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LATEST NEWS UPDATES | Workers strike thrice in five months, How Maruti lost connect with them by Sruthijith KK & Chanchal Pal Chauhan

Workers strike thrice in five months, How Maruti lost connect with them by Sruthijith KK & Chanchal Pal Chauhan

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published Published on Oct 16, 2011   modified Modified on Oct 16, 2011

There isn't a single burning, insurmountable issue because of which workers at Maruti's Manesar plant have struck work thrice in the last five months . Sruthijith KK & Chanchal Pal Chauhan report from Manesar that at its core lie accumulated grievances and resentment, and events are adding fuel to the fire

A day after workers at Maruti Suzuki's Manesar facility went on strike in June, 55-year-old MM Singh, the company's head of manufacturing, was scheduled to address a meeting of the company's functional heads of departments. "How did we lose the connect with our workers? What went wrong?" Singh said in his opening remarks, in part question, part introspection. Part of the answers to Singh's introspective question might lie in measures he spearheaded in early-2010. 

Coming out of the 2008-09 slowdown, Maruti saw demand spurt at a pace it did not expect and outstrip capacity. The longer waiting period for its models meant rivals started eating into its market share. "Losing market share due to a lack of capacity can be the death knell for an auto company," Singh told Forbes India in an interview published this April. 

Singh and his team put in place a series of measures to produce more. This included more frequent maintenance of machines, reprogramming robots that control the assembly line to squeeze out efficiency, and implementation of a "flexi-line" that could produce multiple models. Production zoomed. 

Singh's measures saved Maruti the cost of a new assembly line - Rs 1,700 crore. Its Manesar plant, with a capacity of 250,000 cars a year then, started making 350,000 cars. To ensure worker buy-in, their incentives were aligned to production. In essence, Maruti stepped on the gas hard, responding to market realities. But life on the shop floor took a turn for the worse. While production at its Gurgaon facility rose by 17%, Manesar was pushed harder, with a 40% jump. 

YOUNG AND LOCAL WORKFORCE 

The highly automated plant at Manesar was inaugurated in February 2007. Later that year, in December, Shinzo Nakanishi became the managing director of the firm. For the first time since 1983, the highest-ranking executive officer at Maruti was Japanese. A company spokesperson says the Manesar plant draws its employees mostly from Haryana. It has about 950 regular workers, 400 trainees, 700 contract workers and 400 apprentices. 

A regular worker at Maruti could make up to Rs 25,000 per month in CTC (cost to company) in his first year (after three years of traineeship). About 50% of this is in the form of performance incentives, including an attendance reward that amounts to 18% of CTC and has become a contentious issue in the ongoing strike. Trainees make Rs 13,000-14,000. And a contract worker, depending on his skills, anywhere from the minimum wage ( Rs 4,644 in Haryana) to Rs 12,000. 

About 60% of Maruti workers are regular employees and the remaining are contract workers. The minimum qualification to be a regular worker at Maruti is class ten and an Industrial Training Institute diploma. The average age of workers at Manesar is under 25, while that at Gurgaon is above 30. Very few workers at Manesar are married or have children, allowing them greater staying power in a strike. 

Most workers at Manesar worked their way through three years of traineeship and became regularised in 2010, entitling them to privileges trainees and contract workers don't enjoy. It was a little after that the Singhhelmed acceleration of production seems to have resulted in increased friction in labour relations. 

THE 7.5-MINUTE TEA BREAK 

The strategic decision to squeeze out more cars from existing plants didn't trickle down smoothly to the shop floor. Striking workers complain about abusive behaviour by supervisors, which the company denies. Workers say the conditions at the Manesar plant were too stringent, while the management says the Gurgaon plant has operated under identical conditions for more than 25 years. 

In an eight-hour work shift, workers get a 30-minute lunch break and two 7.5-minute tea breaks, says the company spokesman. "You have to remove your safety equipment, run 150 metres to grab your tea and snack, and then run to the toilet that is 400 metres away, and be back in seven minutes," says Shiv Kumar, general secretary of the proposed Maruti Suzuki Employees Union. 

Kumar is a brooding, well-built 27-year old, with an intense air about him. He strikes a contrast to the affable and lanky Sonu Gujjar, the president of the proposed union, who has become the charismatic and savvy face of the agitation. Kumar says workers can't leave their workstation even for a minute, supervisors sometimes deny permission for an additional toilet break, and steep salary cuts are effected for even a day of absence from work. 

The Maruti spokesman says tea and snacks are laid out at 80 rest areas next to each work station, across the plant. "I'm not saying you will see anyone strolling about during the tea break, but it is designed to be just sufficient," he says. 

Another sticky point is the steep cuts in compensation for absenteeism. Workers quote different figures - Rs 1,200-1,500 - as cuts for a day of leave, authorised or unauthorised. The company spokesman says this impression is due to a misunderstood HR policy designed to encourage 100% attendance. 

