1. Maruti article
Introduction
Maruti Suzuki a name which was once a part of every household is in the news
again for all the wrong reasons. A company which was an epitome of modern
industrial and management practices has now become an epitome of how these
modern practices become self destructive over time. The 18th
July incident at
Maruti Suzuki’s Manesar plant, should act as an eye opener for the industrialists
who practice hardcore capitalism, and learn an important lesson, that if the very
foundation of an company/factory/enterprise i.e its labour force, is treated
unequally and without dignity, the result could be disastrous and the policy
decisions taken by the management is accountable for it.
The incident of 18th
July 2012 at the Manesar plant of MSIL was a very
unfortunate episode that should not have taken place and I personally strongly
condemn the killing and the violence that occurred at the factory plant.
The location of the MSIL plant
The Maruti Suzuki plant of Manesar is located in the state of Haryana in
northern India which still has a strong presence of feudalism. The state also has
communities that follow the staunch system of khap panchayats. Haryana has
developed in the agricultural sector quite rapidly with the green revolution,
however this development has been skewed since the absolute domination of
the upper class Jats has not budged an inch. We often see reports of oppression
of the lower castes, dalits, by the upper castes, like the one of Mirchpur in 2010.
Amongst such intense social dynamics, large scale, modern and highly
technologically advanced plants are introduced. Even though Japanese style
management system was introduced, a strong feudal relationship between the
management and the contractors still exists.
When we look at the location of the factory in Manesar, firstly it is about 50
kms from Delhi the capital of India, barely one hour journey; therefore the
workers are not from the city but from nearby villages where the social
dynamics are completely different from an urban agglomeration and the caste
system and feudal system is inbred. Secondly, the location of the plant in IMT
(Industrial Model Township) Manesar is also secluded consciously from the
outside world, right at the end of the industrial area, where no public transport
reaches. Does the secluded location of the factory, have any relation with the

2. fact that the management has been adopting the strategy of union avoidance and
union busting/bashing for the past one year? Which is the right of every worker
or for that matter every citizen as guaranteed by the constitution of India?
The company’s version of the 18th
July 2012 incident
In a statement given to a leading newspaper, the company said the violence
broke out in the evening when a worker beat up a supervisor on the shop floor
on the morning of 18th
July 2012. The workers' union prevented the
management from taking disciplinary action against the worker. As part of their
protest, the workers prevented executives and managers from leaving the
factory after working hours. They blocked the exit gates and held the executives
hostage. Maruti management claimed it tried to resolve the issue amicably as
members of the senior management met the union. During the negotiation, the
workers allegedly attacked the members of the senior management, executives
and managers. A huge riot occurred in which a senior HR executive was
allegedly killed by workers. About 85 people, including 9 policemen, were
reportedly injured1
. 114 workers have been arrested by the Gurgaon police and
face charges that include arson and attempt to murder. These charges are framed
to ensure that none of the workers get bail. Maruti claimed that armed with iron
rods and door beams of cars, the mob of workers spread out in groups in the
factory area and targeted supervisors, managers and executives... rendering
many of their victims bleeding and unconscious, They also ransacked offices,
broke glass panes finally, they set the offices on fire2
.
The FIR, filed by Deepak Anand, GM of the plant, says that Jiyalal a worker
who belongs to the lower caste assaulted a supervisor named Shamsher Singh
who claims to be from a lower class named Majhi and complained of the assault
by Jiyalal which led to his suspension. However the workers informed that
Shamsher Singh belongs to the upper class and he had assaulted Jiyalal and
called him a chamar.
Later the company claimed that the Shamsher Singh and jiyalal incident was
not real trigger of the violence, but the fact that about 2 weeks before this
incident, two union leaders were accused of manhandling a supervisor and were
1
Source: http://www.marutisuzuki.com/Senior-management-members-injured-as-workers-resort-to-violence-
at-Maruti-Suzukis-Manesar-plant-.aspx
2
Source: http://www.reuters.com/article/2012/07/19/us-maruti-unrest-idUSBRE86I0KQ20120719

