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Abstract In 2009, labor unrest started in the Manesar plant of Honda Motorcycle & Scooter India Ltd.

(HMSI), the Indian subsidiary of the Japan-based Honda Motor Company. The workers allegedly resorted to a job slowdown and other tactics to push for higher wages and perks. Issues » Labor/industrial unrest. » Labor/industrial dispute. » Strike and job slowdown. Introduction Labor unrest, which attracted a lot of media criticism against Honda Motorcycle & Scooter India (Private) Ltd. (HMSI), the Indian subsidiary of the Japan-based Honda Motor Company Ltd. , in 2005, again raised its head at the company’s Manesar plant in the year 2009. Questions for Discussion  In light of this case, discuss the issues and challenges faced by organizations witnessing labor unrest. How can labor disputes be resolved?  Critically analyze HMSI's decision to set up a plant outside of Haryana. Do you think the company could benefit from such a move considering that labor unrest is widespread in India?

Labor Unrest at Honda Motorcycle & Scooter India (Private) Limited
The case study focuses on the HR problems faced by Honda Motor Cycle & Scooters India (HMSI). The case discusses the various reasons which led to the dispute between the management and employees of HMSI. It elaborates the incidents, which led to the strike at the company that resulted in HMSI workers being severely beaten up by the police. Labor strife and the management's inability to deal with it effectively had resulted in huge losses for the company due to the fall in the production level at the plant. In addition to this, the company also received a lot of negative publicity as newspapers and TV channels gave wide coverage to the violence of the action. The case highlights the growing number of instances of clashes between the employees and the management of companies in India, which is often guided by external parties such as trade unions and political parties.

» Understand the factors that lead to labor unrest at a factory and the impact of such incidents on the employees and the company. » Study HR policies adopted by organizations to prevent labor unrest at the workplace. » Examine top management's role in maintaining a peaceful working environment. » Analyze the role of external parties such as trade unions; political parties etc., in disturbing the working environment in a company


Introduction Background Note Labor Unrest at HMSI The Blame Game Violation of Laws?

Workers' compensation. 2005. His idea was to develop and later produce small two-cycle motorbike engines.. Background Note HMCL Soichiro Honda. and newspapers and TV channels gave wide coverage to the violence of the action. 1999. Apparently there was a show of strength between the management and the workers. Trade union.. the workers tried to form a trade union and this resulted in a confrontation with the management.The Aftermath Could this Ugly Situation have been Averted? Exhibits Key Words: Labor unrest. which covered the basic wage structure and detailed parameters specifying the work conditions for workers. was produced in 1947. even without any direct request from the company's management (Refer to Exhibit I for some images of violence during the HMSI protest). a mechanical engineer. HMSI HMSI was established on August 20. Lock-out. In December 2004. Fair wages. Strike. the management of the Honda Motorcycle & Scooter India (Private) Limited. a wholly-owned subsidiary of Honda Motor Company Limited (HMCL). 2005.. established the 'Honda Technical Research Institute' in Hamamatsu. HMSI workers were severely beaten up by the police. the company started to design and produce lightweight motorcycles. . Labor Unrest at HMSI The Gurgaon plant of HMSI had peaceful labor relations for the first few years after it was set up in October 1999. HMCL made an initial investment of Rs. The protest followed six months of simmering labor unrest at the HMSI factory in which the workers also resorted to job slowdown (since December 2004 when the workers' demand for an increase in wages was rejected by the HMSI management). (HMSI). Collective bargaining. the D-type two-stroke 98cc. an A-type 50cc bicycle engine. The management entered into labor contracts with individual laborers. the workers at HMSI's Gurgaon plant started demanding that the management increase their wages commensurate with the company's growth in the market. Japanese management. Industrial relations. the incident brought to the fore the need to maintain sound industrial relations to ensure productive and profitable operations.. This led to police intervention and a violent tussle ensued between the police and the workers in which workers protesting peacefully were also beaten up. Honda Introduction On July 25.. Japan.000. Honda's first motorcycle. encountered violent protests from workers that disrupted production at their plant in Gurgaon. Honda's first product. On July 25. Root cause analysis. Industrial dispute. in 1946. While the management alleged that the workers were resorting to 'go-slow' tactics and were threatening not to return to work until their colleagues had been reinstated. Fifty workers of the production team were suspended and four others dismissed in May 2005. Thereafter. was produced in 1949.. 3 billion to establish the plant which had an annual production capacity of 200. With their demands being rejected by the management. the workers of the plant were demanding reinstatement of the suspended employees when some workers allegedly attacked policemen on the plant premises. the workers alleged that the management was using pressure tactics such as victimization of active union members and a 'lock-out' to break the back of the union. The police were reported to have overreacted and it was alleged that they had been overzealous in protecting the interests of the HMSI management. labor laws. Labor relations. For companies. Go-slow. HMCL was incorporated with a capital of ¥ 1 million. In 1948. and a plant was set up at Manesar to manufacture two-wheelers for the Indian market.

Exhibits Exhibit Exhibit Exhibit Exhibit I: Some Images of Violence during the HMSI Protest II: Some More Glimpses from the HMSI Incident III: Laws Related to Welfare of Workers in India IV: Root Cause Analysis for Labor Unrest . while the workers insisted that there had been no indiscipline on their part and that the management was bringing up this issue only to prevent the formation of a trade union at HMSI. 2005.. companies should be prepared to trace the root cause of the problem and solve it. They alleged that HMSI's management had violated certain laws relating to the welfare of workers (Refer to Exhibit III for laws related to welfare of workers in India). The Aftermath HMSI was established on August 20. It was reported that a worker had allegedly been kicked by a Japanese manager on the shop floor in December 2004.The Blame Game The management and the workers traded allegations and counter allegations on what the root cause of the dispute was.. The services of four other workers who had come to his rescue were allegedly terminated. They blamed each other for the situation that ultimately took an ugly turn on July 25. Violation of Laws? Some analysts charged that the incident was fallout of the long-term oppression and malpractices at the Gurgaon factory by the HMSI management. The management held the workers responsible for indiscipline and for slowing down production.. and as such.. Could this Ugly Situation have been Averted? Several factors can lead to a conflict between the workers and the management of any company.. 1999.000. and a plant was set up at Manesar to manufacture two-wheelers for the Indian market. 3 billion to establish the plant which had an annual production capacity of 200. the management and the workers of any company could avoid incidents such as the one at HMSI (Refer to Exhibit IV for the Root Cause Analysis for Labor Unrest). HMCL made an initial investment of Rs. Industry experts opined that with proper understanding of the industrial laws and causes of disputes....