The document summarizes the crisis at Maruti Suzuki's Manesar plant in 2011. Workers went on strike to demand the recognition of an independent union. This led to production losses of over 90 million dollars. Issues included differences in pay and working conditions between plants, as well as disciplinary actions like wage cuts. The strikes had consequences like poor quality control and dispatch numbers. Solutions involved identifying the root causes, improving sanitation, and allowing unions to form with management oversight.

1. P R E S E N T A T I O N B Y –
V A N S H D H A L L
K A M A K S H I K A P O O R
J A G T A R S I N G H
K S H I T I J
B H A T N A G A G A R
M A Y A N K L A K H E R A
CRISIS AT MARUTI
SUZUKI’S MANESAR
PLANT
1

2. TABLE OF CONTENTS
S.NO. CONTENTS SLIDE NUMBER
1 OVERVIEW 3
2 PROBLEM 4-11
3 CONSEQUENCES OF STRIKE 12-13
4 LABOUR LAWS 14-15
5 WORKERS DEMAND 16
6 ACTIONS TAKEN 17
7 FACTS 18
8 LOSS DUE TO STIKES 19
9 SOLUTION 20-25
2

3. OVERVIEW
 India's largest passenger car company, accounting
for over 45% of the domestic car market
 First company in India to mass-produce and sell
more than a million cars
 Annually exports more than 50,000 cars
 Manufacturing facilities are located at two facilities
Gurgaon and Manesar
 It offers 14 brands and over 150 variants ranging
from peoples car Maruti 800 to the stylish hatchback
Ritz
3

4. THE PROBLEM
4

5. PROBLEMS (Workers view point)
 Registration of new union- (MSEU)- Independent for
manesar Plant
 Differences in salary pay between two plants workers-
Gurgaon & Manesar
 3500-4000 workers employed in factory, but their status
differ significantly (Working Conditions).
 Few minutes late One day’s wage cut of Rs.1500, two days
Rs.2200, three days cut of Rs.7-8000 is implemented, so
that almost the total month’s wage is cut.
 Good Conduct Bond.
 Production Capacity of Maruti has gone up from10lakh units
in 2009-10 to 12.7lakh units 2010-11
 3rd June Process of registration Denied, 4th June Strike.
5

6. CONTD.
 Revenge for June's strike.
 Cockroaches and dead flies found in the food in the hurried lunch-
break that workers earn in the canteen ½ km from the working
station.
 The tea was without tea leaves or sugar in the 7 minute break
 The company doctor give heavy doses of ‘instant’ medicines even on
minor complaint so that disruption of work could be prevented.
 One second late into punching-card entry is a day’s wage cut, but they
have to give full production for that day too.
 Forced to fill an undertaking form, which means that in case of any
problem, workers cannot raise any objections against management.
6

7. Worker’s Statement
 “If the floor supervisor is rude and even slaps us, he
is awarded with a promotion but in case a labourer
dares to reply, he is issued a notice on grounds of
disciplinary action," said Rajender Kumar, a
technician
7

8. PROBLEMS (Management view point)
 New Union will bring a third party-political party
 No clear demand
 Lack of discipline
 Accept and signed the “Good Conduct Bond”
 Workers indulging in deliberate attempts to reduce
output and are compromising customer interests
 Revenge for the June strike.
8

9. Management’s Statement
 "In the last three days, a series of serious quality
problems have been observed in the vehicles
produced. For example, vehicle door was not
properly clamped leading to doors falling during
production, wiring harnesses were found cut in
produced vehicle, dents were noticed on the body
and critical components were not fitted on to
vehicles. Such deliberate acts, if not detected during
quality checks, would have led to serious
implications and directly harmed customers," a
senior company official said.
9

10. Problems resulted into strike on 4th June 2011(Reasons)
 The workers gave no notice to management, they stopped
production completely and around 2,000 workers stayed inside
the factory for nearly two weeks.
 Workers wanted to register new Union.
Workers Demands:-
 A Five-fold increase in Basic salary
 A monthly conveyance allowance of 10,000
 A laundry allowance of 3000
 A Gift with every new car launch
 A house for every workers, and a house with cheaper home
loans
 Normal weekend/holidays, with four Paid weeks of vacation be
increased to 7 weeks.
10