3. let off by an oral apology. However an ordinary worker Jiyalal was suspended
for a similar incident, this provoked the workers and they went on a rampage3
.
Reports by Media
When the news about the incident came out, without any research every
newspaper and TV news channel began to show how the workers killed an HR
manager and burned the factory and damaged the factory property, and the
company has declared a lockout. Which the company has announced will be
lifted by next few days. The very next question that everyone asked was that,
how would the company make profits now? And the next reports showed how
the company is losing its sales and profits. One news channel questioned the
public whether the workers were right in killing the HR manager, directly
suggesting the fact the workers murdered a company employee and it is the
moral obligation of the nation to think so too.
What happened to telling both sides of the story? Doesn’t good journalism mean
doing an in depth research of an incident and bring forward a neutral
perspective depicting both sides of the story and allowing the people to form
their own opinion? Or has this definition of journalism become redundant? And
what we practice now is conveying the opinion/story/views of only one party,
preferably the one that has more power and resources to influence and
manipulate the media and disguise the actual facts.
The workers’ version
Jiyalal was assaulted by Shamsher Singh who called him a ‘Dhed’, which is a
casteist slur, and only Jiyalal was suspended for this. The workers went to the
management to protest against this at the end of the first shift at 3:30 pm on 18th
July 2012. The management refused to concede and the meeting ended at 7 pm.
The workers claim that one contractor Rakesh was bringing bouncers to the
factory premises to intimidate the workers which have not been denied by the
Maruti management so far, who were present that day too. These goons later
went on a rampage which the workers joined, but however they do not know
who or how the fire started. The most interesting fact that comes from the
workers version is that the HR manager Mr. Awnish Kumar, who was killed in
the mishap, was seen leaving the factory premises after the meeting.
3
Source: http://articles.economictimes.indiatimes.com/2012-08-06/news/33065410_1_maruti-s-manesar-
maruti-worker-union-president

4. Several reports say that, Awnish Kumar was not happy at Maruti Suzuki
Manesar and wanted to quit the company.
The real face of Maruti Management
The workers of MSIL Manesar have been in a tussle with the management since
last year. The major issue being that the management was not recognising the
workers union MSEU. The company saw a series of strikes and finally the
management forced the union leaders of MSEU to take VRS and formed a new
union MSWU. The major issues of this plant of company are as follows:
• The proportion of contract workers and permanent workers is highly skewed.
There are 950 permanent workers and 2000 contract workers. They do the same
core activity but are paid disproportionately. The permanent workers get
between rs.18000 – rs.25000 while the contract workers get the industrial
minimum wage of the state which is Rs.6000.
When two different types of workers work in the same area, the same
establishment and do the same core activity it creates tension between both the
parties. The contract worker feels insecure since he is being paid so less for the
same work and it would take him minimum six years to become a permanent
employee as per the company rules if he is lucky, which is a long time4
.The
permanent worker feels insecure about his job, because a contract worker is
doing his job in 1/3rd
of his salary and thus feel threatened. This contradiction at
the shop-floor is harmful for the workers and ultimately has bad outcomes, like
the one witnessed the outburst on 18th
July 2012.
4
The procedure for a contract worker to become a regular employee is as follows:
1. Under the contractor for two years and has to be below 25 years of age.
2. One year of apprenticeship.
3. Eligible for the written exam to become a trainee.
4. If passed the exam, he is promoted to be the trainee for three years.
5. His work is observed, and if there is a vacancy, he is promoted to be a regular worker.

5. The graph shows the increase in the number of contract workers in all the plants of MSIL in Gurgaon
and Manesar.
Source: Primary Data Collection and MSIL annual reports.
Permanent workers in 2001were 5800, reduced to 3000 in 2011. Contract workers in 2001 were 1500
which increased to 7000.
• The management adopted a very narrow minded approach to increase their
profits. The greed of increase in profits firstly led them to employ contract
workers in large numbers. Secondly, the work was highly intensified. 1 worker
in Maruti makes 26 cars in a month! How does he do that? In order to save time,
the workers get a break of 7 minutes for tea and a lunch break of 30 minutes, in
which they have to go the canteen which is half a km from the shop floor, drink
tea/ have their food and go to the bathroom, which is humanly impossible to do.
Apart from this, they do not get any breaks for nature’s call. For the entire
duration of the shift they stand and work which takes a toll on their body. And
along with such physically tenuous work, the workers had to face the wrath of
the bouncers who are deployed at the factory premises by the management.
How can any person bare this humiliation and physical and mental pressure for
a long time with silence?
• The inflation rates fluctuated tremendously between 2007 and 2011, 4.8% in
2007, 0.1% in 2008, again increased to 2.7% in 2009, 1.5% in 2010 and 3% in
2011. These fluctuations affected the real wages of the workers especially that
of the contract workers. But the management as well as the state government
did not take care of this aspect. The contract workers employed in 2007, when
the plant started, have been working for the same rs.6000, without any increase
in their salaries in relation to the inflation. This obviously makes the workers
desperate and restless since they are responsible to feed their families.

