Manesar Plant Issue

Powerpoint Templates
Page 1
Issue on Manesar
plant (Maruti Suzuki)
Team Members
• Athif
• Anil
• Afif
• Balu
• Basheer

Page 2
Maruti Suzuki India Limited
• Maruti Suzuki India Limited (MSIL) has been
established and incorporated since 1983.
• MSIL is a subsidy of the Suzuki Motor Corporation,
Japan.
• Maruti Suzuki has been renowned for producing
the most fuel efficient, affordable and reliable cars
and therefore has been the leader of the Indian
car market for over the past two and halve
decades.
• Manufacturing facilities are located at two facilities
Gurgaon and Manesar

Page 3
About Maruti Manesar Plant
oIndia's largest passenger car company, accounting for
over 45% of the domestic car market
oFirst company in India to mass-produce and sell more
than a million cars
oAnnually exports more than 50,000 cars
oIt offers 14 brands and over 150 variants ranging from
peoples car Maruti Alto 800 to the stylish hatchback Ritz

Page 4
What Happened In Manesar Plant
On 18th July 2012 at Maruti‟s labour plant, industrial
disputes broke out when workers became aggressive
and over 96 staff members were injured while also
leading to the death of a human resource manager.
More then two-thirds of the employees were
involved in the strike, causing Maruti to lose about
INR 75 crores ($11.81 million) in revenue and INR 8
crores ($1.3 million) in operating profit daily while also
halting Maruti‟s production line causing it to lose
around 1200-1400 units daily.

Page 5
Development of the
Strike
•The company knew that trouble was brewing, they
knew that some workers planned on registering a
separate union and the company had already
prepared legal documents for a possible expulsion of
workers from the premises.
•Maruti Suzuki management tried to back a single
union, the Maruti Suzuki Kamgar Union, for both
Gurgaon and Manesar plant.
• This union had been set-up by forces close to
management after the lock-out at Gurgaon plant in
2000/2001.

Page 6
Development of the
Strike
•“On 3rd of June, eleven leaders of the workers went
to Chandigarh to meet the Labour Department to
complete the formalities regarding registration of our
union on June 3, 2011. On the morning of that day,
the labour department officials faxed the news of our
application to the management.
•On the morning of June 4, 2011, through struggle,
we were able to retrieve some of the blank signed
papers from the management. By the afternoon, it
became clear that the management was using all
kind of tricks to break our unity. In such
circumstances, we were forced to go on flash tool
down strike from the afternoon of June 4, 2011.”

Page 7
Development of the
Strike
•On the 4th of June after the change between
morning and late shift around 2,000 workers stop
work and remain in factory. Later on, the C-shift
would not be refused entry by management and
these workers largely remained outside the factory.
•During this initial stage, workers raised various
issues and demands: low wages, incentive cuts, few
breaks. The workers have demanded that the
temporary workers should be given preference for
permanent posts in new departments, which the
company is currently building on the premises.

Page 8
Causes
Differences in salary pay
Working Conditions
 Unions generally limit themselves to acting as a
voice of permanent employees
Demand for a new union

Page 9
Impact on Company
• Operations stopped for a month.
• Loss estimated to be over Rs. 1,500 crore
• Fear of insecurity to the employees and their families
• Problem of lack of labor resource
• Maruti changed its recruitment policy
• GOODWILL….

Page 10
Impact on Economy
Large labor- unemployed
GDP affected
Loss of country resources
Disturbance- affecting the common man

Page 11
Problems
 Lack of communication between HR people and
labour
 Lack of coordination between labour union and HR
department

Page 12
Causes

Page 13
PROBLEM FROM WORKERS VIEW
POINT
“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

Page 14
POINT
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 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.
One second late into punching-card entry is a day‟s wage cut,
but they have to give full production for that day too.

Page 15
POINT
Forced to fill an undertaking form, which means that in case
of any problem, workers cannot raise any objections against
management.

Page 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

Page 17
MANAGEMENT VIEW OF
PROBLEM
“ Unhappy workers have found out a new way to
disrupt ongoing work at the plant by creating serious
defects in quality of the cars, so they would fail the
compulsory vehicle inspection (VI) quality test.”

Page 18
MANAGEMENT VIEW OF
PROBLEM
 Workers indulging in deliberate attempts to reduce output
and are compromising customer interests
Revenge for the June strike.
Refused to sign good conduct form which aims at ensuring
the production of good quality products.
Employees are being charged with sabotage and causing
quality problems in the cars produced.

Page 19
MANAGEMENT VIEW OF
PROBLEM
"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.

Page 20
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‟

Page 21
ACTION TAKEN AGAINST
EMPLOYEES
 The company terminated 11 workers and suspended
38 on August 29th and 30th on false charges demanding
a „good-conduct bond‟ with the state police and
administration, the media, and „bouncers‟ on its payroll as
its willing pawns.
 The Maruti Suzuki Employees Union (MSEU) is
demanding as an immediate measure, the withdrawal of
the charge-sheet, termination, suspension of the 49
workers. The workers are sitting day-and-night at the
factory gate, peeling off the layers of Maruti Suzuki‟s
“way of life”.

Page 22
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.

Page 23
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.

Page 24
For Managers….
• They have to Properly Co Ordinate with each
other
• Proper rules for indiscrimination in salary
• They have to control the public pokers
• They should try to understand the labour‟s
problem

Page 25
Improved hygienic conditions at workplace
reduces employee‟s dissatisfaction

Page 27
Employee rights in
Manesar
Labour Law
A minimum time rate of wages
A minimum piece rate
Non-Discrimination of people at Workplace.
Local Hiring
Leave without wages
Working hours, holidays and overtime

Page 28
Employee rights in
Manesar
Labour Laws tweaked by Maruti
Enforcement of the Labour Laws was not followed strictly.
Differences in Salary Pay.
Working Conditions.
Lack of proper negotiations.

Page 29
Employee rights in
Manesar
Necessary changes done after the event
Hiring contract workers through company HR and not
through a contractor.
Reopened the plant with 300 workers
Fresh recruitment of permanent workers
Terminate the services of 500 permanent workers.
(Involved in Violence)

Page 30
What could had been done in
order to avoid the
event
Employee Labour Relationship should had been
maintained in decorum.
Flexibility is the key, not the cheapness.
Treat workers in the factory like humans.
The workers should refrain from taking law into their own
hands.
This would be a wrong reading. Companies hire
temporary (temps) and contract workers not only
because they are cheaper, but because they can be laid
off when they are not required. Flexibility is the key, not
the cheapness.

Manesar Plant Issue

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