11. Outcome
11

12. Consequences of Strike
 Estimated loss of more than 90 million dollar.
 On August 24, 1,230 cars were planned to be produced, but
only 437 were assembled. Out of which, just 96 cars could
pass quality check.
 Halt in production on the 5th September, around 4000
workers rallied till the highway to block it.
 Poor dispatch numbers with respect to meeting targets and
quality control
 With only around 20-25 of 950-odd workers agreed to sign
the “Good Conduct” undertaking
 Production was stalled as the company barricaded various
entrances to prohibit entry of those who refused to sign the
'good conduct bond'.
12

13. What Went Wrong ?
1. Workers are not commodities.
2. Trust and Confidence between “White and Blue
collars”.
3. Strike is ethical, whereas deliberately creating
faults in Products is not
4. Politics has no place in unions.
5. No unnecessary comment in Media.
6. Lure of Contract Labor.
13

14. Labor Laws in brief
 A minimum time rate of wages.
 Non-discrimination of people at work place.
 Local Hiring.
 Leave without wage cut/ Paid leaves.
 Working hours, holidays and overtime.
14

15. Labor laws tweaked by Maruti
 Enforcement of labor law was not followed strictly.
 Labor laws need to be followed but only on
humanitarian grounds.
 Differences in salary pay.
 Working conditions.
15

16. WORKER’S DEMAND
 Worker’s demand to establish an independent union
Maruti Suzuki Employees Union (MSEU)in the
company.
 Currently, the company has one recognized union –
Maruti Udyog Kamgar Union which is dominated by
workers at the Gurgaon plant
16

17. ACTION TAKEN AGAINST EMPLOYEES
 Suspension of 10 workers
 Dismissal of five
 Discontinued the services of six trainees.
 Also suspended four workers for "instigating indiscipline" a
week before
 Another four suspended in late July for manhandling
supervisors.
 Charges of sabotage and causing quality problems in the cars
produced.
 On 14th August; police force of 500 send to occupy the factory
to ‘prevent violent activities’
17

18. Facts
 June 2011 –
1) 13-days strike demanding the recognition of the MSEU at the Manesar plant
2) Production loss of 12,600 cars, valued at about Rs 630 crore.
 July 2011–
1) Production stopped for a day at the same plant because of strike by some
workers.
 August 2011–
1) Reported 12.74 per cent fall in sales for August to 91,442 as compare
to the sale of 1,04,791 units in the same month last year
 September 7 2011
1) Loss suffered is estimated at about 8,550 units, valued at about Rs 425 crore.
Source: Economic Times
18

19. Loss due to strike
 Third production halt in three months at Manesar.
 The company stopped operations for 10 working days in
June
 The firm lost Rs 400 crore because of the strike.
 Fall in Shares: Shares fell as much as 2 per cent on the
news to close at Rs 1,080 on the Bombay Stock
Exchange.
19

20. Solution
 Identified reasons of the conflict.
1. Establishment of separate union for Manesar Plant
2. Code of Conduct- Falling standards of
manufacturing.
3. Basic sanitary enhancements demanded by the
workforce.
20

21. Trade Union Establishment
 Trade union would be established with prior
conditions: -
1. Members of the trade union to be nominated with
consent of both workers and management.
2. The leader of this union would be appointed by the
management.
 If not agreed then management would move to
plan B.
1. Technology oriented operations reducing demand
of man power.
21

22. Code Of Conduct And Sanitary Problems
 ADOPT CHANGE PROCESS THEORY
 Unfreezing
 Change through cognitive restructuring
 Refreezing
22

23. Improved hygienic
conditions at
workplace reduces
employee’s
dissatisfaction
23

24. Scope of the Further Studies
 580 workers sacked and 110 are behind bars, who
were involved in the violence
 15 legal Trade Unions have been set up for all the 9
plants
 The company has made 49% salary hike
 800 robotic manufacturing in assembly by 2015
 New plant to be set up in Ahmedabad
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25. References:-
 http://sanhati.com/excerpted/3887
 www.ijaiem.org/volume2issue11/IJAIEM-2013-11-
26-077.pdf
 www.marutisuzuki.com/plant-address.aspx
 www.ndtv.com
 labour.gov.in
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