6. • According to the company’s balance sheet, the employment cost of the
company has decreased from 3.5% in 2001 to 1.9% in 2011. This was achieved
by lowering the number of permanent employees and increasing the number of
the contract workers and intensifying the work. While markets would think that
it is a very commendable job, however this was the root cause of the labour
problems in the company. The company has realised it now and in a statement,
Mr R.C Bhargava, the Chairman of MSIL has said that the company would
employ only permanent employees from March, 2013 onwards. We did some
calculations and found out, that if the company had made all the 2000 contract
workers permanent in the Manesar plant, it would increase the employment cost
of the company by 51%5
, while the profits of the company have increased by
2200% between 2001 and 2011. Therefore the employment cost of the company
would increase to 2.86% from 1.9% in 2011, which is 18% less than the 3.5%
employment cost that the company bore in 2001. This means that the increase in
employment cost is 1/440 times that of the increase in profits of the company!
Imagine how much would the company must have saved by employing contract
workers at rs.6000 per month. Obviously not much, but since the labour is a
variable component among the factors of production, the major cost cutting was
done in this segment.
3.5
1.9
2.86
0
2
4
2001 2011 Predicted Cost
Employmentcost
of MSIL 2001-2011
employment cost (% of the
total cost incurred by MSIL)
Employment cost of MSIL 2001-2011, Source: MSIL annual reports.
Therefore, the work for the workers was intensified, they were not being paid
well, and the company made humongous profits!
5
Calculation:
• 2000 contract workers x rs25,000 (the upper limit salary of a permanent employee including PF and
Gratuity) = rs5,00,00,000
• Total cost of paying all 2950 employees 25,000 = rs7,37,50,000
• Original Total employment cost of the plant when 950 permanent workers were paid rs25,000 +
(2000 contract workers x rs6000) = rs3,57,50,000
• Increase in cost: 7,37,50,000 – 3,57,50,000 x 100 = 51% increase in cost
7,37,50,000

7. • The company officials started a propaganda that it would shift the Manesar
plant to Gujarat, if the union doesn’t behave itself, this further created
restlessness and also social unrest among the workers, for whom, Maruti is the
only way to sustain their families. However, the claim is impossible, because
factories with such ultra modern technology requires very huge investments and
shifting the entire plant and rebuild it again in another state, would prove to be
very uneconomical for the Maruti Suzuki, and it would also increase the
manufacturing cost of the cars.
• The company has claimed that because of the labour unrests, Maruti is losing its
market share and profits. However the main reason for this is the fact that
Maruti has been facing severe competition from the many car brands that have
poured in the country today, like Ford, Volkswagen, Fiat, Honda, Hyundai, who
have successfully, launched many cars in the small car segment of the market.
• The company has also witnessed a dent in its profits due to depreciation of the
Indian rupee against Yen. Though large scale indigenization had taken place
after the liberalization of the economy in 1991, expensive components of the
cars still came from Japan; the depreciation of the rupee has increased the
import costs for the Maruti Suzuki.
Maruti Suzuki still pays a royalty of 5% on every car it manufactures which
comes to around 1369 crores per year to Suzuki Motor Corporation, due to
depreciation of the rupee; this cost of the company has increased as well.
Questions that should be asked
After gauging all aspects of the incident, the decisions that the management
took in the last 5 years and the impact of the economy’s performance on the
company, there are a few questions which have not been answered yet;

