Companies & Sectors
Gurgaon industrial unrest will give Maruti Suzuki a severe blow

The labour face-off, spearhead by Maruti Suzuki workers, is spreading all through the Gurgaon-Manesar industrial belt. The Haryana government is blaming the workers now

The Gurgaon-Manesar industrial belt unrest, spearheaded by the Maruti Suzuki face-off, seems to be getting worse. Yesterday, (19th September), Haryana labour minister Shiv Charan Lal Sharma blamed Maruti workers' "adamant" attitude for the breakdown of talks with the company management.

"Workers are not agreeing to come back to their jobs unless those workers who have been suspended and dismissed are taken back by the management," Mr Sharma said, while expressing disappointment over the workers' stance.

According to Mr Sharma, it is not possible for Maruti Suzuki to take back workers, against whom an FIR (first information report) has been filed and criminal cases have been launched.

The clash between the Maruti Suzuki management and workers has been going on since 29th August. The management had prevented workers from entering the factory premises unless they signed a "good conduct" bond, after alleged sabotage and "deliberate compromise" on the quality of cars being produced.

Workers had also been accused of attacking a group of supervisors when the labour unrest took a violent turn last week. There seems to be a glimmer of hope—talks will again start today to end the deadlock.

But what is the ground reality?

A drive towards that belt revealed more red flags up and running in this now-troubled industrial and commercial belt than seen before. But more interestingly, and symptomatic of the real gravity of issues there, some industrialists have been seriously looking at relocating. This could be to another state in India—or even the UAE. One unit which used to provide speciality generators, has already done so.
People who run industrial units in this area have been murmuring about the cost of doing business having gone up—to almost one-third of turnover. Where the units are linked to European or American interests, the anti-bribery laws in their home country make matters very difficult, as far as compliance norms are concerned. There are only so many one-line bills from 'consultants' or others that the auditors will accept. In addition, the forthcoming anti-corruption laws in India, which do not seem to realise and accept the gravity of the situation for entrepreneurs—who have to pay for everything or else see their business go kaput—are beginning to worry people too.
What kind of impact will this have on the automobile industry, which had its nursery in the Gurgaon area with the advent of Maruti Udyog, is out there clear to see and the writing is on the walls of the trucks idling outside the Maruti Suzuki factories. It is not safe to pull out a camera due to the heavy presence of police and private security, and Maruti Suzuki's well known heavy-handedness towards media—which is not "co-operative"—is real and true.

But a drive there and back without the bandobast of a PR junket would be essential soon for motoring and business media currently trotting out an "All is Well" as though they are the jailors in Bimal Roy's classic Bandini.
All is not well in the Gurgaon-Manesar industrial belt, India's largest car manufacturer has the industry at stake there, and why does it feel as though they are playing things to a plan?

And clearly, the government is not pitching for the workers. Haryana labour commissioner Satwanti Ahlawat has said that protesting workers are being misled by "certain elements" who do not want the matter be resolved. "During the talks, it came to notice that there is a clear intention of a few persons, backed by some political support, who want to mislead workers," she said. Ms Ahlawat added that at the instance of the Labour Department, the management had agreed to consider taking back those workers against whom the charges were not serious.

Meanwhile, the face-off continues—and the auto industry is on tenterhooks.



a v moorthi

6 years ago

Who but only Maruti Suzuki workers are to be blamed. They should under stand Suzuki being a Japanese company shows zero tolerance to defects in production quality and hence Management had to be strict with rouge elements in factory who tampered.

As long as worker unions continue to e lead by outsiders who don't have any stake in survival of the Unit , in long run workers will be thrown out in the street.


Suresh S Bisht

In Reply to a v moorthi 6 years ago

Martui and most of japanish companies do not follow labour laws. Forming a union is a right of workers as provided in the Trade Union Act as well as a right granted under our Constitution (right to form association). However, it is prerogative of the employer to give recognistion to a particular union. In a company there may be more than one union and normally employer deals with the union with larger number. The problem with these MNC that they don't follow Indian labour laws. Laws may be good or bad. It has to be followed. The Maruti Management dismissed workers (as per media report) even without giving an opportunity to explain. This is against basic law that a person should be given opportunity to defend himself. Whether Maruti or any other Japnise company or other MNC can do it in their own country, it is doubtful. In my view, the problem is that the top management is making huge money in the form of bonus, salary, options, etc while a labour who gets minimum wages or low salary while working for 8-9 hours in a day. Then the worker was retrenched for losses as he was blamed for that. No top management takes blame for this. They never get sacked but their remuneration gets increased. A worker get limited bonus while a managment employee gets a lot of bonus and other perks. Workers sees this wide disparity and gets angry. They know that they are blamed for everything (from recession to obsoletness). This is the result of all this and this is happening all over India. Government as well as Labour Authorities whose function is to be neutral and resolving disputes normally takes side of management due to various reasons (money for election funding is one of them). There should be some control on these MNC before they control the Government as well as Economy. It is keep in mind that in most of the industries MNC are getting stronger or taking larger share while indian parties are either selling their stake or incurring losses. Government should seriously pay attention to this.

