1.

Introduction

Maruti Suzuki India Limited, formerly known asMaruti Udyog Limited, is an automobile

manufacturer in India. It is a 56.21% owned subsidiary of the Japanese car and motorcycle
manufacturer SuzukiMotor Corporation. As of July 2018, it had a market share of 53% of the
Indian passenger car market. The Japanese car major held 56.21% stake in Maruti Suzuki as on
31 December 2017.The company is engaged in the business of manufacturing purchase and sale
of motor vehicles and spare parts (automobiles). The other activities of the company include
facilitation of pre-owned car sales fleet management and car financing. They have four plants
three located at Palam Gurgaon Road Gurgaon Haryana and one located at Manesar Industrial
Town Gurgaon Haryana. The company has nine subsidiary companies namely Maruti Insurance
Business Agency Ltd Maruti Insurance Distribution Services Ltd Maruti Insurance Agency
Solutions Ltd Maruti Insurance Agency Network Ltd Maruti Insurance Agency Services Ltd
Maruti Insurance Agency Logistics Ltd True Value Solutions Ltd Maruti Insurance Broker Ltd
and J J Impex (Delhi) Pvt Ltd. Maruti Suzuki India Ltd was incorporated on February 24 1981
with the name Maruti Udyog Ltd. The company was formed as a government company with
Suzuki as a minor partner to make a people's car for middle class India.

1.1 Current scenario

Maruti Suzuki India Ltd Chairman R.C. Bhargava said on Tuesday the company had not
renewed the contracts of 3,000 temporary employees, as the automaker battled rising inventory
amid a slowdown in demand.Safety norms and higher taxes have “added substantially” to the
cost of cars, affecting their affordability, Bhargava told shareholders at the company’s annual
general meeting. With India’s auto sales declining for the ninth straight month in July, more
automotive manufacturers are laying off workers and temporarily halting production to keep
costs in check, Reuters reported on Saturday. The company is on track to meet the country’s new
emission norms, adding that the company will move towards manufacturing compressed natural
gas (CNG) and hybrid cars.Maruti plans to increase CNG vehicles by 50% this year,
1.2 Vision and Mission Statements

Vision:
Visions of any company are those values on which company works. As the MUL is started by
Governmental initiatives it tends to be more consumer oriented and hence cost effective, but on
the other hand Suzuki’s participation ensures not only need of the profit, but of the need of
maximum profit. The only way for this Nora’s dilemma of selecting principals for company’s
working vision ,was to maximize profit and reducing cost by maximizing output and sales Hence
MUL declared its Vision as- The Leader in the Indian Automobile Industry, Creating Customer
Delight1 and Shareholder's Wealth2; eventually become a pride of India”
Customer Delight1 is making sure that performance, after sales service and customer support are
best and beyond expectation. Shareholder’s wealth2 is the prime concern for running business
smoothly.MUL knows this and understands “customer is king”, he can change the fortune of any
company, hence goes company’s brand line: COUNT ON US!

Mission:
Mission is the statement of an organization’s purpose, what it want to accomplish in the larger
environment and its goals which are specific, realistic and motivating. Missions are described
over visions and visions demand certain objectives. The main objectives/Missions of MUL are: 

 Modernization of the Indian Automobile Industry.

 Developing cars faster and selling them for less.
 Production of fuel-efficient vehicles to conserve scarce resources.
 Production of large number of motor vehicles which was necessary for economic
growth.
 Market Penetration, Market Development Similarly Product Development and
Diversification.
 Partner relationship management, Value chain, Value delivery network .

1.3 Objectives
 Modernizations of the Indian Automobile Industry. Production of fuel-efficint vehicles
to conserve scarce resources. Production of large number of motor vehicles, which was
necessary economic growth.

