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The Maruti Manesar Crisis



2013 Opportunities Growing automotive manufacturing industry in India Expansion of product portfolio through launch of new models Threats Increasing competition Environmental regulations Increasing interest rates .SWOT Analysis Strengths Strong domestic player Robust brand image Extensive distribution network Strong parent backing Weaknesses Labour unrest dampening company's financial health and production Lapses in product quality impacts the reputation Market-line Report Feb .

Hierarchy Structure Of Organization .

but never of such scale and violence. including two Japanese expatriates.Background    On 18th July 2012. The incident is the worst-ever for Suzuki since the company began operations in India in 1983. A caste slur (later discredited) by a supervisor against a worker ii. . auto factory workers in Maruti's Manesar plant attacked supervisors and started a fire that killed a company official and injured 100 managers. Failed negotiations about employee regularization The company has faced several incidents of employee protest. The attack was allegedly influenced by: i.

 .  2 Japanese officials were injured.  The violent mob injured 9 policemen.  The hands & legs of the HR Manager Awanish Kumar Dev were broken. & the building was set ablaze and was charred to death. as a result he could not move.Incidents Workers started a fire.  Factory building and many cars were burnt. that killed the HR Manager and 100 injured.

workers were increasingly frustrated over their inability to exercise their constitutional rights and the demand of equal pay for equal work was falling on deaf years. .Background    The events of 18 July in the Manesar plant were not a sudden conflagration. Anger at the plant had been building up for months over the management’s refusal to recognise an elected union.

Workers’ Demands      Recognition of an elected union The long-term settlement should be implemented for all casual and contract workers too A supervisor had abused and made discriminatory comments to a low-caste worker Withdrawal of suspension order of a worker Harsh working conditions and extensive hiring of lowpaid contract workers .

their supposed hotheadedness and impatience. the expression of their demands and their discontentment. and their demands for better wages . their lack of experience as many are first-generation industrial workers. their aspiration to be upwardly mobile and to have the capacity to indulge in consumerism. their youth.Causes  Lack of maturity among these workers.

influence and money power. .Causes  It has been repeatedly made clear to the workers that they were up against the collective might of a huge corporate like Maruti Suzuki with its clout. and a collusive labour department of the state government who were determined to thwart the exercise of the workers’ constitutional right to freedom of association.

Causes   Managers and labour officers. who regularly visited the shop floor in Manesar. Instead the Maruti Suzuki management escalated tensions by trying to intimidate the union leaders to agree to its terms – no collective bargaining and no serious discussion on the charter of demands . were fully aware of the mounting concerns. anger and frustration of the workers and yet did nothing to address and defuse the situation.

Lockout was called & payment for employees. . The recorded CCTV footage has been used to determine the sequence of events and people involved.After Effects       An FIR was filed with the police. All work at Manesar plant was suspended indefinitely. The shut down of Manesar plant lead to a loss of about Rs 75 crores per day. 91 employees were arrested & 55 accused were searched.

Nakanishi. He said that he will de-recognize Maruti Suzuki Workers’ Union and dismiss all workers named in connection with the incident. managing director and chief executive of Maruti Suzuki India declared a lockout saying that safety is more important than business.Action Taken By The Management     S. He also announced Maruti plans to continue manufacturing in Manesar. Nakanishi went to each victim apologizing for the miseries inflicted on them by fellow workers. . Mr.


Trade unions must also introspect on how they are failing the new generation of workers and new formations of labour. .Conclusion   The management must recognise the right to form a union (along with the right to affiliate with any central trade union if they choose to) and the right to equal wages and benefits for equal work and an end to discriminatory wage systems and wage theft.