Latest Strike at Suzuki Maruti Plant Entering Second Week

MUMBAI – Workers at Maruti Suzuki India’s Manesar plant are on strike for the fourth time in four months, this time with police intervention.

The employee-controlled union’s latest demand is for reinstatement of 44 workers suspended over the previous 33-day walkout, which ended Oct. 1, six days before the current work stoppage.

Swift output crippled by Indian strike.

It also is calling for reinstatement of 1,000 temporary contract workers, whom the auto maker has kept out for “indiscipline.”

India’s High Court ordered 1,500 strikers who have refused to leave the Manesar plant since Oct. 7 to vacate the factory and stay 109 yards (100 m) away from it. Police forcibly have begun removing the workers.

“We will not go anywhere and our demands are not negotiable,” says Somu Gajjar, one of the union leaders.

“Nobody can force them to work and we cannot ask them to vacate,” Maruti Suzuki Chairman R.C. Bhargava says, but he adds there can be no dialogue until the workers leave the factory.

The labor unrest is spreading throughout the Manesar-Gurgaon region. Workers at Maruti Suzuki plants that manufacture diesel engines and transmissions, motorcycles and castings are staging sympathy strikes, restricting shipments of engines to both the auto maker and Fiat India.

During the recent 33-day strike, the auto maker required all employees to sign a good-conduct bond after it learned Aug. 29 that workers allegedly had tampered with product quality. Of that day’s production, only 100 of 1,500 vehicles built met the company’s quality standards.

The good-conduct bond lists 103 possible violations, including “time spent in the toilets” and “personal appearance.” Terms are not enforceable, thus failing to change the behavior of many employees.

Workers gained little if anything during the 33-day strike; Maruti Suzuki withheld three days’ pay for every day of absence. The walkout ended in desperation after 16 continuous hours of negotiations among the auto maker, labor and the government.

The company was hurt by losses, employees by pay deductions and lowered morale, and the government by bad publicity.

Most workers at the strikebound Manesar plant belong to the Maruti Suzuki Employees Union, which allows outsiders as members. The company refuses to recognize the union, which was started by a political party.

Workers at the auto maker’s other plants in Manesar and Gurgaon belong to the older, entrenched Maruti Udyog Kamdar union, whose membership and management are controlled by employees.

The labor unrest threatens Maruti Suzuki’s prominent position in the Indian automotive market. During the 4-month period of intermittent strikes, production of 55,000 units has been lost and company losses are estimated at Rs30 billion ($660 million).

The timing is bad for the auto maker: Toyota, Honda, General Motors, Ford, Volkswagen and Nissan all offer small cars to compete in India with the best-selling Swift and Alto models. They also are expanding retail bases in small towns in the interior.

Those auto makers dwarf Maruti Suzuki in global resources and sales reach and had marginal interest in the Indian market until recently. All now have refined their India strategies, using global platforms and large investments to carve out substantial market share.

Damage to Japanese-parent Suzuki’s finances and competitiveness will be huge, since India is its largest global production base.

Maruti Suzuki is especially vulnerable since all of its seven plants and 100 suppliers are concentrated in the same northern region. Even without labor unrest spreading further, more production could be lost because of supply-line disruptions.

At its peak period, the auto maker was turning out a car every 21 seconds. But trust between workers and management has been broken.