Maruti's VR scheme: Is corporate governance at stake again?

Workers at Maruti Suzuki are likely to protest further against the unsatisfactory resolution to the recent labour unrest, which is likely to delay deliveries of diesel cars like the Suzuki Hatchback and the Dezire, reports the Economic Times.

“The SPIL workers are peeved at the management’s failure to reinstate their three union functionaries and arrive at a final settlement to their due wage revision,” says the report.

Earlier because of a labour unrest at its Manesar plant, the company witnessed a slowdown in auto sales and its net profit slumped 60 percent year-on-year to Rs 240.4 crore, which was way lower than estimates.

In order to end this crippling 90-day strike, the management has deployed a voluntary retirement scheme (VRS) once again.

Although a VRS is used to cut costs, Maruti Suzuki’s offer to suddenly deploy it to get rid of troublemakers at its Haryana plant has raised several questions.

According to CNBC TV 18’s Swati Khandelwar and Shereen Bhan, the auto major has seen 30 of its most trouble some workers take the golden parachute at a cost of just under Rs 5 crore.

“There was an inquiry against 30 of us, and we knew the outcome. So, all 30 of us decided to take the money from the company. We were not willing to fight with the company. There is nothing to hide as far as the amount received goes. All 30 of us got Rs 16 lakh each,” said Shiv Kumar, union leader and former president of Maruti Suzuki Workers Union to CNBC TV 18.

But after suffering production losses worth Rs 2,000 crore was the management right in paying off these employees?

To know more watch the video below: