Business, Economics and Jobs

India: Maruti shuts plant after violent clash between workers and management


A Maruti employee talks to a reporters standing behind the Maruti Suzuki gate in Manesar, Gurgaon on October 11, 2011 -- a year in which the car company was plagued by strikes and other unrest. Maruti closed its Manesar plant Wednesday after a clash between workers and management left one person dead and more than 85 people injured. According to local reports,
87 people, mostly workers, have been arrested.



India's leading car maker, Maruti-Suzuki, was forced to shut its Manesar factory after a Wednesday clash between workers and management left one person dead and as many as 85 people injured. Police arrested 87 people, mostly workers, in connection with the violence.

Agitating workers burnt down the administration wing of the plant that manufactures popular cars such as Swift and DZire, the Economic Times reported.

Workers stalled production and also burnt a few cars parked outside the factory after the Maruti administration suspended a worker from the quality department in the afternoon after an alleged altercation he had with the managerial staff. The newly-registered workers' union at the Manesar plant - Maruti Suzuki Workers' Union (MSWU) - that took over in March this year, demanded immediate revocation of the suspension order and prevented management executives from leaving the factory premises.

The workers of the morning shift started a sit-in protest with workers comprising permanent and on-contract roster demanding an immediate decision from the company. Anticipating violence, Maruti Suzuki management called in police to control the situation. By evening, the workers protest turned violent. According to the company statement, around half a dozen officials were seriously injured.

As GlobalPost reported earlier, last fall Maruti-Suzuki suffered one of the largest and longest running industrial actions to hit India's manufacturing sector in recent years, sending an ominous signal that the industrial turmoil of the '60s, '70s and '80s, when frequent strikes and lockouts slowed India's industrialization, may be making a comeback.

The violence is especially significant, because Maruti Suzuki is the showpiece success story of India's post-1991 economic liberalization. One of the country's most respected companies, it ended years-long waiting lists for cars built by Hindustan Motors. And it paved the way for investments by the world's largest car makers by proving that manufacturing in India could be profitable.

According to NDTV:

The 87 people arrested have been charged with murder, attempt to murder, causing grievous injury and rioting. CCTV footage has been used for evidence and to piece together what happened on Wednesday evening.

Trouble is said to have begun when there was an altercation between a supervisor and a worker. The worker slapped his senior and was suspended. A senior HR executive, his injured head bandaged, said workers turned violent then, stormed a conference room and beat up senior officials of the company severely.

Five portions of the plant including a control room were set afire during the violence. When the fire was doused, the charred remains of a body were found. In a statement, Maruti has accused the workers for starting the fire, and has said they had injured at least 40 executives and managers.

The statement has alleged that the union had tried to prevent the management from taking disciplinary action against the worker who slapped his senior and that they had also prevented executives from leaving the factory, holding them hostage.The workers however claim that the management started the fight. They have alleged that the supervisor had made "casteist" remarks against the worker, who is a member of a Scheduled Caste.

As GlobalPost reported last year, India has seen a resurgence of trade union activity, as companies have found ways to circumvent India's strict labor laws through the use of temporary "contract workers" and by outsourcing work to smaller firms that aren't held to the same regulatory standard.

According to union leaders and industry representatives alike, successive governments' moves to work around strict labor laws have played an important role in souring relations between labor and management.

In the controversial Special Economic Zones set up to encourage export-related industries, for example, companies misused their gated properties to fence out unions and violate labor laws, said a senior trade union official.

Similarly, new government sympathy for industry and a reduction in the number of labor inspectors to one for every 200 factories has weakened the enforcement of laws related to wages and working conditions, said Krishna Shekhar Lal Das, an industrial relations expert at the Institute for Integrated Learning in Management.

But at the same time, India's failure to reform its labor laws altogether has had disastrous consequences. On the one hand, the tough rules continue to prevent the manufacturing sector from growing, because India's tiny sweatshops can't compete with China's mammoth factories. Yet, on the other, by fighting to keep laws on the books that don't apply to most workers, the trade unions have ensured that for most of the poor neither wages nor working conditions can improve.