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Dossier People’s struggles on Urban and Energy related issues

Attempts at Union Busting by a Giant Automobile Corporation: the Struggle of Maruti Suzuki Workers

, by Intercultural Resources , SEHGAL Rakhi

Maruti Suzuki Workers' Hunger Strike (Nov 7, 2012)

Maruti Suzuki India Ltd. (MSIL, formerly Maruti Udyog Ltd.), a subsidiary of Suzuki Motor Corporation of Japan, is India’s biggest automobile company, with about 45 percent of the market share for passenger cars. The company has manufacturing facilities at Gurgaon and Manesar in the state of Haryana, just south of India’s capital, New Delhi. Maruti Suzuki employs a combined workforce of 10,000 workers at its three plants on the Gurgaon campus (300 acres) and three plants on the Manesar campus (600 acres). The facilities have a combined manufacturing capacity of 1.5 million cars. Suzuki Powertrain India is also located at the Manesar campus and manufactures diesel engines and transmissions, employing nearly 3,000 workers. It will soon merge with MSIL. Suzuki also runs a motorcycle plant in Gurgaon, employing nearly 2,000 workers.

The scale of operations of this giant industrial corporation has driven development in the district of Gurgaon. Apart from its own huge manufacturing facilities, vendor companies supplying automotive components and sub-assembly systems to Maruti Suzuki employ nearly 30,000 workers.

MSIL is the largest and most profitable subsidiary of Suzuki Motor Corporation, contributing one-third of Suzuki’s global pre-tax profits and accounting for half of its production outside Japan. It exports cars manufactured in India to over 125 countries. The company is also setting up a third manufacturing facility in the western state of Gujarat.

It is widely acknowledge that the entry of Maruti Suzuki in the 1980s, as a joint venture company between the Indian Government and Suzuki Motor Corporation of Japan, changed the face of the Indian passenger car industry. Maruti cars quickly became an iconic symbol of the new India. Over the last three decades, Maruti Suzuki has held a virtual monopoly over the Indian car market.

Privatisation and Workers’ Rights

After the introduction of economic liberalisation in India in 1991, there was a policy shift towards privatisation. The most favoured route was disinvestments, whereby the Indian Government reduced its share in public sector companies. In 1992, the Indian Government took the first step towards privatisation of Maruti Udyog Ltd. (MUL) by reducing its own share to 50% and allowing Suzuki Motor Corporation of Japan to become the largest shareholder.

Workers’ rights become the first victim of privatisation. From 1998 onwards, differences began to emerge between the management and the workers. In 2000, there was a prolonged struggle between MUL management and the Maruti Udyog Employees Union (MUEU) over the incentive scheme and wage share for workers. The face-off lasted for 7 months and ended with the dismissal of 2,500 workers, the mysterious deaths of several workers and the smashing of the Union on dubious grounds, with a pliant state government and labour department colluding with the company to crush the workers’ movement.

State-Capital Nexus

With the onset of economic liberalism, even the judiciary abandoned its role in passing progressive judgements that protected workers’ rights. Successive judgments of High Courts and the Supreme Court have strengthened the demand of capital to keep labour unregulated. This has been accompanied by an increasingly blatant nexus of corporate managers and central and state governments, with the latter standing by and allowing attacks on the bargaining power of labour in the name of competition, efficiency and the need to attract foreign investment. Governments have competed among themselves, as evident in the current competition between Haryana and Gujarat states to attract Maruti Suzuki’s new investment by promising to provide an investment-friendly environment, which essentially means creating a quiescent labour force through an ineffective labour department that does not seek to ensure implementation of labour laws and an overactive police force at the disposal of capital to quell labour protest.

In 2011, when the workers of Maruti Suzuki’s Manesar Plant tried to organise themselves into a union and led three successive struggles over the course of five months to exercise the right to form a union of their own choice, the State-Labour Department-Corporation nexus was on full display. The Maruti Suzuki management declared that they would neither permit the formation of a union nor “tolerate any external affiliation of the union,” a violation of workers’ rights guaranteed under national and international laws. The Government of Haryana and the Haryana Labour Department also acted in collusion with the MSIL management, with Chief Minister Bhupinder Singh Hooda reportedly assuring MSIL management that the state government supported the company’s stance.

The state-capital nexus was on display again in August 2011, when Maruti Suzuki imposed an illegal, unjustified and unwarranted lockout at its Manesar plant. At the behest of the Maruti Suzuki management, the Haryana police deployed a force of 300-400 personnel, and with police protection, the Maruti-Suzuki management sealed the gates and prepared for its unilateral action. The company insisted that its workers sign a “good conduct bond” as a condition to enter the plant, even though courts have declared such bonds to be acts of force and coercion.

The story was repeated once again in October 2011, when after a 34-day lockout, MSIL management – which had agreed to take back all 3,000 workers – then refused to re-employ the contract workers who had supported the locked-out regular workers. This was a means for the management to retaliate and penalise the contract workers for supporting their fellow workers and refusing to cross the line and work during the illegal lockout. The same Labour Department that had been so quick to reject the union registration application of the Maruti Suzuki Employees Union did not take any urgent action to hold the Maruti Suzuki management accountable for violating the settlement within 48 hours of having signed it.

Contractualisation of Work as a Strategy to Weaken Labour

Over the years, Maruti Suzuki has gradually changed its workforce composition and created a small core of permanent employees and a growing body of temporary contract workers, who are employed under precarious working conditions. This weakens the bargaining power of the workers. Today, about 85% of Maruti Suzuki’s 3,000 workers at Manesar are contract workers. Maruti Suzuki has also established a salary structure and incentive packages that are strongly biased against workers who are under temporary contracts. Contract workers are fragmented in multiple ways, including the use of multiple contractors in the same workplace and the division of workers into different political federations.

