feel the issue of
labor is emerging as a strong consideration for the entire auto industry on future
investments in India".
2. There is a thought prevailing in almost all the automobile company to shift towards
automation (denting and painting of autos), in order to reduce their dependence on labors.
So that they don’t have to face the loss of revenue due labor strike or any such activity.
In favor:
1. To maintain healthy industrial relations, automobile companies are running various
programmes to engage the workers as well in to benefit them and the company as well.
Some of these programs are skill development programs for the workers, skill
development programs for the families of the labors so that they can generate
employment of their own, an example of the same will be.
An example of the same is SAKHI program run by Hindustan Zinc Limited, Vedanta
Group. running skilling programmes as well as lowering their expectations from workers.
2. Employees or labors majors demand for a pay raise, and when management does not
agrees to the same, they initiate a strike, but to cope up with this problems, companies
now a days have started to train them in the field which is required and thus accordingly
provide them the pay raise.
Similar can be seen through the words of Maruti Suzuki Chairman, R. C. Bhargava, "We
are working with ITIs to make up for the shortfall, but demand always exceeds supply,
but this initiative will surely help."
3. In 2014 there was a lock-out situation, where Toyata had to stop its car production for 4
days, resulting into heavy loss. This event led to reconciliation Toyota management and
the labor union.
REFERENCE : https://www.businesstoday.in/magazine/features/labour-trouble-
continues-to-torment-automobile-companies/story/234237.html

17.  Recommendations :
1. ASK FOR INPUT:
Having good employee relations requires a company to have a strong dialogue with your
team. Including them in strategic decisions and getting their input will help in improving
relations and will also provide useful insights.
2. COMMUNICATE THE COMPANY MISSION AND VISION:
Employees should know what they are working towards. A company should
communicate its mission and vision, and be transparent about direction they are moving
towards. The company should make its employee understand how their role fits in with
the company’s strategic direction.
3. RECOGNIZE A JOB WELL DONE:
A simple “thank you” and a handshake for a job well done can go a long way. Taking the
time to recognize your employees’ efforts on a regular basis will help keep them
engaged, and they will be more open to working with and communicating with
management, not working against them.
4. OFFER CAREER DEVELOPMENT OPPORTUNITIES:
Your workers or labors don’t want to be stuck in the same role forever. They want to
work for companies that provide them with a clear career path and career development
opportunities.
5. STRONG AND STABLE UNION:
A strong and stable union in each industrial enterprise is essential for good industrial
relations. The employers can easily ignore a weak union on the plea that it hardly
represents the workers. The agreement with such a union will hardly be honored by a
large section of workforce. Therefore, there must be strong and stable unions in every
enterprise to represent the majority of workers and negotiate with the management about
the terms and conditions of service.
LIMITATIONS
The scope of employment relations has witnessed many changes including pro labor judgments,
pro management judgments, recognition of unions, alignment and realignment of unions, cause
of contract labor etc. These changes have taken place because of a variety of reasons including
HR practices, political factors and economic realities and constraints.
Barring Minimum Wages Act, 1948 and Unorganized Workers Social Security Act 2008,
existing labor laws are not providing required relief to employees representing unorganized
sector. The employees representing unorganized sector are in large numbers. However, we are
witnessing more problems from the organized sector. This is mainly because two sets of

18. employees doing same job with different sets of employment conditions at the same place which
is not only discriminatory but also crude oversight of the conscientious approach.
Building sensitivity to people issues within organizations requires a concerted effort. Very often
with the emotions running high among fellow managers, the task of an HR Manager to re-build
sensitivity and relations is next to impossible if the top management does not effectively
champion it. While dealing with the union which takes up the grievances of employees,
management normally look for the factor of recognition, though there is no provision under the
Industrial Disputes Act or Trade Union Act, prohibiting the management from negotiating,
discussing or entering into settlement with the unrecognized union. The Trade Union Act confers
certain rights on the registered unions to ventilate the grievance of the members of its union. In a
well settled case, it was held that the management is obliged to hear the union and resolve its
disputes as far as possible without resorting to the conciliation and adjudicatory process. Though
the management is not obliged to recognize the union, it cannot refuse to hear the grievances
voiced by it in respect to service conditions of its members.
A more significant challenge for unions and industrial relations appears to be the growing
tendency of automotive firms to become transnational companies, which make decisions about
investment and location regardless of national borders.
INDUSTRIAL RELATIONS IN FUTURE
Growing in formalization in industries that have historically been predicated on the single and
stable employer-employee relationships has been characterized by a rise in atypical forms of
employment globally. Further, it is casual workers that have been and will continue to be
expendable in the event of technological disruption. As seen across OEMs and auto component
manufacturers, automation of a task function in brownfield factories meant that casual workers
would be laid off as permanent workers are either trained to work with robots or re-deployed
elsewhere in the assembly line. Long-term insecurity and flexibility of hours on low pay also
causes mental and emotional stress upon young workers. The contractual structure of
employment could itself be a hindrance to provisioning of social security and benefits to
workers. The potential of the global move towards protectionism in developed economies and
decreasing costs of production through large-scale adoption for Industry 4.0 technologies is
predicted to create additional pressure on productivity in developing economies, the brunt of
which could be borne by workers . It then becomes important to develop policy frameworks
under which basic fundamental social security provisions, such as minimum wages, decent
standards of occupational health and safety, maternity and disability benefits, and pensions and
gratuity, are extended to a vast category of casual workers in both the formal and informal
sectors.
The automotive industry in India has historically been overwhelmingly populated by male
workers across both blue and white collar jobs . The theory of occupational segregation, which

