Business, Economics and Jobs

India: Maruti lockout prompts govt to intercede


Indian workers shout slogans as they wave flags outside a Maruti-Suzuki vehicle plant at Manesar, on the outskirts of New Delhi on October 14, 2011. 40 people were injured and one killed in clashes between the protesting workers and managers and executives on July 18, 2012 at the same plant.



Spurred into action by a company lockout, the Indian government is looking into the recent violence at Maruti Suzuki's Manesar plant, concerned that the increasing frequency and severity of clashes between workers and management is hurting India's image.

 “This incident, though [it] is not related to any policy issue, would further dent India as an investment destination," the Hindustan Times quoted an unnamed government official as saying. "The government would look into the various issues including labor laws and corporate governance."

In a staff editorial, the Indian Express argues that India's labor problems "must be addressed nationally. India has developed a strong trade union movement but it has insufficient legal safeguards against unreasonable and militant trade union activity, which is harming the formal sector and discouraging investment."

Citing five incidents of similar violence in recent years, the paper claims that "foreign investors may be wary about sinking their money into a state offering insufficient protection" and calls for revision of laws that "excessively valorised labor’s right to employment over the entrepreneur’s right to security."

Similarly, the Times of India speculates in a front page article about a possible Maoist connection to the violence in Manesar, in which a plant manager was killed and more than 40 management personnel were injured in an altercation with angry workers last week.

Intelligence agencies have been asked to investigate whether Maoists are infiltrating trade unions in the Gurgaon-Manesar belt, which has witnessed serious labour trouble in the past few years, the paper said, quoting unnamed sources.

Whenever folks are accused by unnamed sources of being connected to the Maoists, your radar should start pinging. And however reprehensible the violence is in this case, it's a little unfair to dismiss the workers' grievances out of hand. Yes, Maruti pays better than farm labor. But if it's such a picnic to work there, why do the foreign bosses draw "hardship pay" for spending time away from home in Japan? Isn't the cost of living lower in India? Shouldn't they be as happy to take a pay cut as their workers are to earn a bit more than they might turning screws at a local sweat shop?

Here's how blogger Amaresh Mishra answers those questions:

[Maruti's] contemporary worker, especially in north India/Hindi-Urdu heartland, was both more rooted and cosmopolitan. Unlike his counterpart of 1970s and 1980s, who hailed mainly from a landless labour, poor peasant or a pauperized proletariat background, the contemporary worker came from middle to upper-middle peasant backdrop.


In March 2012, while the Manesar plant was facing wage negotiations between the new union and the management, two workers shocked the managers with their statistical knowledge. The workers knew exactly that between 2007 and 2011 while the Maruti Suzuki workers’ yearly earnings increased by 5.5%, the consumer price index (for the Faridabad centre, Haryana), went up by over 50%. Since 2001, profits for the Maruti Suzuki company increased by 2,200%!

So in any case, the Maruti Suzuki management was throwing crumbs at the workers. The workers’ salary was in no way, by any yardstick, commensurate with the rise in the company’s profit. Yet the Manesar plant management was not ready to grant even a minuscule wage increase. Here, while contract labour got Rs 7,000 ($150) a month, regular workers survived on a mere Rs 17,000 ($300). Manesar workers were demanding a wage increase of Rs 15-18,000, which the management was resisting, even when Honda workers were getting similar pay scales.

Something to think about.