Although initially, in the 1980s, Maruti Suzuki implemented some management styles that seemed new and egalitarian to many of the workers, it soon became evident that the egalitarianism was shallow and limited to appearances. In the 1980s, all the workers wore the same uniform, and everyone including managerial staff and workers ate in the same canteen. New Japanese techniques of quality circles, sharing of problems and finding solutions collectively were part of the work culture. In addition, Maruti Suzuki paid relatively high wages, with permanent workers earning several times more than their colleagues in nearby factories.

However, since the labour struggle of 2000, Maruti Suzuki began restructuring the work-force, eliminating permanent workers and hiring primarily through contractors or middlemen in violation of the Contract Labour (Regulation & Abolition) Act 1970. For doing the same work on the shopfloor, not only do contract workers earn less than half the salary paid to permanent workers, they also wear different uniforms and are excluded from most of the benefits given to permanent workers. In addition to employing contract workers, the company also extensively uses apprentices and trainees for production on the shopfloor, also in violation of labour laws.

In fact, many of the workers thrown out by Maruti Suzuki in 2000 were re-hired as contract workers at one-fourth the salaries they were earning at the time of their illegal dismissal. The apprentices and trainees are deployed on the shopfloor several years beyond their one-year training period and then thrown out instead of being absorbed by the company, only to be re-employed as contract workers at very low salaries. These strategies enable management to hire and fire workers without following the legal process. In turn, this has enabled companies to substantially weaken union activity.

18 July 2012

The events of 18 July in the Manesar plant of Maruti Suzuki, which ended with the death of a manager, were not a sudden conflagration. Anger at the plant had been building up for months over the management’s refusal to recognise an elected union. Workers were increasingly frustrated over their inability to exercise their constitutional rights, and the demand of equal pay for equal work was falling on deaf years. Instead of introspecting and asking why they have not developed a democratic industrial relations framework that can address the concerns of workers, managers in this industrial belt of Haryana have launched an aggressive media campaign to portray the workers as villains.

On 18 July, the workers and their union were protesting the unilateral decision of Maruti Suzuki management to suspend a lower-caste worker who had been insulted by a higher-caste supervisor. Thereafter, the supervisor reported this incident to his senior managers and the worker reported it to his union leaders. Without giving the worker an opportunity to present his version of the incident, or discussing the matter with the union leaders, or showing any intent to resolve the dispute, the Maruti Suzuki management took the unilateral decision of suspending him with immediate effect.

Union leaders and workers protested this high-handedness and called upon the Maruti Suzuki management to either discipline both the supervisor and the worker or revoke the worker’s suspension and talk to the union and both parties before taking any action. Maruti Suzuki management refused and the situation escalated with every passing hour. The second-shift workers continued production while the first-shift workers decided to stay back in the plant at the end of their shift until the dispute was satisfactorily resolved. At around 7 pm that evening, there were reports of violence in the negotiating room in the Human Resource Department, and workers were asked to leave their job stations and exit the plant. It was later reported that the HR office and a security office had caught fire and an HR manager had died in the fire. Police investigations have been unable to detect the cause of fire or establish the sequence of events that led to the fire and a death. A fact-finding team from the All India Lawyers Union-Haryana put the blame for the 18 July violence squarely on the company’s mismanagement and arrogance and concluded that there was no conspiracy on the part of the workers to murder anyone, as alleged by the company.

Managers and labour officials who regularly visited the shop floor in Manesar were fully aware of the mounting concerns, anger and frustration of the workers and yet did nothing to address the situation. Instead, the Maruti Suzuki management escalated tensions by trying to intimidate the union leaders and even went so far as to lodge false cases against key union leaders at the local police station when talks broke down on this issue. Union leaders were repeatedly harassed by the police but they refused to yield to the threats and intimidation.

It has been repeatedly made clear to the workers that they are up against the collective might of a huge corporate like Maruti Suzuki, with its clout, influence and money power, and a collusive labour department of the state government, both of which are determined to thwart the exercise of the workers’ constitutional right to freedom of association.

Resisting Violations

The workers and the union leaders have remained united in their demand: that the same wages and benefits be given to all casual and contract workers who worked alongside them on the shop floor. The management was adamant that it would not agree to do so. That these so-called casual and contract workers are working in core production processes in violation of the country’s labour laws is known to all, and yet no company has been prosecuted for this violation.

It is necessary to recognise the issues at the centre of the ongoing dispute between workers and management of Maruti Suzuki: the right to form a union (along with the right to affiliate with any central trade union if they choose to), the right to equal wages and benefits for equal work, and an end to discriminatory wage systems and wage theft.

These workers have shown the courage to stand up to a powerful corporation and the might of the State. They are not willing to give up their right to form an autonomous union that the management cannot control, and they are unwilling to sell out casual and contract workers by accepting a settlement that does not apply equally to all workers doing the same work. This is the biggest threat to the extant production system. No wonder the backlash is so severe.

Since 18 July, the police have arrested and imprisoned more than 140 workers, including the entire union leadership, who have had to endure severe custodial violence and torture by the police; many leaders’ family members have been illegally detained; most of the active union members are underground for fear of arrest, and their family members are regularly harassed, threatened and intimated by the police. On 16 August, 546 workers were summarily dismissed by the company, and the police continue to seek to arrest anyone who opposes the terminations and anyone who seeks to rebuild the registered independent workers union at MSIL. The situation is particularly grave, considering that management and the state are targeting activist workers for harsh punishment. The major aim of the continuing police intimidation and arrests is to destroy the independent union at the MSIL-Manesar plant and then set up a management-controlled union similar to the first plant in Gurgaon. In spite of these most difficult circumstances, the workers are reorganising their union and preparing to fight back.

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