MARUTI UDYOG LIMITED INDUSTRIAL UNRESTS

PRESENTED BY, 3 11 S M 1 0 O 8 - A R S H A D J A M I L 3 1 1 S M 1 0 1 7 - S U M A L I N N AYA K 3 1 1 S M 1 0 1 8 - A N I M E S H PAT I 3 1 1 S M 1 0 1 9 - M A D H AW I R A J A N 3 1 1 S M 1 0 2 2 - S O U M YA R N . S A H U

Company Profile
 In 1981 MUL was incorporated as a joint venture of the Indian   

government and Suzuki Motor Corporation . Initial plan was to make produce small fuel efficient cars. Most popular small car-Maruti 800 started in 1983, which stayed as main product even after 17 years of its launch. In 1997 the market share was 82%. Maruti launched all terrain vehicle-Gypsy in 1985, Maruti 1000 in 1990 and Zen in 1993, also had added Esteem, Alto, WagonR, Omni CNG cab. In 1986 the company started the exports of cars. MUL employees more than 5500 employees, among these 4500 are engaged in production at Gurgaon plant and the average of workforce was nearly 36 years.

MUL was incorporated. 1981. India’s first affordable car       was produced.000 units. a 796 cc was in production. Omni. .  1982 • Stepped into a 50-50 JV with SMC of Japan. 1992 • SMC increases its stake to 50 per cent.000 units.000 vehicles (cumulative production). a 796 cc. 1987 • Exported first lot of 500 cars to Hungary. 1985 • Launch of Maruti Gypsy 1986 • Produced 100.  1983 • Maruti 800. 1988 • Installed capacity increased to 100. 1984 • Installed capacity reached 40.

2000 • IDTR (Institute of Driving Training and Research) launched jointly with Delhi government to promote safe driving habits. 1996 • Launch of 24-hour emergency on-road vehicle service.1994 • Produced the 1 millionth vehicle since the commencement of production. 1997 • Produced the 2 millionth vehicle since the commencement of production. 1998 • Launch of website as part of CRM initiatives. . 1995 • The installed capacity reached 200.000 units.

2003 • Production of 4 millionth vehicle. the highest ever since the company began operations 20 years ago. • Listed on BSE and NSE after a public issue oversubscribed 10 times. Bangalore. 2004 • Maruti closed the financial year 2003-04 with an annual sale of 472122 units.2 per cent.2001 • Launch of customer information centers in Hyderabad. 2002 • SMC increases its stake to 54. and Chennai. .

.  SMC could bargain for 40% equity up from 26% in 1987.which further went up to 50%in 1992.Improvement of MUL  In 1998-99 the productivity went up to 70 cars per employee from 25 cars per employee per year in 1988.

Hyundai and Telco introduced small cars segments. MUL was exposed to various competition in the late 1990s from the new entrants such as GM.20.  MUL had an installed capacity of 3.  The company’s competitor Daewoo was located at Surajpur. in Western India. Daewoo.COMPETITIVE STRATEGY  As the largest manufacturer of India. Mitsubishi and Telco. Hyundai. Hyundai Motors at Chennai and Telco at Pune. nearly 75 km from Gurgaon. . so far the monopoly segment of MUL.000 units per year and had its plant located at Gurgaon one of the prime industrial belts of North India. Ford.  Daewoo.

usage varies from more than 90% to 75% in different models.BUSINESS STRATEGY  Value for money at low cost  Large volume for economies of scale  Main focus was on indigenous components.  Network of ancillaries to meet the demand : 400 vendors  Distance between the service centers(25 kms) on all the National Highways in 2001 .

joined in 1999. . Shiv Sena and also with the Minister of Heavy Industries.CITU Abraham Mathew. HMS.INTUC. known for his good relations with CPI. a management graduate was the head of HRM at MUL. Manohar Joshi Dinesh Kumar was the President of the union Asim Talukdar.INDUSTRIAL RELATIONS  The President of MUEU(Maruti Udyog Employees Union) had     excellent relations with Bhaskaraddu MUEU was not associated with any of the trade unions like AITUC. was the General Secretary.

Planning of imposing tough condition. .INDUSTRIAL CONFLICTS  MUL’s pay was more towards Talukdar but not     towards workers. Suspended 9 employees. New incentive scheme was not satisfactory. Reduce work force.

33767. 600 million per annum MUL hired workers from some of its vendors.5000 per month MUL called back about a dozen non-production who were sent to Suzuki’s facilities in Japan as part of a 120-strong contingent for training . 2. The company also called back nearly 1200 apprentices. 2690 per car at Maruti and Rs. T his would mean an extra burden of Rs.1617 per car for Hyundai Management agreed to increase average cost to company per employee to Rs. Management was keen to reduce labor cost per car. 4.Management’s decisions 1. which is Rs. These apprentices were paid Rs. 3.

Union demanded withdrawal of the good conduct notice before negotiating on other issues Union asked for reinstatement of all the employees who were either suspended or removed Union asked for improved incentive scheme .Union’s interest 1. 2. 3.

Started one month before the election of labor union and after announcement of setting up a new plant in Gujrat.MARUTI SUZUKI KAMGAR union. 2000 workers Incurred a loss of 6 billion. .Strike In Manesar(2011)  Strike period.4th to 17th june 2011  Strike took place with out notification to     management. Existing union.

incentives cuts.  8th june. few breaks. .management forced all employees to sign in blank papers. CITU. UTUC… and other 10-15 companies).Contd….  Low wage. HMS.other union joined(AITUC. 250 workers left job due to mistreatment of management. Manesar Reason of the strike 3rd june. INTUC.  Temporary worker’s conformation.

MARKET SHARE OF MUL(2000-2010) in thousands  2000-168(300)  2001-146(275)  2002-137(280)  2003-151(285)  2004-179(350)  2005-214(420)  2006-234(450)  2007-253(490)  2008-276(520)  2009-303(595)  2010-365(675) .

69 .54  Mahindra & Mahindra 6.71  Ashok Leyland 7.89  Tata Motors 5.LOWEST WAGE RATIO OF INDUSTRY Wage bill as a % of Net Sales  Maruti Udyog Limiteed 1.

.  Ownership at low price.  2628 authorized service centers.Strengths  High labor productivity  Introducing new models  One Stop Shop  Low Cost Maintenance Advantage  Driving School-Available in all major cities. Lady trainer for lady customer.

 Comparatively new to diesel cars. .  Lack of experience with foreign market.WEAKNESS  Changing customer’s preference  Faced many strikes for labor satisfaction  Stop in production and loss of many man-hours.

.  Population growth  Customer’s satisfaction  Popularity.Opportunities  Increasing middle class income.

 Competition of second hand cars. .Threats  Fuel price  Threats from Chinese cars manufacturers.

.  Management control and equity control problems should be solved.  Incentive schemes should be revised every year as market demand is very dynamic.  Concentrate more on production.  Should try to develop its own technology and enjoy its profit completely.Strategies to be adopted  Negotiation between employer and union leader.

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