On a sunny Wednesday morning in December last year, the top management of India’s largest carmaker Maruti Suzuki were busy patting their back at the Gurgaon plant, the country’s largest car factory till date, for regularly exceeding targets and producing more cars than capacity at each of their plants.
The Indian automotive industry has been on a bull run for close to 3 years (see graphic) and not even the global economic downturn of 2008 could upset the trajectory. If at all, the breather in 2008-09 provided the springboard for an even stronger run in the next two years.
Under prepared for such growth, companies piled onto existing factories demanding more and more vehicles to be produced. Both in Guragaon and Manesar, Maruti produces atleast 25% more cars than the installed capacity. This year, Hyundai aims to produce 6.7 lakh cars instead of 6 lakh that is the stated capacity in its 2 plants.
The frenzied pace of growth is duplicated in numerous downstream automotive parts factories that provide critical components to the industry around the country. Everybody is stretching the boundaries of automotive production.
It is perhaps this cataclysmic growth with its strains on the workforce that has found manifestation in the increased instances of labour unrest in the sector. Since the infamous worker’s unrest at Honda’s two wheeler plant in Manesar back in 2005, over 30 instances of strikes and lockouts, big and small have been reported around the country.
Maruti’s current problems at Manesar, its first in 10 years, is the biggest but only the tip of the iceberg.
The trigger : Deteriorating condition of workers
Workers allege that while the work load has increased, little attention is paid to the conditions at the factory. At Manesar workers are entitled to just two 7 and a half minute break in one shift of 8 hours besides a half an hour lunch break at Manesar. That has remained unchanged even as production increased from 200,000 to 300,000 to 350,000 cars per annum. The fact that condition at the shop floor has become strained does not cut much ice with companies.
“For so many years, Gurgaon has produced more cars and operated in this framework, I dont know why Manesar workers cant do the same?” says Bhargava. “You cannot have different rules for different factories when the nature of work is the same. If at all, Manesar is more automated.”
Another bone of contention is the productivity linked incentives that workers get. Workers are rewarded for full attendance with incentives that are as high as 17-18% of their total salary. While this is intended to encourage productivity it can also be viewed as a means to discourage absenteeism including availing leaves that are entitled to them.
“To maintain the equipment and machinery of the plant, periodic shut downs are scheduled but there is no such empathy for workers,” said Shiv Kumar, general secretary of the unrecognised Maruti Suzuki Enployees Union. “If a worker falls ill for even 2 days, he ends up losing money.”
Even as that may be true, it is also a fact that work in a factory especially on an assembly line cannot be like a 9 to 5 office job. Even if 10 officials in an office do not report to work on a single day, it does not bring work to a complete stand still. In a factory and for critical functions it might as well can. Hence, incentives for attendance and lack of it for absentees is more a necessity.
“Work at the shop floor is a critical domain and pay has to be linked to the productivity,” said Arvind Saxena, director, Hyundai Motor India Ltd. “Otherwise how will you ensure consistency in production which is an integral part of our business.”
The moot point : right to form a union
While issues like wages have been the more common reason for some of the strikes, the main reason for prolonged estranged relations between management and workforce has been the demand to form a union. Companies have traditionally been reluctant to engage with more than one union, not only because it is unheard of in their native countries but also because it often leads to more problems.
Forming a union is often seen as a way to get more out of the management but has been exploited by individuals as well. Denying it however becomes a tricky issue as workers claim it is a fundamental undeniable right.
At Manesar for example the existing union — Maruti Udyog Kamgar Union, is viewed as pro management and dominated by representatives from Gurgaon. A separate union would cater to more specific needs of the factory.
A union would still not mean the end of all troubles for good. What would however is a little more empathy from the companies and a little less flippancy from workers.