1.3 Organisational Structure

2.1 Board of Directors

 MR. R. C. BHARGAVA MR. KENICHI AYUKAWA

Managing Director & CEO

MR. OSAMU SUZUKI (Director) MR. TOSHIHIRO SUZUKI (Director)

 MR. KAZUNARI YAMAGUCHI MR. TOSHIAKI HASUIKE

MR. KAZUHIKO AYABE (DIRECTOR) MR. KINJI SAITO (DIRECTOR)

3.1 Corporate Social Responsibility

Maruti Suzuki strives to be a people’s company, and for that, it needs to take care of everyone.
Not only is it completely dedicated to the customers, but also to the communities around the
facilities. As a part of the community development programme, Maruti Suzuki identify their
needs through formal surveys, one to one contact, and by engaging with the leaders. Their CSR
programmes tackle social issues at both local and national level in order to develop scalable,
impactful, and sustainable social programmes that leave a visible impact for the future
generations.

 Community Development
Maruti Suzuki believes that to truly help someone, it is necessary to first understand his or her
needs. Therefore, before undertaking any new CSR initiative, the company conducts a Need
Assessment Survey to understand the areas where a community might require support and
improvement. It is on the basis of the results of these surveys, that the company launches projects
in various sectors of community development, such as education, water and sanitation, health
care, and rural development.

Education:

With its community development programmes that focus on education, the company aims at
improving the infrastructure and learning conditions in government schools across the country. It
seeks to do so by constructing toilets, boundary walls, and pavements in schools, by arranging
for basic facilities like clean drinking water, and by providing and repairing electrical fittings
like lights and fans.  Apart from providing infrastructural support, Maruti Suzuki also awards
scholarships to meritorious students from underprivileged and economically weaker
communities. This not only encourages other students to work harder, but also goes a long way
in improving the overall academic performance of these schools.

Water and Sanitation:

Maruti Suzuki’s water and sanitation initiatives started in 2013-2014 with the aim of improving
personal hygiene, sanitation facilities, and public cleanliness conditions in the country. One of
the main thrusts of this initiative is to educate people about the importance of hygiene through
street plays and the distribution of communication literature.  Combining infrastructural
improvement and public education drives to this end, the company has provided 13 villages with
100% household toilet coverage.

Health Care:

Maruti Suzuki has been regularly assessing community health care needs, and has undertaken
various projects to provide better facilities.We have also donated four EECO Ambulances to the
Civil Hospital in Gurgaon.
Rural Infrastructure:

Maruti Suzuki regularly undertakes initiatives to upgrade shared community facilities such as
parks, cremation grounds, playgrounds, and community halls, in the villages around its Manesar
facility.

Employee Volunteering

At the heart of Maruti Suzuki’s success story is its people. With a firm belief in each employee’s
potential to contribute to the growth and improvement of society, Maruti Suzuki started its
employee volunteering programme.  This initiative provides volunteering opportunities in areas
such as education, health care, public cleanliness, sanitation, old age support systems, and others.
Under this programme, all new hires undergo a small CSR training during their induction. They
are encouraged to participate in the various volunteering activities that the company runs.
It is the enthusiastic participation of its people that has helped Maruti Suzuki improve the quality
of life for everyone. Over the years, thousands of Maruti employees have contributed hundreds
of thousands of volunteering hours under the e-Parivartan programme. However, it is not
numbers and statistics that Maruti Suzuki focusses on. Rather, it is the quality of the contribution
made, and the change brought about that the company wants to keep in its sights.

Road Safety

Maruti Suzuki understands the importance of making Indian roads safer. That is why, the
company runs a nationwide road safety programme to promote safe driving habits via various
initiatives. The two most important initiatives among these are:

Institutes of Driving and Traffic Research (IDTRs):

These institutes, spread over almost 10 acres each, work in close association with a number of
state governments. The main focus of the IDTRs is to train passenger and commercial vehicle
drivers with the help of world-class training infrastructure and qualified trainers. The use of
scientifically designed training tracks and simulators keep the training environment in these
IDTRs very close to the experience of actually driving on Indian roads. Over the years, IDTR
have built a reputation of being among the finest driving and road safety training facilities in
India.

