On the road to Detroit PDF Print E-mail
Friday, 16 September 2011 00:00
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With striking workers at Maruti Suzuki’s Manesar plant stopping a company bus and attacking 11 supervisors, three of whom had to be hospitalised, things have taken a dramatic turn for the worse at India’s largest automaker. Even on Wednesday, when around 1,000 workers at Suzuki Powertrain India Limited (SIPL) joined the strike, it was obvious Maruti would have to shut down operations—SIPL supplies Maruti powertrains for all models of cars as well as diesel engines. Even though none of the 4,000-odd workers at Maruti’s Gurgaon operations had joined the strike by around 3,000 workers across three plants in Manesar—Maruti Suzuki at Manesar, SIPL and Suzuki Motorcycle India—the disruption in supplies forced Maruti to declare it will shut down operations at Gurgaon on Friday. Saturday is a holiday for Vishwakarma Pooja. If things don’t get resolved by then, the production halt may have to be extended. Although Haryana government officials are confident they’ll be able to resolve matters, there’s no guarantee how long any truce will last—the last strike at the Manesar plant took place just three months ago.

Although the current stalemate is over Maruti’s management insisting workers reiterate their commitment to a ‘good conduct’ code following instances of sabotage on the shop floor (too many cars began failing quality tests), the issue of contract labour is always in the background. Indeed, while talking of the lower wages paid to contract workers, a leading newspaper got carried away enough to say Maruti workers couldn’t even go on leave as R1,500 (!) was cut for every day of casual leave. The problem isn’t limited to Maruti, which is why, despite what the government data says, the number of high-profile strikes seem to be on the rise. While around 40% of Maruti’s workers are temporary ones—typically work is given to contractors who employ the workers that are sent to work at Maruti—the number is not atypical of many other industries. Indeed, Maruti’s wage levels are higher than those paid by many in even the auto sector. A study by the National Commission for Enterprises in the Unorganised Sector found that 66% of those employed in the formal sector of Indian industry (that employed just 25.4m people of India’s total workforce of 455.7m in 2004-05) were informal or contract/temporary workers. Interestingly, a study of official data by Bishwanath Goldar and SC Aggarwal shows that increased import competition results in creation of more temporary jobs and that economic reforms (not just labour market reforms) lead to more regular jobs, as does an increase in education levels of workers. Maruti’s management hasn’t been the most adroit, but there’s little doubt political parties are trying to fan the flames (Maruti’s Manesar union wanted to appoint non-Maruti employees as office bearers). If no lasting solution is found, India’s auto industry could well go the Detroit way.

Last Updated ( Wednesday, 02 May 2012 08:40 )

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