"For an employee whose attendance reward was Rs 2,000 per month, each day of leave in a month reduced attendance reward by Rs 500 (25% of the attendance reward) progressively. At three days of leave in a month, the attendance reward came down to zero," he wrote in an emailed response, adding that such cuts were subject to a cap of three leaves in a quarter. The spokesman admits the policy and it being part of the performance-linked pay was perhaps not adequately explained to shop floor workers.

'MARUTI IS OUR COMPANY' 

Many of these policies are dictated by the demands of the assembly line, where production halts if even a single worker doesn't do his part in the specified time. For this reason, all manufacturing firms place a premium on attendance. But such policies tread a thin line between acceptability and outrage. 

"Please understand sir, Maruti is our company. It is our family," says Shiv Kumar. "We want it to be the number one company always and we have given it our everything. When they asked for 100,000 cars, we gave them 120,000. But, the management must also understand this: they cannot treat us badly and be vindictive." 

It was issues such as these, and the alleged mistreatment, that led the Manesar workers to demand a union to negotiate with the management. According to some accounts, the workers first approached the Maruti Udyog Kamgar Union (MUKU), the Gurgaon-based union recognised by the company as the union for all Maruti workers. MUKU office bearers told their younger colleagues from Manesar this was par for the course. This is where the divergence in accounts begin. Demands for a separate union seem to have started towards end-2010 or early-2011. 

The company says it has "persuaded" the Manesar workers to join the existing union and not form a new one. The workers say the company first promised elections to the existing union in April and officials began warning workers against forming a new union, a charge the company denies. Maruti chairman RC Bhargava was unavailable for an interview last week. 

In May, the company announced that elections to MUKU, with a proposed new chapter for Manesar workers, would be held on July 18. (When this election eventually happened, Manesar workers boycotted it, and a panel in the Gurgaon union that was seen as backed by the management was thoroughly beaten by a rival panel.) Manesar workers first struck work on June 4. Workers say the provocation was that company officials were forcing workers to sign an affidavit stating they were happy to be with the Gurgaon union and don't want a new one. The company spokesman denies this, and says the provocation was that some workers were taking the signatures of others for the purpose of forming a union and supervisors objected to it being done during work hours. 

A day before, the workers had filed an application with the Haryana labour department to form a new union: Maruti Suzuki Employees Union. On June 6, the company summarily dismissed 11 workers for indiscipline and striking work. This included the four office bearers of the proposed union. The strike went on till June 16, when the company agreed to reinstate the dismissed workers. 

At this stage, the workers were being helped by the Gurudas Dasguptaheaded All India Trade Union Congress (AITUC), a leftist trade union. "It is a positive development for the united trade union movement," he told a newspaper reporter the day the first strike ended. 

ENTER THE TRADE UNIONS 

The cautious statement masked what the strike represented for AITUC and the trade union movement. About 400,000 workers are employed by about 1,000 companies in the Gurgaon-Manesar-Dharuhera-Rewari auto hub. Trade unions have had a mixed track record here. AITUC and the Hind Mazdoor Sabha (HMS) are the two most prominent trade unions in this belt. The general perception is that AITUC, like other Left-aligned unions, has a propensity for violence, while the HMS is more conciliatory. It is no secret that most managements see HMS as the lesser evil. 

In the months prior to applying to form a union, Maruti's Manesar workers had grown close to AITUC. AITUC helped them file their application, its leaders met with state labour department officials along with the Maruti workers, and at one point during the strike, Haryana chief minister Bhupinder Singh Hooda met with AITUC's Dasgupta. 

But after the first strike ended on June 16, the Manesar workers, says a AITUC leader, "no longer remained in our grip". Several unions were now "advising" the striking workers. Gujjar, Kumar et al, listened to everyone, but confided in none. This was an astute move. 

The union at Suzuki Powertrain India, which is based in the same Manesar campus and shares the assembly line, is affiliated to HMS, as is the union of Suzuki Motorcycles a few kilometres away. Too much proximity towards AITUC would have made it difficult to secure the support of these workers. 

Apart from HMS and AITUC, leaders of Central Industrial Trade Union (CITU), New Trade Union Initiative (NTUI), among others, started advising the Manesar group. This included Mazdoor Kranti Parishad general secretary Amitava Bhattacharya, a key figure in the 2007 strike at Kolkata's Hindustan Motors as well as Mamata Banerjee's agitation against the land acquisition for the Tata Nano factory at Singur. 

Who had how much influence is hard to ascertain, but everyone agrees that different people enjoyed the confidence of the Maruti workers at different points. Gujjar and Kumar both maintain they have remained independent and plan to do so in the foreseeable future. 

After the first strike ended, Maruti went into damage control mode. It brought in external trainers and the spiritual organisation Brahmakumaris to organise sessions with the workers, where they were encouraged to speak about their problems. "A process of healing had to begin, and it was clear from the amount of feedback we received from that exercise that we had been somewhat cut off from how they were feeling," says a company official. 