Maruti Driving Schools (MDSs):

Established in partnership with authorised Maruti dealers, the 417 MDSs aim at nurturing a safe
driving culture through special theoretical sessions, test tracks, and driving classes on the road.
These schools are credited with having introduced advanced driving training simulators for better
judgement, and also with familiarising drivers with the concept of route maps for a more holistic
on-road practice.  Apart from Institutes of Driving and Traffic Research and Maruti Driving
Schools, the company also has several other initiatives such as Train the Trainer Programme,
Road Safety for Truck Drivers and various city specific road safety programmes which focus on
addressing the issue of road safety. The Road Safety Knowledge Centres (RSKCs) were
established in partnership with the Haryana Traffic Police. Managed by the IDTR, the seven
RSKCs together train the traffic violators and learner license applicants. 
The company signed an MoU with the National Minorities Development and Finance
Corporation in 2013-2014 under which it has trained over 92000 existing and new young drivers
from the economically weaker sections of India’s minority communities between 2014 and 2017.
To ensure that the drivers transporting Maruti Suzuki vehicles follow the best driving practices,
the company offers them road safety training. Under Jagriti programme, star commercial vehicle
drivers who transport Maruti Suzuki vehicles are rewarded for having an excellent track record
of damage-free and timely delivery of cars. Training millions of new and existing drivers, Maruti
Suzuki continuously strives to make Indian roads safer with the help of these initiatives.

Skill Development
With more than half of its total economic output coming from the service sector alone,
maintaining and constantly expanding the size of its skilled labour force is imperative for India.
Keeping this in mind, Maruti Suzuki has partnered with a number of state governments to adopt
several Industrial Training Institutes (ITIs). With this initiative, the company aims to make a
large section of the youth employable by the automobile industry.Maruti Suzuki's Skill
Development programme consists of three key elements:

Upgradation of Government ITIs:

In partnership with state governments, the Company is adopting ITIs and through its various
interventions upgrading physical infrastructure and workshops, training faculty, and providing
exposure to students on Japanese shop floor practices

Skill Enhancement in Automobile Trade:

To help workers adapt to the changing demands of the industry, the Company has set up
Automobile Skill Enhancement Centres (ASEC) at 60 ITIs. Each of these centres is equipped
with a model workshop on which practical training is imparted by full time trainers provided by
the Company.
Japan India Institute for Manufacturing:

In 2016-17, the Governments of Japan and India signed an agreement to create a pool of skilled
manpower for manufacturing in India. To translate the vision of this partnership, the Company
embarked on setting up the first Japan-India Institute for Manufacturing (JIM) at AS Patel (Pvt.)
ITI, in Ganpat University, Mehsana, Gujarat. Upgradation of Government ITIs consists of the
following:

Faculty Development:

Maruti Suzuki works in close association with the faculty at the ITIs to improve teaching skills
and methodologies. Working on varied aspects of faculty skill development, such as behaviour,
work culture, and teaching techniques, the company assists the teachers in preparing students for
the growing demands of the automobile industry.

Student Development:

Under this arm of the skill development initiative, students are tutored by Maruti Suzuki trainers
in areas related to car service, repair, and maintenance. This is independent of their regular
curriculum at the ITIs. To further the company’s holistic approach, students are also trained in
various soft skills such as discipline, personal grooming, and interpersonal communication skills.

Industry Connect:

Maruti Suzuki also arranges for industrial outreach programmes where experts from the
automobile industry are brought in as guest speakers to the ITIs. These interactions with the
experts not only help the students get industry-specific training, but they also enable them to
upgrade their skills. Apart from this, the company often invites students and faculty for factory
visits so they can familiarise themselves further with the demands of an industrial environment. 
The Skill Development initiative is working closely with 141 ITIs across 27 Indian states as of
31st March 2017.
4. Study about External Analysis

4.1 SWOT Analysis

STERNGHTHS: Contemporary technology. Japanese Management practices (that had captured

Japan over USA to the status oftop Auto manufacturing country in the world)Early mover
advantages. Recruitment is done in very tedious mann- -er ensuring talent and best professionals,
Working culture, after sale services , distribution, diversification, R&D

WEAKNESS: Still depends upon SUZUKI COPORATION, Japan For tech. support, 10%
components are manufactured outside India. Though MUL has launched luxury cars as well it’s
still considered as poor man’s brand. Diversification is not supported with all India presence of
Manufacturing Units. Bureaucracy, Technological disadvantages, Decades of
isolation, inertia and subservience to the whims of government bureaucrats have made MUL
unaccustomed to international standards or keen competition.

