UNREST AT MARUTI UDYOG LTD.PRESENTERS, Neethu R Nair, Leah Rachel,Vivin Varghese

Company History Maruti Udyog set up in 1970 s by Sanjay Gandhi. Location Gurgaon, HaryanaYear Happening

Feb,1982 Oct,1982 Dec,1983 Dec,1985 1994-1995

Bankruptcy Joint venture with Suzuki corporation Production and sale started Captured more than half of market share Second and third plant

The beginning Serious issue with government in appointment of the Managing director. Called for International arbitration. Amicable settlement. Appointed RC Bhargava as the MD. Planned to increase sales and brought new models. But suffered a decline in market share . 2000-2001- market share slipped to 60% from 82.8%.

The source of conflict To motivate the workmen for higher productivity, in 1989 management introduced an incentive scheme valid for 4 years and this was modified from time to time in consultation with union. After expiry of the scheme on 31.03.1995, as no common understanding could be reached with union, management introduced a revised scheme through notification on 01.01.1996, effective from 01.04.1995 for 4 years,

The incentive scheme was focused on higher productivity. the union adopted a totally non-cooperative attitude and instead of appreciating of the the ground realities have demanded an incentive scheme which is highly unreasonable having exorbitant financial implications which the company cant afford.

Demands Concerned revision of production incentive Finalization of annual production target Improvement in annual pension plans.

Problems Maruti faced Market share dipped. Existing models stripped down with lower price. Less customer bookings and advances. Maruti borrowed funds for meeting working capital requirements. Invested 14000 million in P&M and promotional activities.

Tools used by Union Wearing black badges and not wearing uniforms. Tools down Go-Slow Slogan shouting Gherao Issued a notice that if not negotiated they would go for a hunger strike,fast untill death and tool down strike.

11th oct: Notified new incentive scheme. 12th Oct: Good conduct undertaking Plant production further down by 15%. Workers called it an illegal lock-out . Management called it an illegal strike . Workers did not agree with the incentive stating it to be too little and too many conditions.

Troubles troubles and troubles

Oct 2000: Maruti witnessed death of 3 persons one who was employed with the company.

Fight back 1000 workers in Union signed the good conduct undertaking. Called back apprentices who went for a training for 6 months. Non unionized workers who were willing also started working.

As a result of Build up stocks and poor off-take at manufacturing facilities. About to close and employees fear of loosing jobs. Other trade unions supported the union and criticized the good conduct form.

The real intention To make government of India a minority stake holder, a junior partner. Wrested control of top management. Company s stock took a nose dive and Suzuki bought them at depressed rates.

The settlement Win-win solution Ceased to insist on signing good conduct form. Workers agreed on incentive scheme based on composite criteria of productivity.

Time for questions

Good conduct Under taking A bare perusal of the said good conduct undertaking makes it abundantly clear that there is no change of any condition of service of the workmen .. it appears that prima facie, it is absolutely necessary in the interest of smooth functioning of the factory that all workmen give the Good conduct undertaking and join their duties in my opinion, the defendant is prima facie, doing no wrong in asking for such an undertaking which is conformity with law