Maruti strife: Management is out of sync with its workers

New Delhi: Is Maruti Suzuki India handling its labour issues badly? This question is unavoidable in the context of the ugly situation that developed again at Manesar (near Gurgaon, Haryana), which is facing violent labour trouble again. Last year, the company lost over Rs 2,500 crore of revenue due to prolonged labour strife. Its recurrence is indication that the management has still not been able to come to grips with the real issues on the shopfloor.

The reasons for fresh trouble, which broke out with physical violence between a supervisor and workers in the second shift yesterday (18 July), are surely not just the inability of either side to agree on wage revision. This could be the immediate cause, yes, but tensions have been simmering in the entire Gurgaon-Manesar belt for over a year now. And the issues at Maruti are getting global attention because of a more organised labour force at its facility compared to workers at nearby parts' suppliers and vendors and also because Maruti's troubles echo far and wide across the globe.

Last year, at the height of trouble when the company management was crying hoarse about its best management practices followed at its two facilities (it also has a facility at nearby Gurgaon), workers made a smart move - they had arranged a con-call with analysts for themselves! Here, I quote some lines from this unusual interaction, a first in corporate India: "In a shift of eight hours, we get two breaks of seven minutes each during which we have to take care of our loo and food requirements. And bus services to the Manesar factory have been withdrawn. Late comers are docked half a day's salary. And we have to roll out a car every 44 seconds..."

This was probably the brainchild of the then Maruti Suzuki Employees Union leader Sonu Gujjar who, by calling on analysts, gave a wide publicity to the best practices that Maruti follows. Gujjar has since been sacked with a hefty severance package. A new union - and registered - has been in place for some months now and, on the surface, things were going on smoothly. When workers spoke to analysts last year, the Maruti management had refuted each of these charges.

Company officials had said then that a seven-minute break twice a day is standard across all shop floors of Maruti in India and "adequate" for shopfloor workers; a new car rolls out every 44 seconds, not just from Manesar but also from Gurgaon and is as per standard procedure; bus services were withdrawn since worker leaders were using these buses to stoke the strike instead of arriving for work on time.

Aspirations have soared beyond what would have been considered a good wage anywhere till recently. Naresh Sharma/Firstpost

To be fair to the company, it pays workers a decent wage and offers them facilities on par with those in any surrounding factory. The new workers' union, which has been registered after consent from the management, has itself acknowledged that a permanent worker at Manesar receives a total remuneration of around Rs 18,000 every month that includes an incentive of about Rs 8,000. A Mint story in April said a casual worker gets Rs 7,000. The plant has around 3,000 workers, of which 900 are permanent. With Rs 18,000 a month as salary and Maruti Suzuki's shopfloor experience on his resume what else does a 28-year semi-literate from the rural belt of Haryana aspire for?

This is where partly the genesis of the problem lies. Aspirations have soared beyond what would have been considered a good wage anywhere till recently. Youth in villages which are just off the NH8 highway in Gurgaon have become rich overnight due to sale of agricultural land to builders who want to extend the Delhi-NCR far beyond upscale Gurgaon.The workers at Maruti see their friends driving swanky SUVs and luxury cars - cars that they make at Manesar and elsewhere - and this drives their aspirations further.

In the absence of land of their own, these youngsters want a quick rise to the top at the places where they work. Rising aspirations, however, have their limits on a shopfloor managed with tough industrial discipline. Many times, a curt word from the supervisor is enough to incite them into rebellion. At one point last year, these workers began introducing defects in cars to get their point across to the company management!

So, the mismatch between what the company expects from its workers and the aspirations of these workers has been a key element in Maruti's Manesar powderkeg. Little wonder then that the truce the new workers' union reached with the company management earlier this year has proved shortlived. In a statement released today, the workers alleged that a supervisor on the shopfloor abused and made casteist comments against a Dalit worker of the permanent category. This led to protests. "Instead of taking action against the said supervisor, the management immediately suspended the worker concerned without any investigation, as was demanded by the workers."

But in a tinderbox situation, anything can ignite passions. The real issue relates to skyhigh wage expectations.

In April this year, workers at the Manesar plant began talking of doubling salaries. The factory was rocked by a series of strikes between June and October last year, leading to a production loss of around 100,000 units and a revenue loss of at least Rs. 2,500 crore. The strike ended after the company agreed to consider the demands of the then unrecognised labour union at the plant. Manesar produces 1,200 vehicles a day in two shifts. During their 59 days of staggered strikes last year, workers had asked for a independent union (not affiliated to the mother plant at Gurgaon) and improved working conditions. To kill the long drawn out strike, Maruti had to eventually pay about Rs 16 lakh each to 30 workers whose services were terminated besides reinstating all the permanent workers along with 1,100 contract workers.

As per of the agreement brokered by the Haryana government, the company had agreed to set up a 'grievance redressal committee' and a 'labour welfare committee' but neither body has been established till date.

Clearly, one needs to also call into question how well Maruti has managed the human side of the equation after last year's dust-up.