OPPURTUNITY: first company to roll out suitably designed cars before 2008 as per
Govt.’sProposal of new ethanol (renewable) mixed fuel.Other companies lacks economy of
scale, so market is still open. Importing new technology is controlled by Govt. so there is plenty
of untapped market and with increase in Income scale,Demand is rising

THREAT: Numbers of new Technology driven players and manufactures are in market. Govt
.reducing support and cuttingdown the Gas supply quota.(TOI, New Delhi,11th june,07).
4.2 PEST Analysis

Political Factor

Politics plays a key role in business. This is because there is a balance between systems of
control and free markets. As global economics surpasses domestic economies, companies must
consider several opportunities and threats before expanding into new regions. It also applies to
firms identifying optimal areas for production or sales. Political factors in many situations may
even help decide the location of corporate headquarters of a multinational company.

Economic Factor

Economic factors are metrics that measure the health of any economic region. The economic
state will change a lot of times during the firm’s lifetime. You have to compare the current levels
of inflation, unemployment, economic growth, and international trade. This way, you can carry
out your strategic plan better.

Social Factors

Social factors assess the mentality of the individuals or consumers in a given market. These are
also known as demographic factors. Social indicators like exchange rates, GDP and inflation are
critical to management. They can tell when it is a good time to borrow. These factors help find
out how an economy might react to certain changes. This step entails recognizing the potential
technologies that are available.

Technological Factor

Technological advancements can optimize internal efficiency and help a product or service from
becoming technologically obsolete. Role of technology in business is increasing each year. This
trend will continue because R&D drives new innovations. Recognizing evolving technologies to
optimize internal efficiency is a great asset in management. But, there are few threats. Disruptive
innovations such as Netflix affect business for CD-players. The best strategy is to adapt
according to the changes. Your strategies should sidestep threats and embrace opportunities.
Both consumers and governments penalize firms for having adverse effect on the environment.
Governments levy huge fines upon companies for polluting. Companies are also rewarded for
having positive impact on the environment. The consumers are willing to switch brands if they
find a business is ignoring its environmental duties.

Legal Factor

Legal Factors are critical for avoiding unnecessary legal costs. In the legal front the tax regime is
moving from Value Added Tax (VAT) to Goods and Services Tax (GST). Most of the labour
laws in the country are legacy of British Rule and needs major overhaul to suit the conditions of
the new millennium. At least a beginning has been made recently by making amendments to
Indian Companies Act. Also, the judicial system in the country is very slow.

Enviornmental Factor

Environmental Increasing number of communal clashes across the country coupled with terror
attacks will make all global companies think twice before finalising their expansion plans in
India. Added to this all the major car manufacturers have some kind of labour problems
continuing for a prolonged period.
5. Porters 5 Forces Analysis
7. BCG Matrix in the Marketing strategy of Maruti Suzuki –

With most of the brands of MSI are popular among customers and are preferred over the rivals in
the same segment because of low maintenance cost thus Brands like Celerio, Alto, Alto K10,
Eeco, Vitara Brezza, Baleno, Ignis, S-Cross, Ertiga The brand continues to hold high market
share in their segments and thus feature as Stars for the company.

