Strike Adds to Problems at Indian Auto Plant

The strike is the latest in a series of labor relations problems at the four-year-old plant in Manesar, about 30 miles south of New Delhi, that are crimping sales for the automaker. The company, which makes about half the cars sold in India, is majority-owned by Suzuki of Japan.

Maruti Suzuki has said that its sales fell 20.8 percent in September from a year earlier, to 85,565 cars, largely because of earlier problems at the Manesar plant. The factory, where workers began the current strike last Friday, has the capacity to produce 1,200 cars a day, including popular models like the Swift, A-Star and SX4.

Shares of Maruti Suzuki were little changed in Mumbai on Tuesday, but the stock is down more than 24 percent this year.

Other Indian auto companies have also been hit by labor unrest this year. In March, some workers at a General Motors factory in the western state of Gujarat went on strike for nearly three months. There is a growing dissatisfaction among Indian factory workers, particularly those in the auto industry, that they are not sharing in the financial success of their companies at a time when inflation in India is running at nearly 10 percent.

Union workers are also angry over the growing use of contract workers, who are paid far less than regular employees and — unlike permanent workers — can be laid off without government approval. In some auto factories, contract workers make up more than half the staff.

Monthly manufacturing wages in India range from 6,000 rupees, or about $120, for contract workers, to about 35,000 rupees ($715) for highly skilled and experienced workers. While those wages are better than the average income in India — about $81 a month — living on them at the lower end of that range can still be tough.

Still, while government protection against layoffs gives union autoworkers some leverage, they know they have few employment alternatives — especially in north India where Maruti Suzuki and many other auto companies have built their factories.

About half of the country’s population is 25 or younger, and nearly 12 million people become working age every year. But India creates only a few million new jobs each year because of its stringent labor laws, weak infrastructure and anemic education system.

One striking worker at the Manesar plant, Satyawan, a 24-year-old who has been working at Maruti for five years and uses only one name, acknowledged that good factory jobs were few and far between. “Unemployment is increasing by the day so we won’t get a job, even if we look for one,” he said.

A company spokesman, Puneet Dhawan, said the company was not negotiating with the workers, who he said had seized “effective control” of the plant. He accused the workers of breaking furniture and damaging equipment at the plant.

“Negotiations can happen only when there is an environment for that,” Mr. Dhawan said by telephone. “Right now, we are looking at a mob of people who are going on a rampage.”

Workers at some Maruti Suzuki parts suppliers, a Suzuki engine factory and a Suzuki motorcycle factory also went on strike Friday, but some production has since resumed at those factories.

The Manesar auto plant, which began operations in 2007, has been the site of several disputes between managers and workers since July. The crux of the disagreement is whether workers there can form a new union, rather than join a union that also represents workers at Maruti Suzuki’s older plants in nearby Gurgaon. The Manesar union workers contend that the older plants’ unions are too compliant with management.

Vikas Bajaj reported from Munbai, India, and Sruthi Gottipati from New Delhi and Manesar, India.

Article source: http://www.nytimes.com/2011/10/12/business/global/strike-adds-to-problems-at-indian-auto-factory.html?partner=rss&emc=rss