Maruti case_LAB_Group 4 final

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PRESENTATION BY –VANSH DHALLKAMAKSHI KAPOORJAGTAR SINGHKSHITIJ BHATNAGAGARMAYANK LAKHERA

CRISIS AT MARUTI SUZUKI’S MANESAR

PLANT

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TABLE OF CONTENTS

S.NO. CONTENTS SLIDE NUMBER

1 OVERVIEW 3

2 PROBLEM 4-11

3 CONSEQUENCES OF STRIKE 12-13

4 LABOUR LAWS 14-15

5 WORKERS DEMAND 16

6 ACTIONS TAKEN 17

7 FACTS 18

8 LOSS DUE TO STIKES 19

9 SOLUTION 20-25

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OVERVIEW

India's largest passenger car company, accounting for over 45% of the domestic car market

First company in India to mass-produce and sell more than a million cars

Annually exports more than 50,000 carsManufacturing facilities are located at two

facilities Gurgaon and ManesarIt offers 14 brands and over 150 variants ranging

from peoples car Maruti 800 to the stylish hatchback Ritz

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THE PROBLEM

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PROBLEMS (Workers view point)

Registration of new union- (MSEU)- Independent for manesar Plant

Differences in salary pay between two plants workers- Gurgaon & Manesar

3500-4000 workers employed in factory, but their status differ significantly (Working Conditions).

Few minutes late 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.

Good Conduct Bond.Production Capacity of Maruti has gone up

from10lakh units in 2009-10 to 12.7lakh units 2010-113rd June Process of registration Denied, 4th June Strike.

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CONTD.

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 second late into punching-card entry is a day’s wage cut, but they have to give full production for that day too.

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

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Worker’s Statement

“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

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PROBLEMS (Management view point)

New Union will bring a third party-political party

No clear demand Lack of disciplineAccept and signed the “Good Conduct

Bond”Workers indulging in deliberate attempts to

reduce output and are compromising customer interests

Revenge for the June strike.

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Management’s Statement

"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.

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Problems resulted into strike on 4th June 2011(Reasons)

The workers gave no notice to management, they stopped production completely and around 2,000 workers stayed inside the factory for nearly two weeks.

Workers wanted to register new Union.

Workers Demands:-A Five-fold increase in Basic salaryA monthly conveyance allowance of 10,000A laundry allowance of 3000A Gift with every new car launchA house for every workers, and a house with cheaper

home loansNormal weekend/holidays, with four Paid weeks of

vacation be increased to 7 weeks.

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Outcome

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Consequences of Strike

Estimated loss of more than 90 million dollar.On August 24, 1,230 cars were planned to be produced, but only 437

were assembled. Out of which, just 96 cars could pass quality check.Halt in production on the 5th September, around 4000 workers

rallied till the highway to block it.Poor dispatch numbers with respect to meeting targets and quality

controlWith only around 20-25 of 950-odd workers agreed to sign the

“Good Conduct” undertakingProduction was stalled as the company barricaded various entrances

to prohibit entry of those who refused to sign the 'good conduct bond'.

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What Went Wrong ?

1. Workers are not commodities.2. Trust and Confidence between “White

and Blue collars”.3. Strike is ethical, whereas deliberately

creating faults in Products is not4. Politics has no place in unions.5. No unnecessary comment in Media.6. Lure of Contract Labor.

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Labor Laws in brief

A minimum time rate of wages.Non-discrimination of people at work place.Local Hiring.Leave without wage cut/ Paid leaves.Working hours, holidays and overtime.

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Labor laws tweaked by Maruti

Enforcement of labor law was not followed strictly.

Labor laws need to be followed but only on humanitarian grounds.

Differences in salary pay.Working conditions.

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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

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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 beforeAnother 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’

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Facts

June 2011 – 1) 13-days strike demanding the recognition of the MSEU at the Manesar plant 2) Production loss of 12,600 cars, valued at about Rs 630 crore.

July 2011– 1) Production stopped for a day at the same plant because of strike by some workers.

August 2011– 1) Reported 12.74 per cent fall in sales for August to 91,442 as compare

to the sale of 1,04,791 units in the same month last year September 7 2011

1) Loss suffered is estimated at about 8,550 units, valued at about Rs 425 crore.

Source: Economic Times

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Loss due to strike

Third production halt in three months at Manesar.The company stopped operations for 10 working days

in JuneThe firm lost Rs 400 crore because of the strike. Fall in Shares: Shares fell as much as 2 per cent on the

news to close at Rs 1,080 on the Bombay Stock Exchange.

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Solution

Identified reasons of the conflict.1. Establishment of separate union for

Manesar Plant2. Code of Conduct- Falling standards of

manufacturing.3. Basic sanitary enhancements demanded by

the workforce.

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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.

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Code Of Conduct And Sanitary Problems

ADOPT CHANGE PROCESS THEORY Unfreezing Change through cognitive restructuring Refreezing

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Improved hygienic conditions at workplace reduces employee’s dissatisfaction

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Scope of the Further Studies

580 workers sacked and 110 are behind bars, who were involved in the violence

15 legal Trade Unions have been set up for all the 9 plants

The company has made 49% salary hike800 robotic manufacturing in assembly by

2015New plant to be set up in Ahmedabad

25References:-

http://sanhati.com/excerpted/3887www.ijaiem.org/volume2issue11/IJAIEM-20

13-11-26-077.pdf

www.marutisuzuki.com/plant-address.aspxwww.ndtv.comlabour.gov.in

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THANK YOU