LABOUR STRUGGLE IN MARUTI SUZUKI

A Project Report
On
LABOUR LAWS

PARTIAL SUBMISSION IN THE FULFILLMENT FOR THE AWARD OF

POST GRADUATE DIPLOMA IN MANAGEMENT
(Equivalent to MBA)

ACADEMIC SESSION 2009-2011

Submitted To: Submitted By:

Dr. K.S.L Das
Associate Professor-HR Rinju Pillai (BM- 09172)
Samta Gupta(BM-09184)
Sarvagya Shree(BM-09187)
Shweta Rai(BM-09205)
Sonu Sharma(BM-09213)
Sonil Chikara
Surbhi Aggarwal
Vijay Barma(BM-09234)

INSTITUTE OF MANAGEMENT STUDIES

C-238, BULANDSHAHAR ROAD, GHAZIABAD -201009
 CANDIDATE’S DECLARATION

We hereby certify that the work which is being presented in the report entitled
‘Labour Struggle in Maruti Suzuki’ in partial fulfilment of the requirements for the
award of the Post Graduate Diploma In Business Management is an authentic record
of our own work carried out under the supervision of Dr. Shekhar, Faculty of Institute
of Management Studies, Ghaziabad.

We have not submitted the matter presented in this report for the award of any
other degree or in any other Institute. It has not been published in any magazine, book
or newspaper yet.

Rinju Pillai (BM-09172)

Samta Gupta (BM-09184)
Sarvagya Shree (BM-09187)
Shweta Rai (BM-09205)
Sonu Sharma (BM-09213)
Sonil Chikara (BM-)
Surbhi (BM-09174)
Vijay Barma(BM-09234)
 CERTIFICATE

We hereby certify that content presented in the project entitled “Labour Struggle in
Maruti Suzuki” in the partial fulfillment of the requirement for the award of the
degree of POST GRADUATE DIPLOMA IN MANGEMENT from IMS,
GHAZIABD is an authentic record of our own work, carried out under the guidance
of our project guide, Dr. Shekhar. We have not copied the matter embodied in the
project from any resources. This is to certify that above statements made by the
students are true to the best of my knowledge.

Dr. K.S.L Das Rinju Pillai

Faculty(HR) Samta Gupta
Sarvagya Shree
Shweta Rai
Sonu Sharma
Sonil Chikara
Surbhi
Vijay Barma
 ACKNOWLEDGEMENT

Any report puts to test knowledge credibility or experience and thus

our sole efforts are not sufficient to accomplish the desired
successful completion of a project It involves interest and effort of
many people and so this becomes obligatory on the part to record
our thanks to those who helped us out in the successful completion
of our project report.
At this level of understanding it is often difficult to comprehend and
assimilate a wide spectrum of knowledge without proper guidance
and advice. Hence, we would like to take this opportunity to express
our Heartfelt Gratitude to Respected Dr. K.S.L Das for his round the
clock Enthusiastic Support, Noble Guidance and Encouragement
which made this report successful. We are extremely thankful to her
for making this report worthy.
We would like to pay our heartfelt thanks to Respected
Director Dr. R. K. Bharadwaj.
 INTRODUCTION

Maruti Suzuki is one of India's leading automobile manufacturers and the

market leader in the car segment, both in terms of volume of vehicles
sold and revenue earned. Until recently, 18.28% of the company was
owned by the Indian Government, and 54.2% by Suzuki of Japan. The
Indian government held an initial public offering of 25% of the company
in June 2003. As of 10 May 2007, Govt. of India sold its complete share
to Indian financial institutions. With this, Govt. of India no longer has
stake in Maruti Udyog.
Maruti Udyog Limited (MUL)was established in February 1981,
though the actual production commenced in 1983 with the Maruti 800,
based on the Suzuki Alto kei car which at the time was the only modern
car available in India, its' only competitors- the Hindustan Ambassador
and Premier Padmini were both around 25 years out of date at that point.
Through 2004, Maruti has produced over 5 Million vehicles. Marutis are
sold in India and various several other countries, depending upon export
orders. Models similar to Marutis (but not manufactured by Maruti
Udyog) are sold by Suzuki and manufactured in Pakistan and other South
Asian countries.
The company annually exports more than 50,000 cars and has an
extremely large domestic market in India selling over 730,000 cars
annually. Maruti 800, till 2004, was the India's largest selling compact car
ever since it was launched in 1983. More than a million units of this car
have been sold worldwide so far. Currently, Maruti Alto tops the sales
charts and Maruti Swift is the largest selling in A2 segment.
Due to the large number of Maruti 800s sold in the Indian market, the
term "Maruti" is commonly used to refer to this compact car model. Till
recently the term "Maruti", in popular Indian culture, was associated to
the Maruti 800 model.
Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation
of Japan, has been the leader of the Indian car market for over two
decades.
Its manufacturing facilities are located at two facilities Gurgaon and
Manesar south of New Delhi. Maruti’s Gurgaon facility has an installed
capacity of 350,000 units per annum. The Manesar facilities, launched in
February 2007 comprise a vehicle assembly plant with a capacity of
100,000 units per year and a Diesel Engine plant with an annual capacity
of 100,000 engines and transmissions. Manesar and Gurgaon facilities
have a combined capability to produce over 700,000 units annually.
More than half the cars sold in India are Maruti cars. The company is a
subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent
of Maruti. The rest is owned by the public and financial institutions. It is
listed on the Bombay Stock Exchange and National Stock Exchange in
India.
During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In
all, over six million Maruti cars are on Indian roads since the first car was rolled out
on 14 December 1983.
Maruti Suzuki offers 15 models, Maruti 800, Omni,Esteem, Baleno, Alto,
Versa, Ritz, Gypsy, A Star, Wagon R, Zen Estilo, Swift, Swift Dzire,
SX4, and Grand Vitara. Swift, Swift dzire, A star and SX4 are
maufactured in Manesar, Grand Vitara is imported from Japan as a
completely built unit (CBU), remaining all models are manufactured in
Maruti Suzuki's Gurgaon Plant.
Suzuki Motor Corporation, the parent company, is a global leader in mini
and compact cars for three decades. Suzuki’s technical superiority lies in
its ability to pack power and performance into a compact, lightweight
engine that is clean and fuel-efficient.
Maruti is clearly an “employer of choice” for automotive engineers and
young managers from across the country. Nearly 75,000 people are
employed directly by Maruti and its partners.
The company vouches for customer satisfaction. For its sincere efforts it has been
rated (by customers) first in customer satisfaction among all car makers in India for
nine years in a row in annual survey by J D Power Asia Pacific.
Maruti Suzuki was born as a government company, with Suzuki as a
minor partner to make a people's car for middle class India. Over the
years, the product range has widened, ownership has changed hands and
the customer has evolved. What remains unchanged, then and now, is
Maruti’s mission to motorise India.
 Industrial relations

