The 13-day strike at Maruti Suzuki, India’s largest automobile manufacturer, has ended with an agreement being signed late on Thursday. The strike at the Manesar plant in the northern Indian state of Haryana was over the issue of forming a second trade union with external affiliations. The company already has an older union — the Maruti Udyog Kamgar Union — that is dominated by workers from the older Gurgaon plant, near Delhi. Manesar workers have denounced this union as management-owned.
The accord entails the management taking lenient action against the striking workers, including reinstating 11 sacked employees. But it is silent on the formation of the new union. Haryana labor minister Shiv Charan Sharma, who has been the main mediator, says that the union is very much on the agenda. “Forming a union will take a little longer as [the workers] first have to apply and then get it approved by the government,” he notes. “It is the workers’ right to form a union.”
This is really the key issue. Several multinationals that have set up shop in India have been accustomed to more pliable labor in their home countries. They would rather interact with the workers through “works committees.” This has been unacceptable in many places. There have been strikes at units of Nokia, Toyota, Volvo and Hyundai on this issue, though the upfront demand has been higher pay.
Maruti is 28 years old in India: Shouldn’t the company have known the industrial climate by now? But company sources point out that they have been able to keep outside unions at bay all this time, so why should they surrender on this issue? The all-India trade unions (TUs) have been actively supporting the Maruti workers. They had set up a joint action committee and threatened to get a half million workers on strike in the Haryana auto belt, of which Maruti is a part. In recent times, Big Labor has been losing out in India, so the national TUs need to flex their muscles.
Maruti has been planning a change in strategy as far as its product line-up and marketing focus are concerned. It can ill afford to lose management time over labor issues. Also, the Indian auto industry is facing speed bumps after a heady growth year. There is a general slowdown in the economy. Galloping inflation – over 9% in May – has forced the Reserve Bank of India to raise interest rates. The latest hike — 25 basis points on Thursday — will further depress the demand for car loans and, therefore, dampen auto sector sales, analysts predict.