19. posits that occupations with certain tasks and crafts are treated as male domains , can be used to
understand the lack of female workers in jobs involving intensive manual labour. Industrial
segregation, which posits that different industries show different patterns of gendered
occupational segregation , explains the lack of female labour even across jobs in the automotive
industry that require cognitive, or non-intensive manual labour. Female participation in the
automotive sector in India needs to be contextualized with a discussion on female participation in
manufacturing. Data for 2011-12, 29 percent females were concentrated in manufacturing
industrial work , while 91 percent were concentrated in the informal sector . Major causes of lack
of participation in the automotive sector include education and skilling: skilling gaps in female
workers , gaps in engineering and technology 88 education in the country , as well as vocational
training through Industrial Training Institutes . Females have tended to be engaged in activities
in industries such as beauty and wellness, which has had industry engagements and high
placements rates . Other major factors of low female participation in the labour force include the
disproportional care burden on females , cultural barriers, such as lack of mobility , as well as the
social status attached to females confined in private spaces in amongst the upper and middle
classes, especially in Hindu communities . The lack of mobility has been attributed to cultural
barriers to accessing public mobility in India. The need to enhance female participation in the
automotive sector by creating adequate physical infrastructure, including toilets, and
transportation within factories, as well as keeping in place safety measures, was reiterated by a
representative from the Human Resources department at Maruti Suzuki India Limited. Over the
last few years, large OEMs such as Tata Motors, Mahindra and Mahindra (M&M), Hero
Motocorp, and Bajaj, have introduced female-only assembly lines on the shop floor, with
females comprising at most 4% of the workforce in any of these plants . Female staff was found
to be concentrated in white collar jobs, 98 across areas such as HR and data management, and
the proportion of participation is thus extremely small on the shop floor. There is, however,
direction in large OEMs to work towards achieving gender diversity. Maruti, for instance, has set
targets for 2023 for a pilot project on increasing gender and regional diversity across their plants,
and across senior and mid management as well as on the shop floor. In places where entirely
female lines are being implemented, workers are performing the same task functions, and have
been recruited through the same technical education and skilling programmes run by the
Automotive Skill Development Council, as their male counterparts . Section 66 of the Factories
Act, 1948, which disallows female workers from working in night shifts, was demarcated as a
major challenge to exponential hiring of female line workers, as lines work across all three shifts,
two during the day and one at night. Government has issued an advisory to states to permit
females to work in night shifts provided adequate safety precautions are in place . As mentioned
above, most manufacturing jobs with intensive manual labour, including heavy manufacturing
have been employing male workers historically . With regards to this, it has been asserted that
the participation of female workers on the shop floor will have a reciprocal relation with the
uptake of robots for mechanical hauling and lifting across various shops . The automation of
tasks requiring biomechanical power is touted to increase female participation in jobs with
manual tasks , and the exponential participation of female workers will 103 better incentivize

20. plants to adopt technologies such as relatively low cost ‘pick-and-place’ robotic implements.
Combined with the move towards increasing gender parity, automation of hazardous tasks which
have been historically inaccessible to females could prove to give a push to female labour force
participation in the sector. This has to be met with a parallel increment in female participation in
technical and mechanical skilling, and STEM education.
CONCLUSION:
In conclusion, it needs to be mentioned that ceteris paribus, IR in future may move in the
direction of comradeship between the two main IR protagonists — management and trade union.
With the terms of debate already showing signs of drastic change, IR in future will be governed
by a totally new set of parameters. There is gradual realization by both the partners that to
survive, both have to surrender their sectional interests at the alter of the superordinate interest of
the economy. Only time will tell if both really join hands to face and fight the phantom of the
market forces that have unleashed a terror of insecurity and extinction together with the bright
hopes of revival and growth.
REFERENCES:
 http://sdmimd.ac.in/SDMRCMS/cases/CIM2012/9.pdf
 http://en.wikipedia.org/wiki/Maruti_Suzuki
 https://www.hindustantimes.com/gurugram/maruti-factory-violence-verdict-a-brief-
history-of-the-case/story-hXMxAHf6I3DuJHCflV47YN.html
 https://www.business-standard.com/article/companies/mahindra-workers-threaten-strike-
at-nashik-over-wages-113030600029_1.html
 https://www.gtnexus.com/resources/blog-posts/top-5-challenges-facing-auto-companies-
coming-year
 https://www.qualitydigest.com/inside/quality-insider-news/six-tips-help-automotive-
industry-improve-quality-and-reduce-recalls
 https://www.indiainfoline.com/article/news-top-story/the-93-billion-automotive-industry-
contributes-7-1-to-india%E2%80%99s-gdp-116112500195_1.html
BOOKS :
 Industrial Relations- A. M. Sarma
 Human Resources Management - Gary Desseler
 Human Resource Management - Dr. P.C. Pardeshi
 Industrial Relations - Paul Edwards
 Industrial relations by Developing Economy - Dr. BishwanathGhosh