While Swift, Swift Dzire and Wagon R have been the Cash Cow for the company in their
respective segment. While Ciaz as a brand hasn’t been able to make a mark in Sedan segment
and Gypsy along with Omni have lost their market share over the years thus all three continues
to a question mark for the company.Some of the brands like Zen Estilo, Versa, SX4, A-Star over
the years started to appear in Dog segment and has thus been discontinued by the company in the
last couple of years

8. Competitive advantage in the Marketing strategy of Maruti Suzuki –

With over 30 years of presence in the country, there’s a brand trust among the customers. Also
With two manufacturing unit in the country, one in Gurugram and Manesar gives the brand edge
over its competitors.

Factors which sets apart Maruti Suzuki from its competitors include

 The Quality Advantage

 Brand Trust- A Buying Experience Like No other
 Quality Service Across 1036 Cities
 The Low cost of Maintenance Advantage
 Lowest Cost of Ownership
 Technological Advantage

MSF continues its strong domination both in Indian market and in exports as well with the
company selling over 1.64 million vehicles to bring its  market share close to 50% in the
domestic market and exporting 4-wheelers to over 125 countries globally to become the largest
passenger cars exporter from India last year, dethroning Hyundai Motors India Ltd. which now
stands fourth after Volkswagen and General Motors.

The company exported 57,300 units in the April-September period last year with a growth of 6%
from 54,008 unit a year ago. MSI has also not only managed to sustain its huge sales numbers
but has also increased its market share both in the urban and rural market.
8.1 Distribution strategy in the Marketing strategy of Maruti Suzuki –

With its two manufacturing units having a combined production capacity of 14,50,000 vehicles
annually Maruti Suzuki has a strong dealer network as well to complement with. Maruti Suzuki,
in fact, has been one of the very first company in the country to realize the importance of after-
sales service in high involvement product like cars.

The company has the largest distribution and after-sales service network comprising of over 400
sales showrooms, 1900 Authorized Service Stations spanning across over 1190 cities, 30 Express
Service Stations on 30 National Highways across 1,314 cities and over 600 dealer workshops
which are unparalleled in the country.

The company also has 280 Nexa showrooms exclusively for premium car segment. To increase
customer touch points in the rural parts of the country where setting up of the complete
dealership was very difficult company has opened extension counters which are operated by
some dealer in the city.

8.2 Brand equity in the Marketing strategy of Maruti Suzuki –

Maruti Suzuki has managed to break into global Top 10 brand chart for the auto sector, where it
stands at 9th most valuable auto brand in the world just ahead of Volkswagen and behind Tesla.In
addition to this Maruti Suzuki India is ranked 99th  and 71st on Forbes World’s Most Innovative
Companies list and Top Regarded Companies list of 2018. The brand also features at 366 on
Global 2000 companies of Forbes 2018.

8.3 Competitive analysis in the Marketing strategy of Maruti Suzuki –

With the Automotive market in India appears to be a red ocean market with the present lot of
National and International players companies like Hyundai, Fiat, Tata
Motors, Mahindra, Honda & Toyota are giving a stiff competition to the brand with everyone
biting upon each other’s market share.

Maruti Suzuki over the years has very strongly been associated with small cars which have
helped its competitors take a massive edge in the premium car segment. People buying entry-
level cars are very different from the ones preferring premium vehicles as Premium is not just
price but also feel and features for the customers. Maruti Suzuki is a company with such a
widespread product portfolio in 2015 decided to launch Nexa to keep its premium brands which
in past have failed to reach the deserved heights like Kizashi, SX4, Baleno etc. The launch of
Nexa for the company is a step to increase market share in premium car segment through re-
branding. Nexa now has 280 showrooms in the country and has already sold 3,00,000 vehicles
and is expecting to sell 3,00,000 more vehicles this fiscal year.

8.4 Market analysis in the Marketing strategy of Maruti Suzuki –

Maruti Suzuki achieved a market share of 50%in the passenger vehicles segment for the first
time ever in 2017-18 with its utility vehicle sales outpacing that of its rivals. Company for the
first time in its over three decades of history sold more than 1.5 million units with the figures
reaching 1.65 million sales were 14% more than it was a year before.