8. • Firstly, why were so many contract workers employed, when the company
could easily employ permanent workers without affecting its cost of production
and denting its profits in any way.
• Why does the company realise now that it should employ only permanent
workforce?
• Why were there bouncers in the factory premises? Was it to intimidate the
workers, as alleged by workers?
• Did they get permission from the Labour Commissioner office to enter the
factory premises?
• What was their background to qualify as bouncers? Their credentials has to be
explain to public at large?
• Why there are no reports on how many workers were injured in the mishap?
And how many bouncers were injured since the workers alleged they started the
rampage?
• How many managers were injured in the incident?
• Who deployed bouncers?
• There were reports that when the rampage started in the factory, the police was
on the factory gate. Who called the police before anything happened?
• Why was the police not called when the rampage started? Why the police did
not take control of the situation since it was already present at the site?
• There are about 114 workers in jail and are accused of murder, and more than
half of them were not even present when the rampage took place. Why have the
police arrested them without any evidence?
• The state government and the central government have no say in this matter,
why? The home minister of Haryana Gopal Goyal Kanda is himself a fugitive in
the Geetika suicide case, how can we trust criminals to tell us the truth? When
the leadership of the state home ministry was cloudy who works so closely with
the management, how can we trust the management of MSIL to give a correct
version of the incident, when we already see so many loopholes their story?
Firstly, that the supervisor did not verbally abuse the worker Jiyalal, but a lower

9. caste worker abused the supervisor who belongs to the higher caste. Secondly,
the management suspended the employee who was verbally abused, rather than
the supervisor who called him by a casteist name. Thirdly, the FIR filed by the
company has not even mentioned that the workers carried inflammable
substances to start a fire in the factory, then who did?
• The workers claim that they saw the HR manager Awnish Kumar leaving the
factory premises after the meeting at 7pm on 18th
July 2012, then who called
him back? Why did he come back? If he had left, how come his body was found
burnt beyond recognition in the conference hall of the Manesar plant?
• The management says that the whole alleged incident was planned by the
workers. How could this be true? Did the workers plan that the supervisor
would insult Jiyalal? Did the workers plan that the management would suspend
Jiyalal and not Shamsher Singh the supervisor?
• Since it was a rioting case, why no arrests were made from the other side?
• Why has the media not taken a more responsible role and tried to do a detailed
research on the incident, instead of just swallowing the company’s version of
the incident?
• Various solidarity actions and protest for the Maruti Manesar workers have
been organized Central Trade Union leaders, one such demonstration took place
in Mumbai on 13th
August 2012, where about 200 workers and labour activists
from various unions like that of Airport, Municipality, Reliance Energy,
Siemens, Oberoi Hotel, Otis, DHL, Shramik, TUCI, Hindustan Lever and NTUI
among others participated, which took place in front of the Maruti Suzuki
Regional Office at Bandra Kurla Complex. The senior leaders gave a
memorandum addressed to Maruti Suzuki’s Chairman, demanding lifting of the
lockout, reinstating the workers, releasing the arrested workers, conducting
judicial enquiry etc. This protest action has not been covered by the media.
Conclusion
The current scenario is nothing but the result of greed and an un-ethical
management of MSIL Manesar. The management employed contract workers in
large numbers, and then refused to take up their issues. Today after the mishap,

10. the company claims that it is losing rs75 crore per day6
and blames the workers
for the losses. However the policy decisions made by the HR department of the
company regarding employment have caused these losses. Now after suffering
incredible losses realises that they shouldn’t have employed contract labour and
claims to employ only permanent employees from March 2013, and build low
cost houses for them. The MSIL annual report claims that, ‘INDIA LOVES
MARUTI SUZUKI’, well the people of this country do love the brand, but does
MSIL loves its employees, because of whom they are able to make such huge
profits, who slog day and night so that the Manesar plant is able to manufacture
1400 cars in a day? With such faulty industrial relations strategy adopted by the
company, volcanic eruptions of this kind were expected. The management
should take the accountability of its weakness and bad decisions, instead of
blaming the workers for murdering someone and diverting the main issue. And
it is not even clear who were the culprits in the incident. The management
added fuel to the fire and the consequences were that everybody burned. This
mishap could be taken as a trailer of the big picture of labour problems in India.
6
The number of cars produced per day which is approx 1400 (which aren’t being manufactured because of the
lockout) x the cost of the vehicles.