Maruti Suzuki Case Study 2012 Ppt Slides


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Case study report on

Labour unrest at Maruti

Ayodhya Paikaray

Labour Unrest at Maruti

Maruti Udyog Ltd (MUL) is one of India’s leading automobile manufacturers and themarket leader in the car segment, both in terms of volume of vehicles sold andrevenue earned. It was established in February 1981, by Sanjay Gandhi, theyounger son of then Prime Minister of India, Mrs Indira Gandhi. It was taken over byGovt. of India in Feb’ 1982.In October of the year 1983, Maruti entered into the collaboration with SuzukiMotors, by which Suzuki acquired 26% of the equity and agreed to provide thelatest technology as well as Japanese management practices. The commercial production and sales began by the end of 1983. The introduction of the Maruti 800 in 1983 marked the beginning of a revolution in the Indianautomobile industry.In Late 1990’s the company had serious differences with Govt. over appointment of company’s managing director. Suzuki referred the case for International arbitrationand finally withdraws the case after an amicable settlement was reached betweenSuzuki andGovernment of India.

Employee Relation

For most of its history, Maruti Udyog had relatively few problems with its labourforce .The company trusts its employees to a greater extent and the employees inturn respond by being totally devoted to the company. Both the managers andworkers of Maruti wore the same uniform and ate at the same canteen even duringthe period of agitation.After recovering from the strike Maruti had a perceptible change in culture. A VRSscheme introduced soon afterwards increased the sense of insecurity amongstemployees, but it was all for a good cause.

Wage Structure

During the 1980s and early 90s the level of employee satisfaction at Maruti wascomparatively higher than most manufacturing companies in the country as they




The Manesar workers began discussing how to field their own candidates for a new unioninstead of being folded into the Maruti Udyog Kamgar Union (MUKU), the only recognisedcompany union. MUKU is viewed as a management- controlled union mainly for theGurgaon plant workers, whose spirits were crushed during their own agitations in 2000.MUKU has traditionally not held elections. Workers know that the time-honouredmanagement tactic is to fire their leaders. Since December, the Manesar workers andmanagement have played a game of hide and seek.


The Manesar workers formally applied to form a separate union called Maruti SuzukiEmployees Union (MSEU). They say the company responded by suspending 11 workers andsending bouncers to force them to sign blank pieces of paper.


The workers struck work on 4 June and held a sit-in inside the plant for 13 days till their 11colleagues were reinstated, though the main issue of unionisation remained unresolved. Theyallege the management next resorted to things like putting cockroaches and dead flies in theircanteen food


fact or angry rhetoric, there‘s little way of verifying.

Meanwhile, the file to register MSEU in the labour office was cancelled.



The employees resorted to an illegal strike;2.


those who‘d signed for a new union, many still retained MUKU membership;



signatures didn‘t match with the registered ones.

The revolting works

say they‘d all resigned from the old union and these technical reasons

merely indicate how hand-in-glove the Haryana government is with Maruti Suzuki.

JULY 2011

The Trade Union Act says the union should be of the workers‘ choice and should have annual

elections; else the labour commissioner can disband it. After the June agitations, MUKU

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