With Hyundai Motors deciding to stop selling Santro and customers dwindling preference
for TATA Nano has also helped the company in small-car space. Maruti Suzuki India hopes to
retain the top spot in utility vehicles segment for the fiscal year 2019 with the
company planning to launch its all-new Ertiga this year andBrezzawith its popularity among
consumers continues to drive sales in volumes.

8.5 Customer analysis in the Marketing strategy of Maruti Suzuki –

Customer profile for the brand includes middle to high-income groups ranging from the ones
who are looking to switch from 4-wheeler to 2- wheeler to those who are planning to buy the
second car or a luxury car for their family. Thus, it includes customers in the age bracket of 22-
60 year and also high business professionals who are looking for low maintenance or innovative
and trending world-class vehicles with advanced safety features.

9. Digital platform of Marathi Suzuki

Maruti Suzuki, India’s top auto producer with 2 million passenger cars per annum, is betting big
on enhancing its customer and omni-channel experience to ready for the next phase of growth.
With the customer in focus, the company is investing in a massive omni-channel digital platform
to manage its customers, covering the entire end-to-end spectrum – right from all the dealers and
their sales teams to the customers and after sales. While Maruti Suzuki continues to be the
number one car company since its inception in 1973 and has successfully maintained market
share ever since, the company realises that the future success is marked by a more demanding
and discerning customer who expects to be understood one-on-one.

According to Rajesh Uppal, Executive Director – IT, CIO and CHRO, Maruti Suzuki, “In
today’s dynamic and highly competitive market, we need to ensure that we are interacting with
and selling to an individual. Therefore, our conversation has to be with an individual rather than
as one of our customer types, which requires understanding each customer individually, his/her
specific needs and then be prescriptive when interacting with him/her.”The new digital platform,
which is being built on Salesforce, will enable that by helping the company understand its
customers end-to-end.The omni-channel platform will be integrating all the company’s back-end
systems – whether its selling of cars, service, insurance, true value, the loyalty cards and all the
systems around these (For ex: Complaint Management System, Dealer Management System,
etc.) – into one platform and give a single view of the customer to the person who is interacting
with him/her. “We want to make sure that all our customer engagements on any of the channels
he/she wants to interact with us, at any place he/she wants to interact with us, we should be able
to give a very consistent experience to him/her. Whether the customer is talking to us on our call
centre, walking into our showroom, or maybe our sales executive is visiting his/her home, the
experience for the customer should be consistent,” explains Uppal. What makes the platform
truly omni-channel is the fact that all of Maruti’s customer connect channels and touch points,
such as social media, call centre, feedback forms filled by customers, etc. will be integrated into
it. This will enable a 360 degrees’ view of the customer and all his/her transactions with the
company. Uppal believes that the social listening and integration with social media will take the
company’s engagement with its customers to the next level.To make sense of the customer data
and derive meaningful insights, the platform will be supported by a strong analytics engine at the
backend.

The company is currently in the process of implementing the digital platform and is working
with its partners to set up the whole process end-to-end, including dealerships, sales executive at
the dealerships, corporate teams, call centres, insurance team, services team, etc.

10. Case study Analysis

Labour Unrest at Manesar Plant of Maruti Suzuki

Introduction

In the early 1980s, it was beyond the dreams of common man to own a local made car which
could match the imported ones. The restrictive and claustrophobic policy atmosphere made it
virtually impossible to produce anything or establish a factory without the painfully slow process
of permits, inquisitions and denials from an army of bureaucrats who had no domain knowledge
but had all the controls to enable or kill corporate initiatives. In such period, Maruti Udyog
Limited was born, thanks to the influence of Late Sanjay Gandhi, son of the then Prime Minister
Indira Gandhi which eased the way through the maze of permit raj. So, by 1983, India had
produced its first alternative to the ubiquitous Ambassador of Hindustan Motors owned by Birlas
and Premier aka Fiat owned by Doshis.

