Are Maruti’s woes over? PDF Print E-mail
Tuesday, 08 November 2011 00:00
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Are Maruti’s woes over?

VRS for union leaders have dented the firm’s image


Given how Sonu Gujjar and his band of workers striking work thrice made Maruti Suzuki lose around 75,000 cars of production and revenues of R2,200 crore in just the past five months, a cynical view is that Maruti has done well to buy off the troublemakers with very generous VRS or ‘full and final settlements’. The figures vary from the R16 lakh mentioned the first day the news broke to even R1 crore for Gujjar, but whatever they are, they are many times more than what is warranted under the law. Although Maruti says it has done nothing wrong, it is surely problematic that no one, not even shareholders, knew of the deal until the press broke the story. Though some have justified the action by saying buying off trade union leaders is an age-old practice, the issue is whether this will buy Maruti the industrial peace it so desperately needs. Being perceived, rightly or wrongly, as a company which has bought out trade union leaders will likely increase suspicion among workers—indeed, Maruti’s workers are right now preparing to elect another lot of office-bearers for the union. Another side effect is that instead of trusting over-arching trade unions, workers may opt for smaller cohesive unions, all of which complicates dealing with workers that much more.

Ironically, since Maruti’s management’s original problem with the Manesar union was that it was trying to bring in political leaders through the back door, the VRS for Gujjar and other trade union leaders also strengthens the case for politically-affiliated trade unions since striking a deal with them becomes that much more difficult. Above all, the episode underscores the less than competent manner in which Maruti’s management has dealt with issues, first in letting the strike reach breaking point and in then ending it in this manner. Despite the much higher wages that Maruti pays in comparison with many in the industry, large enough sections of workers didn’t have faith in the management—now investor groups are also getting a bit worried.



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