For most of its history, Maruti Udyog had relatively few problems with
its labour force. Its emphasis of a Japanese work culture and the modern
manufacturing process, first instituted in Japan in the 1970s, was
accepted by the workforce of the company without any difficulty. But
with the change in management in 1997, when it became predominantly
government controlled for a while, and the conflict between the United
Front Government and Suzuki may have been the cause of unrest among
employees. A major row broke out in September 2000 when employees
of Maruti Udyog Ltd (MUL) went on an indefinite strike, demanding
among other things, revision of the incentive scheme offered and
implementation of a pension scheme. Employees struck work for six
hours in October 2000, irked over the suspension of nine employees,
going on a six-hour tools-down strike at its Gurgaon plant, demanding
revision of the incentive-linked pay and threatened to fast to death if the
suspended employees were not reinstated. About this time, the NDA
government, following a disinvestments policy, proposed to sell part of
its stake in Maruti in a public offering. The Staff union opposed this sell-
off plan on the grounds that the company will lose a major business
advantage of being subsidised by the Government.
The standoff with the management continued to December with a
proposal by the management to end the two-month long agitation rejected
with a demand for reinstatement of 92 dismissed workers, with four MUL
employees going on a fast-unto-death. In December the company's
shareholders met in New Delhi in an AGM that lasted 30 minutes. At the
same time around 1500 plant workers from the MUL's Gurgaon facility
were agitating outside the company's corporate office demanding
commencement of production linked incentives, a better pension scheme
and other benefits. The management has refused to pass on the benefits
citing increased competition and lower margins
DEMANDS OF WORKERS

i. Revision of production incentive scheme

ii. Implementation of pension package
iii. New wage settlement for all regular employees
WHAT DID MARUTI SUZUKI DO……..

On 12th October 2000, the management issued an undertaking called “a

good conduct undertaking” to tame its workers and asked the workers to
sign it. The workers refused to sign the undertaking. The content of this
undertaking was “highly undemocratic and detrimental to the political
and legal rights of the workers”. The workers started a relay hunger
strike at the factory gate and the mamagement suspended nine employees
within a few days. The workers then staged demonstrations before
parliament. Workers from the nine leading accessory units of MUL
expressed solidarity with the aggetating employees. The management
responded by dismissing another 92 workers. The management
unilaterally announced a new incentive scheme in October to raise the
incentive per worker by Rs 500. The workers initially rejected the scheme
but accepted it as a part of final settlement.

On 12th Dec 2000, a final agreement was signed at abtro –partiate meeting called by
the government. The workers agreed upon the new incentive scheme suggested by the
government i.e. to raise the incentive per worker by Rs 500.
Though there was a loss o workers compared to their initial demands, this was
compensated by the bigger gain in a form of right to organize & collective bargaining.
After 4 months of struggle , the employee union called off its stike in jan 2001 .
According to the union the managemnt refused to reinstate 39 dismissed workers &
agreed to take back another batch of striking wrkers with a condition of signing a
“good conduct ” understaking.
 Conclusion
The major problem that the workforce at Maruti Suzuki had to face was that they
were not paid their due inspite of the high productiviy benefits achieved by the
management. The workers also demanded revision of the production incentive
scheme, implementation of pension packages, and new wage settlement for regular
employees. The Maruti Management entered into agreements with the workers from
time to time but they did not honour their promises .therefore the workers had to go
for strikes and demonstrations.
As per Industrial Disputes Act 1947, the management and the workers could have
formed a works committee having representatives from both the parties to discuss the
common problems prevailing in the organization, still if the issues are not resolved
they could have been taking the help of a conciliation officer.
BIBILIOGRAPHY

⇒ PAPER ON FOREIGN MANAGEMNT & INDIAN WORKER STRUGGLE

BY Dr. KSL Das
⇒ http://www.scribd.com/doc/24360976/MARUTI-UDYOG
⇒ http://radicalnotes.com/journal/2010/04/28/developing-unrest-new-struggles-
in-miserable-boom-town-gurgaon/
⇒ http://sanhati.com/excerpted/2320/
⇒ gurgaonworkersnews.wordpress.com/gurgaonworkersnews-no-925/
⇒ www.cpiml.org › Liberation Main Page › Year_2008 › May
⇒ ntui.org.in/union-power/march-2010/
⇒ info@careersrecruiter.com