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Maruti
1. CRISIS AT MARUTI
SUZUKI’S MANESAR
PLANT : AN HR INSIGHT
1
PRESENTED BY –
SWATI CHANDRA
PINKY KUMARI
2. TABLE OF CONTENTS
2
S.NO. CONTENTS SLIDE NUMBER
1 OVERVIEW 3-4
2 PROBLEM 5
3 FALL IN DEMAND 6
4 LOSS IN OUTPUT 7
5 WORKERS PERSPECTIVE 8-10
6 MANAGEMENT PERSPECTIVE 11-13
7 ACTIONS TAKEN 14-15
8 FACTS 16-20
9 SOLUTION 22-26
3. OVERVIEW
3
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
5. THE PROBLEM
5
Differences in
salary pay
Working
condition
Lack of proper
negotiation
6. FALL IN DEMAND
6
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.
7. LOSS IN OUTPUT
7
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
8. CONT.
8
With only around 20-25 of 950workers 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'.
9. PROBLEM FROM WORKERS VIEW POINT
9
“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
10. CONT.
10
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 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.
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.
11. WORKER’S DEMAND
11
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
12. MANAGEMENT VIEW OF PROBLEM
12
“ 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 quality test.”
Source: http://www.ndtv.com/
13. CONT.
13
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.
14. CONT.
14
"In the last three days, a series of serious quality
problems had 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.
15. 15
What ideas come
into your mind after
seeing this picture?
Uninteresting nature of
work…..
Political nature of
unions…..
Poor wages…….
Occupational instability….
Poor behavioural climate
16. ACTION TAKEN AGAINST EMPLOYEES
16
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 sent to occupy the
factory to „prevent violent activities‟
17. CONT.
17
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) was
demanded as an immediate measure, the withdrawal
of the charge-sheet, termination, suspension of the
49 workers. The workers were sitting day-and-night
at the factory gate, peeling off the layers of Maruti
Suzuki‟s “way of life”.
18. Facts
18
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 compared
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
19. Confirmed by company‟s spokesperson
19
Production stopped at Manesar
Third production halt in three months at Manesar.
The company stopped operations for 10 working
days in June
The firm lost Rs 425 crore because of the strike.
20. According to Chairman R.C. Bhargava
20
“ Manesar labour problem is essentially a political
issue and not a problem which involves any
significant demand from the workers”
21. Solution
21
Identify reasons of the conflict.
1. Establishment of separate union for Manesar Plant
2. Code of Conduct- Falling standards of
manufacturing.
3. Basic sanitary enhancements demanded by the
workforce.
22. Trade Union Establishment
22
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.
23. Code Of Conduct And Sanitary Problems
23
ADOPT CHANGE PROCESS THEORY
24. 24
Improved
hygienic
conditions at
workplace
reduces
employee‟s
dissatisfaction
