Manesar Case Study

Group 3
Roll numbers
3, 24 – 34
 Introduction
 Introduction to Manesar plant
 Oraganizational Structure of Manesar Plant
 Manesar Incident
 Reasons for the incident
 Financial Impact
 Management reaction
 Government Reaction
 Why Manesar is important for Maruti
 Maruti Suzuki
• MARUTI UDYOG LIMITED WAS FORMED IN 1983
• GOVT. HAD 18% SHARE IN IT INITIALLY
• SINCE 2007 GOVT. HAS NO STAKES IN MARUTI UDYOG
• TWO MANUFACTURING FACILITIES: GURGAON AND MANESAR
 Manesar Plant……
•5.5 lakh cars
•600 acres
•Diesel Engine unit
•3500-4000 workers
•1000-1200 temporary
• Models rolled out
•Swift
•Swift Dzire
•A Star
• SX4
 ORGANIZATION STRUCTURE AT
MANESAR PLANT
• THE PLANT EMPLOYEES ABOUT 3500-4000 WORKERS.

• THESE
EMPLOYEES INCLUDE PERMANENT WORKERS,
CONTRACT OR CASUAL WORKERS AND TRAINEES.

•ABOUT 1000-1200 OF THE EMPLOYEES ARE THE

PERMANENT EMPLOYEES.

•ABOUT 40% OF THE WORKFORCE INCLUDES THE

CONTRACT WORKERS.
The Manesar Incident

 At 3:30 pm on Wednesday afternoon, representatives from Maruti

Suzuki Workers’ Union and the Maruti management had met to discuss
the reinstatement of Jiya Lal, a permanent worker who had been
suspended that morning after an altercation with his floor supervisor.
 By 7:30 pm the workers’ discontent simmering since a few days back,
turned violent.
 The violence claimed the life of General Manager (HR) Awanish Kumar
Dev and he died of burn injuries.
 The incident left about 100 officials and supervisors injured including
MSIL’s Japanese staff.
 The plant was partially burnt down and thus a lockout happened.
 The company dismissed 500 workers accused of causing the violence
and re-opened the plant on 21 August.
management and
workers
1.THE MISSING INDIA CONNECT
 SUZUKI’S INCREASING PARTICIPATION IN
CONTROL OF INDIA’S OPERATIONS.
 JAPANESE VOICE DOMINATING CRUCIAL
DECISIONS.

2. YOUNG AND RESTLESS WORKERS

 TRANSFORMATION OF THE LIVES OF
YOUNG BLUE-COLLAR WORKERS IN
HARYANA.
 RECALIBRATED WORKER EXPECTATIONS
management and
workers
3. PRESSURES TO IMPROVE PRODUCTIVITY
 COSTS AND WAGES HAVE INCREASED ,
FORCED TO HIRE CONTRACT LABORS.
 SALES ARE VOLATILE AND POOR.

4. RETURN OF THE RED FLAG

 ACTIVE PARTICIPATION OF TRADE UNIONS.
Financial Impact

 In 2011, a series of labor strikes led to a revenue

loss of Rs 2500 crore
 In 2012, Maruti Suzuki lost the opportunity to
manufacture 30,000 cars at a cost of Rs 3500
crore
 Maruti’s market share slipped to 37.8% in 2012
from 44.6% in 2010
 Huge Backlog on Swift and Dzire, the company’s
best selling models were impacted
Management’s response
 Worker was suspended after he had an altercation with the
supervisor
 Regarding the reinstatement of the suspended worker,
management stressed on an enquiry before taking any action
 After the violent act which claimed the life of the HR
manager, the mgmt. dismissed around 500 workers involved in
the act
 Maruti also announced that the employees would not be paid
for the period of lockout as per the Indian Labor Laws
 Also the mgmt. agreed to an incremental wage increase of Rs
10,500 spanned across 3 years as opposed to a hike of Rs 15-
18000
 All recruitment would happen through HR dept
 Contract workers were not to be employed in core areas of
manufacturing
• The plant was made operational on 21st Aug,
producing 150 vehicles
• Some productivity measures were undertaken by
the mgmt. to maximize productivity
Role of Government

 Haryana government formed SIT (Special

Investigation Team)
 Invoked Industrial Disputes Act(1947) against the
“good conduct bond”
 Declared the lockout by MSIL as illegal
Why Maruti needs Manesar

 MANESAR PLANT ROLLS OUT SWIFT, SX4, A-STAR MODELS

 70% OF MARUTI’S 200-ODD VENDORS BASED IN GURGAON-MANESAR BELT

 SUPPORTING INFRASTRUCTURE BY MARUTI IN MANESAR IS IMPOSSIBLE TO

REPLICATE ELSEWHERE IN A SHORT PERIOD

 SHORTAGE OF SKILLED LABOURS IN GUJARAT

Conclusion

 People Management
 Industrial Relationship
 Work Flexibility
 Organizational Culture
Thank You