Maruti Suzuki Manesar plant violence and Organizational Relationship
Maruti Suzuki Manesar plant violence depicts serious flaw between the relationship in the organization and between the Managers of the organization. There are many factors that contributed to this event which was a matter of serious shame and a blot on modern India.
There have been many challenges of Organizational behavior during the past history of Manesar plant. Every time whether its government or Unions or workers or the organization, they keep on blaming each other for all the things that have been happening at the manesar plant
Government : There was lack of rules which should curb the menace of labor union and which should take care of the injustice happening with the labor. Whether it is related to underpaid labor or their physical or mental exploitation. Labor laws are very inflexible which have lead to serious exploitation of workers by their organization. White collar people usually exploit blue collar people because of these flaws in laws made by the government. Government of India made a Law in 1970 (The contract labor Regulation and Abolition Act) which is completely inadequate to meet the present day economic system. The Major factor that leads to the recent violence and the Incident at manesar plant can be seen from the viewpoint of Adams’ Equity Theory. As we will see the Manesar plant is an example that explains Adams’ Equity Theory.
Workers sometime also lead to deteriorating condition in an organization. Their demands are usually high and whenever a new union promises something they change sides.
MANESAR PLANT was inaugurated in February 2007. Workforce composition of manesar was Regular: 900 Trainees: 400 Contract workers: 700

The demand of the various trade unions at manesar plant: * A 5 fold increase in salary. * A gift with every new car launch. * A house for every worker on cheaper rent or loans the workers at cheaper rate who want to build their own house.
The above demands were also ignored by the top level and instead of this the other factor that ignited the fire of unrest among the workers was that these demands were also of the workers at Gurgaon plant of Maruti Suzuki and the workers at Maruti Suzuki were given high increase in salary whereas the salary of Manesar plant workers were not incremented. This seems like that Maruti Suzuki top level organization doesn’t want to fight a two front war. Because of this the workers at manesar plant resorted to strike and have suffered badly. Most of the workers were daily wage earners so due to strike of 50-60days they have suffered badly. Gurgaon workers in the meantime have got a bounty.

So if one plant shows a strong inclination of industrial relation than it is natural for the workers at other plants to be stronger peace at the other location. Maruti Suzuki can’t two battle fronts.
So they so showed a discrimination among the workers. Worker at the Manesar plant and gurgaon plant have to do same amount of work whereas they were paid differently. This lead to the feeling of Injustice among the workers of manesar plant and feeling of inequity which further lead to the worse condition and long days strike at manesar plant.

Due to flaws in Indian labor act most of the workers at the manesar plant were contract labor. They have to do the same amount of work as the permanent workers yet the difference in the pay scale was drastic. Contract labors were given around (6000-7000 Rs) per months whereas the permanent workers were given around Rs 18K per month and even out of this money some part is fixed whereas the rest is variable and can be deducted depending on the numbers of leaves taken. So there was huge inequity.
One point to mention is that the increase in salary for workers of MSIL (Maruti Suzuki India Limited was increased by only 5.5% between 2007-2011 whereas the CPI (Consumer Price Index) is increased by 50%. So one can imagine how difficult it has become for a Contract worker to live with that little amount of salary. They calculated that MSIL profits after taxes have increased by 2200 percent since 2001.

So there was there was same inputs from the employees whereas the output (in terms of wages) was different for contract workers and the permanent workers. This case suitably fits with the Adams Equity theory between the workers who were working next to each other, have to do same amount of work and still paid different amounts. So there was state of tension among the workers. Permanent workers were overpaid hence there was state of guilt whereas the contract labors were under rewarded so there was states of anger.

Maruti Suzuki was a private company so their main aim was maximizing the profit and thus they must make every effort to remain in business, and adopting even appeasement [as long as it is within the bounds of law] cannot be objected to.

The main reason behind not making the contract labors permanent and also not increasing the wage was to be competitive in the market. They want to have their labor cost just between 2.40% to 2.50% of annual Sales Turnover which is very less than the other competitive companies as other Auto Companies Labor Cost is in the range of 4% to 6% of Sales Turnover. In other words, Maruti Suzuki spends Rs. 2.50p / Rs on employees which also include the executive pays which is so high that this executive’s pay forms the most part of the total amount whereas in case of FMCG (Fast moving consumer goods) these amount stand at range of 4 to 7%. So we can clearly see how the Maruti Suzuki is exploiting its workers by paying them less and also hiring the workers at the contract basis. So the complete organizational environment as well the structure of the Maruti Suzuki was not favorable for the employees and also the working condition was not good at as we can see from the below mentioned points. So they were paying the contract workers minimum [actually bare subsistence] wages. And even after the incident there was no answer to this question or nobody wants to answer it.