a v moorthi

In Reply to Suresh S Bisht 6 years ago

i hail from Kerala but never stayed there for more than 4 days a year because strike in daily life there is like taking meals a daily affair. You might not know some 2000 companies in Kerala have applied for fast exit - closure during the last one year. for the month of August 2011 it is 31. As regards to Indian partners selling of their stakes it is because in most cases Indian partners swindle out their stake illegally from the enterprise. Most recent and famous one is Telnor - Unitech where in the Unitech members have soiled the reputation of Telnor. Why Bengal industrial areas look like grave yard/ ghost towns thanks to excessive TU activities. So it is easy like Human rights activists to talk about human right violations by security forces without actually being in hot seat. Why don't you write about monthly earnings of Maruti workers. Definitely chalta hai attitude should not be encouraged, because that is why we are seeing failing of public utility service every where because of excessive protection to employees. So much so that the rot of chalta hai attitude has entered in our homes where in there are homes where parents are not able to enforce moral discipline.

Suresh S Bisht

In Reply to a v moorthi 6 years ago

Talking about kerela and west bengal, note that these two states are governed by communist. Workers has nothing to do with that. Strikes are weapon used by workers for protecting their right and these are legal ways, if it is justified. This is provided in the law. Maruti whatever is today because of cheap land provided by Government of India and tax concession given by them. I fail to understand that why not all big managment guy ever get a sack for their poor performance e.g. Amabanis, mittals, etc. They are running the show. They are into all these scandals. They run their shows through big lobbying organisations (big three) and there are so many trade bodies. We all know what they do. Nobody thinks about poor labour. Further, a labour has to fight his own case, if there is no trade union while a company uses the best lawyer (Sr Advocate) to suppress that employee and it cost a huge amount of money. MNC go till SC to fight their case. Just think about poor people how will he defend him in the higher courts, in HC and SC. It is very easy to blame poor worker/ labour. All these big industriaslist travel in planes, stay in five star hotels, get spacious flats, in the name of corporate and all the money is being paid by company, shareholders, by banks (funded). No one gets their own money. These corporate gives huge money to get a license. They don't follow tax laws, esp MNC. Check cases, IT department continously takes matter with them. then they make cartels in tyre,cement, airlines, and flee consumers. They never get caught. What will poor worker who is earning max 20000 who has to run his family and fight for his right also. Nobody thinks about them. No government, no labour ministery. I don't expect corporate to do that. However, people working in corporate who are getting fat pay are just interested in their salary or bonuses. Unior is part of Unitech. They chose unitech because they wanted license and who else can give them license than an Indian comapny. Now they are suffering. all the top managemnet should go to Jail, Tihar Jail, only then they learn how the system works in India. All big corporates are into these types of shady deals whether it is relating to real estates, procuring license, suppressing the labour, etc. In Germany, workers get a seat in Board of the Company and in India, employees even do not get a right to form trade union which is their legitimate right due to scared management and pro corporate management. Further, Maruti is willing to suffer huge loss but willing to allow form a trade union. Even Maruti shifts to Gujarat, they will face same problem as Gujarat is less corrupt than other states. It is better if all these MNC leaves India and go back to their own country and do whatever they want.

Growing power sector needs funds worth $230 billion in 12th Plan: Power minister

Power minister Sushilkumar Shinde said while the present installed generation capacity in is more than 1,81,000MW, over 80,000MW of new power capacity is under construction. He added that during the forthcoming 12th Five Year Plan, the funding requirement of the Indian power sector has been estimated at $230 billion

Chicago: India's power minister Sushilkumar Shinde made a strong pitch for US investment in the growing power sector in India on Tuesday, asserting that lucrative opportunities were available to investors, reports PTI.

He was speaking at the US-India Economic Opportunities and Synergies Summit in Chicago organised by FICCI in association with The Executive Club of Chicago at the Fairmont Hotel here.

Mr Shinde said the average plant load factor (PLF) of Indian generation units improved to 77.5% during 2009-10 from 73.6% in 2006.

