Microeconomic Problems of Maruti Suzuki

Topics: Maruti Suzuki, Suzuki, Supply and demand Pages: 3 (764 words) Published: August 24, 2012
Maruti Suzuki Manesar plant tragedy turned into crisis

About the plant
The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over 600 acres. Initially it had a production capacity of 100,000 vehicles annually but this was increased to 300,000 vehicles annually in October 2008. The production capacity was further increased by 250,000 vehicles taking total production capacity to 550,000 vehicles annually. The Manesar Plant produces the A-star Swift, Swift DZire, SX4 and Ritz. The tragedy

On 18th July 2012, Maruti's Manesar plant was hit by violence as workers at one of its auto factories attacked supervisors and started a fire that killed a company official Mr. Avnish Kumar Dev the HR Manager and injured 100 managers, including two Japanese expatriates. The violent mob also injured 9 policemen. The workers made use of spare parts of cars, rods etc to be used as weapons. Though the company said that the violence was pre-planned yet the union denied any conspiracy. The incident is recorded as the worst-ever for Suzuki since the company began operations in India in 1983 and adds to India's recent incidents of labour disputes turning to violence. Microeconomic Problems of the company

The Manesar plant suffered labour disputes with the management. The union had put forth their demands but the company was not ready to compromise. The workers had launched strike in 2011 demanding recognition of a new, independent union. That was granted in October 2011 but the slow formation of Maruti Suzuki Workers Union and slow progress over fresh wage negotiations raised the temperature again. The Manesar union had demanded - A five-fold increase in basic salary,

- A monthly conveyance allowance of 10,000,
- A laundry allowance of 3,000,
- A gift with every new car launch,-
- A house for every worker who wants one or cheaper home loans for those who want to build their own houses. In addition to this compensation and normal...
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