Does the strike at Manesar Plant was only a political agenda by head of the union to earn some money and to lay foot into the politics?
The Key people and the leaders of various workers unions which were behind the major unrest at Maruti Suzuki Manesar plant violence that cost the company around Rs 1600 crore in lost revenue have resigned from the company and went into hiding after taking a heavy amount worth several Lac and leaving the rest of the workers who supported them for strike any even that strike has a hard impact on their livelihood were stunned and angry.
“The 30 suspended workers at Maruti's Manesar plant, including their two leaders Sonu Gujjar and Shiv Kumar, had quit the company, taking home amounts ranging between Rs 16 lakh and Rs 40 lakh, several people familiar with the matter said. Gujjar and Kumar, both of whom have gone incommunicado, are said to have resigned by October 22 for a full and final settlement of around Rs 40 lakh each.”[1] (http://articles.economictimes.indiatimes.com/2011-11-04/news/30359568_1_manesar-plant-maruti-s-manesar-maruti-suzuki-labour-unrest)
All the workers were in shock after the exit of these 30 workers who had betrayed them. For these leaders the other workers have had forfeited wages for at least 74 days during the 59 days of strike since June. So from the above mentioned discussion it seems that the strike and the incident that were happening at the manesar plant were just politically driven and major reason was to earn some money by these leaders of trade union. This example shows how politics can affect the Organizational culture, work environment. So care should be taken at the organization to keep the politics away from the Organization and the workers. Because some workers may be driven by the leaders of the unions and that may affect the workers and the organization in harmful ways as we have seen in case of Maruti Suzuki were workers were driven in the wrong direction for the benefit of Union leaders. Unions should not be allowed in the organization and Government should also take some steps to curb this problem of unions so that these types of incident should not happen again in these MNC’s.
Affect of the strike and the incident that took life of one person and injured many. * June strike lead to almost $95 million of loss in revenue * August strike lead to around $135 million * While the government is estimated to have lost around Rs.350 crore in excise revenue, the company itself has lost over Rs.1,500 crore in production * The share price of the company fell nearly18% since June * Overall the total production loss was over 51000 units including the famous car model Dzire and Swift which even after production was in shortage and Rs 1600 crore in lost revenues

Why the workers at Manesar plant went for strike and what was the other condition which forced the workers at manesar plant to go for strike.
The People working in Maruti Suzuki Manesar plant were from the nearby districts and some from faraway places like Bihar etc.
As most of the workers were Contract Labors their wages were very low. Whereas the cost of living in the area around manesar plant has increased drastically as Manesar plant was in area around Gurgaon. The price of the rented rooms has increased drastically whereas there was no increase in salary of the contract labors and even for the temporary labors. While both types of labors have to do same amount of work still the permanent workers were given some benefits like insurance whereas contract labors were offered no benefits. So they even don’t have enough money to find a descent place to live. Due to this condition these workers have no choice except to go for strike to increase their basic salary and to convert all the contract workers to permanent. The Permanent workers were also fighting to increase their pay scale.
This condition only leads to the question where else they can go and live? Either have to live in dirty small crude shelter with dozens of people in single room and still p with dozens of people in single room and still paying around 1,000-Rs 1,500 per bed per month or if they want a little better room they have to pay around 3,000-Rs 4,000 per person even that is also shared accommodation whereas the salary of contract labors was only Rs 6000. The rooms near Manesar plant were expensive so these people have to take room far away from the plant so get the cheap rooms. Workers have to work around 8 hours daily and after that hard work they don’t have enough energy to cook their own food. Food is also not cheap in that area. So there demand seems reasonable that organization should provide cheap shelters and food to workers. So it seems that there was serious lack of understanding between the workers and the organization or organization was only profit oriented. It takes no care of their valuable employees. (http://www.tehelka.com/story_main53.asp?filename=Ne040812NOTES.asp)
What happened on 18th July? * Mob or workers started beating the White collar peoples and Bouncers and started fire that killed a HR Manager and around 100 people were injured. * Also 2 Japanese workers were injured. * The legs and hands of HR Manager Awanish Kumar Dev were broken. Because of this he could not move out when mob set the fire as he was asthmatic as told by his family hence he was suffocate to death.
This all begin by some incident with one of the worker Jiya Lal that took around 10 in the morning. A supervisor during near the assembly lines had abused and made some caste related discriminatory comments to him as he was from lower caste. Because of this incident he slapped back the supervisor and later Jiya Lal was suspended. Later the worker union demanded that suspension of Jiya Lal should be cancelled. Due to pressure from Worker union the senior supervisor assured that the suspension is temporary and also there should be investigation against the supervisor who made the caste remarks against Jiya Lal. The worker union was not satisfied by only this. They entered the room of the supervisor for further action against that person who made the caste remarks against Jiya Lal. But the negotiation failed between the Workers Union and Supervisor. Due to this workers started beating the supervisors and other HR and white collar peoples and set the place on fire.
They were armed with door beams of the cars and iron rods used for making the cars the mob the workers start beating every supervisor they encountered and even managers and executives breaking their arms and legs .