Now Other Carmakers Worried By Manesar Violence

Published: Monday, August 6, 2012, 16:15 [IST]

The Indian car industry has taken the violent incidents at Maruti Suzuki's Manesar plant very seriously. Despite being competitors, carmakers work within the same industry and each of them will get affected by ongoing trends. Not surprisingly, Maruti Suzuki has received support from all major carmakers as it works towards restoring normalcy at its Manesar plant.

Carmakers in India have witnessed several strikes in the past decade. Honda, General Motors, Hyundai Motors are some of the companies that had to face strikes in recent years. But never had they witnessed such brutal attacks in any of the past events. This was the first time a senior management was killed by workers.

The Indian car industry relies on international investment and technology. They fear if there are labour issues similar to the one faced by Maruti Suzuki, investments will dry up and even companies that have a favourable labour situation will be in trouble.

While Tata and Mahindra are two completely Indian owned car companies, the rest of them are foreign owned and their operations in India are not only dependent on local sales but also foreign investments.

General Motors India chief P Balendran has expressed the need to have labour reforms. Companies now struggle to fire permanent workers due to rigid labour laws that are more than 80 years old. Mr Balendran has said these laws needs to be changed to provide companies a positive outlook.

Some say the violence at Manesar was triggered by the disparity in salaries of permanent workers and contract workers. A majority of workers at the Manesar plant were contract workers and drew a salary that was less than half of permanent workers' salaries. Maruti Suzuki was having several contract workers because it could hire and fire them as it wished unlike its permanent workers.

Mr Balendran has stated that the labour issues and violence in car plants was expected due to the unfriendly labour laws. He added such events could rep[eat in other car plants too if a solution is not found quickly.

Carmakers and workers unions are yet to be on the same page. The management is in no position to trust its workers and its same story for workers too. Some workers have alleged that the management must be held responsible for the violence at the plant as they believe they were provoked by the management. This they claim is a way of removing hundreds of workers who are part of the recently constituted Maruti Suzuki Workers Union.

Carmakers fear the continued crisis at Manesar will trigger a domino effect on other car plants which would then lead to fewer investments coming in.