CRISIS AT MARUTI SUZUKIS MANESAR PLANT

PRESENTATION BY ANSHAK KALIA NAINA CHAUDHARY SAGAR RANJAN SUMIT TYAGI TANYA KAUR
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TABLE OF CONTENTS
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S.NO. 1 2 3 4 5 6 7 8 9

CONTENTS OVERVIEW PROBLEM FALL IN DEMAND LOSS IN OUTPUT WORKERS PERSPECTIVE MANAGEMENT PERSPECTIVE ACTIONS TAKEN FACTS SOLUTION

SLIDE NUMBER 3 4 5 6-7 8-10 11-13 14-15 16-19 20-23

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OVERVIEW
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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 cars Manufacturing facilities are located at two facilities Gurgaon and Manesar It 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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FALL IN DEMAND
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Expected fall in demand during crucial festive

season, when car sales touch the peak. The Manesar plant is the hub for the key 'Swift' model, which runs a huge backlog in the retail market. The bookings for the new Swift and waiting list of customers are very high. Delay in production affect the delivery of cars resulting in disappointment among customers.

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LOSS IN OUTPUT
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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 control

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CONT.
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With only around 20-25 of 950-odd workers agreed

to sign the Good Conduct undertaking Production 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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PROBLEM FROM WORKERS VIEW POINT

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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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CONT.
Revenge for June's strike.
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Cockroaches and dead flies found in the food in the hurried lunch-

break that workers earn in the canteen 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 days wage cut of Rs.1500, two days Rs.2200, three days cut of Rs.7-8000 is implemented, so that almost the total months wage is cut. One second late into punching-card entry is a days 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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WORKERS DEMAND
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Workers 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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MANAGEMENT VIEW OF PROBLEM

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Unhappy workers have found out a new way to disrupt ongoing work at the plant by creating serious defects in quality of the cars, so they would fail the compulsory vehicle inspection (VI) quality test.

3/20/2013 Source: http://www.ndtv.com/

CONT.
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Workers indulging in deliberate attempts to reduce

output and are compromising customer interests Revenge for the June strike. Refused to sign good conduct form which aims at ensuring the production of good quality products. Employees are being charged with sabotage and causing quality problems in the cars produced.

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CONT.
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"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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ACTION TAKEN AGAINST EMPLOYEES

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Suspension of 10 workers

Dismissal of five
Discontinued the services of six trainees. Also suspended four workers for "instigating indiscipline"

a week before Another 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 3/20/2013

CONT.
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The company terminated 11 workers and suspended

38 on August 29th and 30th on false charges demanding a good-conduct bond with the state police and administration, the media, and bouncers on its payroll as its willing pawns. The Maruti Suzuki Employees Union (MSEU) is demanding as an immediate measure, the withdrawal of the charge-sheet, termination, suspension of the 49 workers. The workers are sitting day-and-night at the factory gate, peeling off the layers of Maruti Suzukis way of life.
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Facts
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June 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 1) Production stopped for a day at the same plant because of strike by some workers. August 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 1) Loss suffered is estimated at about 8,550 units, valued at about Rs 425 crore. Source: Economic Times

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Confirmed by companys spokesperson

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Production is right now at a stop at Manesar

Third production halt in three months at Manesar.

The company stopped operations for 10 working

days in June The firm lost Rs 400 crore because of the strike.

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Fall in Shares
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Shares fell as much as 2 per cent on the news to

close at Rs 1,080 on the Bombay Stock Exchange

SOURCE: TIMES OF INDIA

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According to Chairman R.C. Bhargava

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Manesar labour problem is essentially a political issue and not a problem which involves any significant demand from the workers

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Solution
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Identified reasons of the conflict.

Establishment of separate union for Manesar Plant 2. Code of Conduct- Falling standards of manufacturing. 3. Basic sanitary enhancements demanded by the workforce.
1.

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Trade Union Establishment

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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

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ADOPT CHANGE PROCESS THEORY

Unfreezing
Change through cognitive restructuring Refreezing

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Improved hygienic conditions at workplace reduces employees dissatisfaction

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