The contribution of the private sector to India's electricity output has grown from 11.6% in 2006 and further to 30% as of date and is likely to go up by about 60% in the 12th Plan (2012-2017), he said.

Mr Shinde told reporters at a press conference that during 2010-11, 15,795MW of power got synchronized and 12,161MW commissioned, which was the highest-ever capacity addition achieved in a single year since Independence.

"80,000MW is under construction as of now-such a huge amount," Mr Shinde said.

"Per capita consumption of electricity has grown from 600 kwh to 785 kwh in a span of five years," FICCI senior vice-president RV Kanoria told reporters.

However, while "infrastructure has not grown, India has grown," Mr Kanoria added.

Mr Shinde said while the present installed generation capacity in India is more than 1,81,000MW, over 80,000MW of new power capacity is under construction.

He added that during the forthcoming 12th Five Year Plan (2012-2017), the funding requirement of the Indian power sector has been estimated at $230 billion.

Stating that the 12th Plan aims at capacity addition of nearly 100,000MW, Mr Shinde emphasised that such a gigantic task can be successful only with strong support from the private sector.

Highlighting the reforms in the power sector in India, Mr Shinde said the Electricity Act, 2003, allows the sector to align itself with market dynamics and clears roadblocks in the way of greater participation by the private sector.

He said an independent regulatory framework in India now provides business confidence to power companies and a fairly lucrative rate of return on equity of 15.5% per annum.

Underlining that the share of the private sector in capacity expansion has gone up substantially in the 11th Plan, with 33% of total incremental capacity expected to come from the private sector, the minister said that in the 12th Plan, this share is expected to further increase to about 50%.

He said 100% foreign direct investment (FDI) is permitted to facilitate private investment under the automatic route for power generation, transmission and distribution projects.

Giving an outline of the power projects in India that are to be implemented under a public-private partnership model, Mr Shinde said 16 ultra-mega power projects (UMPPs) and 14 inter-state transmission schemes have been identified for development by the private sector on the basis of competitive bidding.

He said while the bidding for four ultra-mega power projects and six transmission projects has  been completed, more than five UMPPs are in the pipeline and offer unique opportunities for investment.

Each UMPP is of 4,000MW capacity and requires an estimated $4.5 billion investment.

Regarding hydro power, Mr Shinde said the estimated potential in the hydro sector in India is 1,50,000MW, out of which only 30,000MW has been harnessed.

The remaining capacity needs to be developed, which offers investors a lucrative opportunity.

He said that international majors like Mitsubishi, Toshiba, Hitachi, Alstom and Ansaldo have already started the process of partnering with Indian manufacturers to set up super critical manufacturing facilities.

On the renewable energy front, Mr Shinde said that India has launched the Jawaharlal Nehru National Solar Mission and is committed to adding 20,000MW of solar power by 2022.

He said State Electricity Regulatory Commissions (SERCs) are mandating minimum Renewable Purchase Obligations (RPOs) for Discoms and a mechanism for trading renewable energy certificates (RECs) through power exchanges has been operationalised in India.

Addressing the concerns of investors on the financial health of distribution companies, the minister said an "Accelerated Power Distribution and Reforms Programme (APDRP)" has been launched in urban areas, the main objective of which is to bring down the aggregate technical and commercial (AT&C) losses by around 15%.

He said the budget for the R-APDRP programme during 2007-2012 is about $11 billion.

With regard to energy efficiency, Mr Shinde said the Indian government has given due emphasis on this issue.

Stating that 37 energy service companies (ESCOs) have been accredited by the Bureau of Energy Efficiency (BEE), he said tremendous opportunities exist for foreign ESCOs operating either independently or in JVs for taking up energy efficiency projects.

He said it is estimated that an investment of $15 billion is required on energy efficiency initiatives in India.

Mr Shinde said that in order to improve confidence among the financial institutions, a robust energy audit system has been created.

He added that a Partial Risk Guarantee Fund and Venture Capital Fund are being created for boosting investments in the area of energy efficiency and a National Mission on Enhanced Energy Efficiency has been approved.

Mr Shinde is on a five-day visit to the US, which aims at enhancing cooperation between the two countries in the power sector.

He will also go to New York, where besides addressing the press conference organised by the counsel general of India, he will meet chief executive officers of various organisations, organised by the United States-India Business Council (USIBC).

He will also deliver the keynote closing address at the 8th Annual India Investment Forum.


S&P downgrades Italy with a negative outlook

The ratings agency says that the downgrade (to A/A-) reflects the country's weakening growth prospects and the fragile political regime.

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