History

A Brief History of Industrial Relations at Maruti Udyog Limited Founded in 1983, Maruti
Udyog Limited had few problems in its labour relationships. The locally hired workforce
accepted the Japanese work culture and the modern manufacturing processes. In 1997, with the
changed ownership, Maruti came under government control. From there on, the conflicts
between the United Front Government and Suzuki started. Labour problems started under the
management of the Indian government. In 2000, a major IR issue began and employees of
Maruti Udyog went on an indefinite strike, demanding major revisions of their wages, incentives
and pensions. Employees resorted to ‘slowdown’ in Oct 2000, to force a revision to their pay and
perks. After the elections were held and a new central government led by the NDA alliance took
command, pursuant to the disinvestments policy, the new administration proposed to sell part of
its stake in Maruti Suzuki in a public offering through a red herring perspective. The workers
opposed this public offer plan on the grounds that the company will lose a major business
advantage of being subsidised by the Government and that the workers are better protected under
the Govt control.. The cold war between the union and the management continued through 2001.
The management did not pay heed to the union demands because of increased competition in the
automotive sector and lower profit margins. The central government prevailed and privatized
Maruti Udyog in 2003. Suzuki of Japan became the majority owner of Maruti Udyog Limited
with 51% share with the public holding 12.5%. In late 2011 and early 2012, labour unrest started
in the Manesar Plant with Sonu Gujjar, a local labour leader demanding right to establish an
alternative labour union due to non alignment of a large section of workers with the existing
union. The problem was solved in a rather sneaky way by the management by sending off Sonu
Gujjar and twelve others with a Golden Handshake scheme which lacked transparency.

Manesar Violence July 2012

On 18 July 2012, Maruti’s Manesar plant was hit by violence as workers at one of its auto
factories attacked supervisors, engineers and other management personnel and burnt and killed a
senior HR executive, injured 100 managers, including two Japanese expatriates. The mob also
injured nine policemen. The company’s General Manager of Human Resources had both arms
and legs broken by his attackers, unable to leave the building that was set ablaze, and he was
charred to death. The incident is the worst-ever for Suzuki since the company began operations
in India in 1983 and one of the most heinous of industrial crimes in the history of India. From
April 2012, the Manesar plant workers’ union demanded a fivefold increase in salary, a monthly
conveyance allowance of 10,000, a aundry allowance of 3,000, a corporate gift with every new
car launch, and a house for every worker who wants one or cheaper home loans for those who
want to build their own house. In addition to this compensation and normal weekend/holidays,
the union demanded the current four paid weeks of vacation be increased to 7 weeks, plus each
worker to have 40 days of sick leave and casual leave amounting to 75 days. There were some
reports claiming that the wage dispute, as per a union spokesperson, may be caste-related.
According to the Maruti Suzuki Workers Union, a supervisor had abused and made deriding
comments on a low-caste worker. These claims have been denied by Maruti Udyog management
and the police. The supervisor alleged to have made those comments was found to belong to a
tribal heritage and outside the Hindu caste system; further, the numerous workers involved in
violence were not affiliated with that caste either. Maruti said that the dispute was not over wage
discussions, but after the workers’ union demanded the reinstatement of a worker who had been
suspended for physical violence on a supervisor. The workers claim harsh working conditions
and extensive hiring of low-paid contract workers who are paid about US $130 a month, which
works out to half the minimum wage paid to permanent employees. Maruti Udyog employees
currently earn allowances in addition to their base wage. Company executives denied harsh
conditions and claim they hired entry-level workers on contracts and made them permanent as
they gained experience. It was also claimed that bouncers were employed by the company off
and on. India Today, the weekly magazine claimed that its interviews of witnesses present at the
plant confirms the dispute was over the suspended worker as mentioned earlier. The management
insisted that they must wait for completion of inquiry which was underway before they can take
any action on the employee suspended for manhandling his supervisor. Thereafter, the workers
broke up into groups, went on to set the shop floor as well as all offices on fire. They hunted
down management officials and proceeded on with methodically injuring officials at the factory
site with iron rods and heavy tools.

