History of Maruti Suzuki

Topics: Suzuki, Gurgaon, Maruti Suzuki Pages: 5 (1443 words) Published: August 22, 2013
It is now a familiar story which hits the headlines with amazing regularity-labour unrest at Maruti Suzuki manesar plant, plant forced to shut down and thus incurring massive production loss with each passing day. But what is the root cause of this reoccurring trouble? What started as a minor scuffle over a suspension of a technician, took a political and an ugly turn claiming a life of an HR executive and burning down of an office at the plant. Was this a case of politicized union, mismanagement of the company and its contract labours or is it linked to something deeper as in our archaic labour laws? History is testimony to the fact that the relation between the management and the employee was not always this sour, the opposite infact but somehow has deteriorated over the years. Maruti Udyog Ltd.(MUL) is one of India’s leading automobile manufacture,a market leader in the car segment, both in terms of vehical sold and also revenue earned. It was established inFebruary 1981, by Sanjay Ghandhi, younger son of then Prime Minister.It was then taken over by the Government Of India in Feb’1982 In October of the year 1983,Maruti entered into the collaboration with Suzuki Motors,by which Suzuki acquired 26% of the equity and agreed to provide the latest technology as well as Japanese management practices. The commercial production and sales began by the end of 1983. The introduction of automobile industry.In Late 1990’s the company had serious differences with Govt. over appointment of company’s managing director. Suzuki referred the case for International arbitration and finally withdraws the case after an amicable settlement was India.

Employee Relation
For most of its history, Maruti Udyog had relatively few problems with its labour force .The company trusts its employees to a greater extent and the employees in turn respond by being totally devoted to the company. Both the managers and workers of Maruti wore the same uniform and ate at the same canteen even during the period of agitation. After recovering from the strike Maruti had a perceptible change in culture. A VRS scheme introduced soon afterwards increased the sense of insecurity amongst employees, but it was all for a good cause.

Wage Structure
During the 1980s and early 90s the level of employee satisfaction at Maruti was comparatively higher than most manufacturing companies in the country as they received significantly higher salaries as compared to employees of other companies. Generally the Wage rates and earnings of workers at Maruti were result of a series of revisions based on bilateral negotiations. The pre-revised (before 2001 strike) labour cost per vehicle in Maruti at Rs. 2,696compared unfavorably with Rs. 1,617 of its closest rival Hyundai.Worker’s incentive earning had been equal to almost their entire basic anddearness. In 2000, the average basic and dearness allowance was Rs. 7,000 and the incentive earnings were around Rs 6,500.With incentives accounting for a more than as usual and sizable proportion of the pay packet, workers badly needed the incentive scheme. Maruti’s worked formed part of middle class, not working class. Over two-thirds apparently ownedflats/houses and cars.

Power and Politics
In MUL the control and power is mostly in the hands of management. During the workers strike in 2000 the management refused to agree to the workers demands. The officers ran the plant by supervising the operations of the plant and hiring contractual labour. This made it difficult for workers to sustain the strike. They had to call off the strike and were in fact forced them to agree to some changes laid down by the management. The power of Japanese has always been there in an implicit manner. Always present as a the conflict resolver.

Labour Unrest in 2000
The car market in India become highly competitive in late 1990s with almost all...
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