TENUOUS PEACE 

But the peace didn't last long, and the reasons are contested. Company officials claim the 11 reinstated workers started flouting all shop floor norms by appointed their own representatives at each bay and asking workers to obey their orders instead of company supervisors and managers. "Do you think we could do that?" asks Gujjar. 

Shiv Kumar says company officials started victimising workers and threatened false cases against leaders. "Show-cause notices, pay cuts, what have you," he says. According to company sources, through August, workers adopted a go-slow policy. Production fell from 1,200 cars a day to 700; on two days at the end of August, to 400. On those days, only 95 cars passed the quality check, and the company accused workers of sabotaging cars. 

On August 29, the company locked the factory and demanded workers sign a 'good-conduct bond'. The company sacked 18 trainees; and 44 regular workers were either suspended or fired for "sabotaging production and deliberately causing quality problems". 

Workers say the allegations of sabotage are fabricated to force the goodconduct bond on them. The bond is essentially a four-sentence statement that reiterates to the worker that the company has the power to dismiss those found indulging in such activities as "go-slow, intermittent stoppage of work, stay-in-strike, work-to-rule, sabotage..." 

The workers refused to sign. They sat outside the factory and started strike number two, which would last 33 days. The company hired contract workers, got its supervisors to work on the shop floor, ushered in the 170 workers who signed the bond, and started production. The company made about 600 cars a day, about half of regular capacity. 

By the end of the second strike, it managed to have about 1,000 workers staying in the factory full-time and churn out about 800 cars aday. This gave the management the upper hand, and the striking workers started to tire and waver. 

Negotiations were made complex by the varied political influences on workers. "We would make headway, they would agree, one of them would go to the restroom, make a call, come back and say, 'sorry we didn't agree to anything'. 

It was going nowhere," a person familiar with negotiations said. As worker resentment deepened, leaders advocating a radical approach started being favoured over the moderate view. 

The two sides reached an agreement on October 1. Workers would sign the bond, the 18 trainees would be re instated, and among the 44 regular workers, those who were dismissed would now only be suspended, and internal investigations would proceed against them. 

PLIGHT OF CONTRACT WORKERS 

A Haryana government official involved with the negotiations says they were at times frustrated by the management's sudden moves and harsh approach. 

During the June strike, while the labour department was negotiating with the workers, the management dismissed 11 people. "Sometimes we felt they could be more lenient," he says. But Maruti had been thrown into disarray by the strike. It was losing money, possibly market share, at a time when rivals were launching small cars, such as Honda's Brio and Hyundai's Eon. Besides, like Osamu Suzuki reminded everyone in Delhi, it was not in Suzuki's culture to tolerate indiscipline. 

"Not in Japan, not in India," he said. When workers returned on October 3, the company took in 170 contract workers and said the remaining would be absorbed in phases as the plant scaled up gradually to capacity, according to the spokesman. Workers saw this as a move to victimise contract workers who had participated in their strike. 

They also term this as a violation of the October 1 agreement, even though all agreements have been between the company and regular employees. The workers started demanding that all contract workers and the 44 suspended workers be taken back. If the company can go back on its word, we can renege on our terms as well, they say, even though the company hasn't technically gone back on the agreement. 

The plight of contract workers has been a big factor in the ongoing agitation and the general resurgence of trade union activity in the region. Maruti contracts workers through contractors. Workers are paid by contractors. This could mean a contract worker doing the same work as a regular employee, but earning one-third. 

The Maruti spokesman says it ensures its contract workers are paid at least minimum wages. This is done by asking the contractor to furnish proof, which allows contractors to fudge. They often bill the company more than what they pay the labourer, and pocket the difference, workers say. 

This is not a Maruti-specific problem. Many auto companies and component makers sometimes have as much as 80% of their workforce as contract workers. This means less pay, no benefits, no hassles brought on by labour laws, and greater flexibility to adjust production to demand. This practice has spread in the auto hub and is causing a build-up of resentment, union leaders say. 

Maruti's Manesar workers went on strike again on October 7. This time, they were joined by workers at the adjoining Suzuki Powertrain and Suzuki Motorcycles. The strike at Suzuki Powertrain, which makes diesel engines and critical components of the petrol engine, bought all of Suzuki's operations in India to a halt, just a head of the Diwali festive season, when car sales soar. 

The management worried for the safety of the factories as workers laid siege to them. Over the weekend, the state administration pressed 4,000 cops into service and kept another 12,000 on backup, as it moved in to shift the workers out of the plant following a court order. 

Although the strike has now been declared illegal by Haryana, it has already gone far beyond what anybody expected when workers first laid down tools at Manesar on June 4. For better or for worse, the company that ushered mass car ownership to India will never be the same again.

The Economic Times, 17 October, 2011, http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/workers-strike-thrice-in-five-months-how-maruti-lost-connect-with-them/articleshow/1038

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