Implications of the 2012 Labour Unrest at Maruti Udyog, Manesar

The obvious implications of this unrest are enormous. Not only did this unrest open a new grim
chapter in the history of industrial relations in India but it also gave the indications as to what
prospective entrants from among the MNCs will do in this scene. Foreign Direct Investment in
India have come mainly in the area of IT, Telecom, ITES, Services and Automobile sectors. The
long time players among the MNCs will change their strategy due to these incidents occurring at
the home of Indian Government. Few of the implications of this labour unrest are as under:-

1. Investors in labour intensive sectors will demand a protective and clear policy environ ment
from the Indian Government before entering into India.

2. Given the state of Indian labour laws which are highly biased towards the workers, there will
be pressure on the Government to modify and tweak the laws in accordance with the need of
these times. Labour unions in the manufacturing sector have always been politically oriented and
wherever the political orientation is absent, the political leaders and parties fight with each other
to gain dominance or create a strong hold. Since it is not against the law for workers to affiliate
themselves to political parties, creation of multiple unions, resulting clashes and internecine
rivalry become the norm.

3. There is no place for physical violence and criminal act anywhere in running an industry.
Assurance of exemplary punishments will be sought by the management for the workers caught
in the act. In effect this will increase the distance between the management and the labour unions
even further.

4. State Governments have played a major role in creating a conducive environment in the states
of Gujarat, Tamilnadu, Karnataka, Maharashtra, Andhrapradesh, Rajasthan and Goa in addition
to several union territories. There will be a move to shift bases or start new ventures in those
states where there is no history of labour unrest in the past. Already, mutual interest has been
expressed by Maruti management and the Gujarat Government in this direction. It is a major
lesson for HR executives in general and the benefits will go a long way in investigating the role
of each worker or person involved in these incidents. This murder not being the first one in the
last 2-3 years, there is an urgent need to introspect and bring about a change in the theory
oriented study which the HR executives are prone to follow. It is a known fact that in this
electronic era of mobiles, computers and internet, the easiest path for an executive irrespective of
his domain, is to remain aloof from the smelly, sweaty and rough shop floor level environment.
This kind of shell always results in that shell being broken violently by the frustrated workers. In
the Armed Forces, officers always remain close to their subordinates under command by being
with them all the time during training, operations and during professional, personal difficulties.
That is the very reason why the soldiers are always ready to lay down their life at the word of
their superior. Workers no longer consider their superiors as role models in the manufacturing
sector, the relationship remains one of profession oriented which crumbles at the first spark of
mistrust. The bonhomie, friendship etc end at the gate of the factory and the entire role playing
begins inside the factory gates next morning. Among the executives and workers, the ‘us and
them’ attitude starts from the beginning of their service. The contempt grows and at a crucial
moment explodes shattering the entire set up.

5. Salaries being more than twice in the IT/ITES sector among the executives for the same level
of qualifications and service, manufacturing sector suffers from non involvement of the
executives in the leadership role. There is already an aversion among the engineering graduates
to avoid joining manufacturing sector and this incident has contributed immensely for this
feeling. No executive wants to get into the rut of industrial disputes, labour unions, dispute
resolution, pay roll arbitration and all such activities normally related to manufacturing sector.
Even in future, the exodus of the engineering graduates towards ‘clean’ sectors like IT/ITES,
Telecom etc will continue.

Conclusion

The entire episode presents a strong case for HR executives to increase their involvement at the
floor level with the workers in addition pursuing their professional education and career
development. As part of the initial training for the junior manager while joining service, it is
important to make it a part of study the nature of an average worker, their social structure, the
previous history of union activities, the study of resolutions and decisions taken and the
comparison of the facilities given to the worker vis a vis the workers of the competitors. The
present peace at Maruti Udyog, Manesar is a brokered peace between the Haryana Govt and the
Maruti management. This certainly is not going to be a permanent solution. As mentioned
earlier, an average Haryanvi worker is a hard fighter and it is pointless for the