Industrial Relations at Maruti-Suzuki

India's largest automobile manufacturer, Maruti Suzuki India Ltd, has achieved excellence in product innovation, production systems, customer services and satisfaction, and has a hold of over half the Indian auto market. It is also a company which is known for making many changes over the years to face competition and for using HRM strategies extensively. Yet the company does not appear to have been able to develop a mature relationship with its employee unions, and has been repeatedly facing confrontation with employee representatives. This could be an indication of ineptitude on the part of a multinational in understanding employee rights and aspirations in the host country, or a deliberate strategy to control unions despite facing small periodic losses. Introduction MARUTI SUZUKI INDIA LTD [MSIL] has been making many changes over the years to face competition. It is also known as a company to use HRM strategies extensively. A climate intervention programme was introduced through common canteen and common uniform for managerial staff and workers. Other interventions included, change in the nature of supervision to emphasise the supervisor's guidance role, employee development and training, and creating the image of a caring organisation through good welfare facilities. The company also had small group activities (SGA) and teams, regular departmental meetings for generating ideas, communication programmes through posters, leaflets, departmental meetings, and non-bargaining management union meetings (Sen 2010:444). Absenteeism was apparently reduced at one point of time to just 5 % in the plant as a result of these interventions (Nair & Rao 1990: 2-6). But are these practices incompatible with good industrial relations? Various events would seem to indicate that MSIL is unable to handle its human resources and unions in the context of change management. Starting from 2000 right up to 2011, the company has faced labour trouble, strikes, work stoppages and disruptions from time to time. A 13-day strike during July 2011, partial work stoppages and disruptions during September 2000 to January 2001, resumption of confrontation during August 2005, and changes in the union, its name or its character, emergence of another union etc leave many questions unanswered. Or are these strategies part of a pattern of labour relations practiced by multinationals? It would also be interesting to look at the role of the state during these interruptions and whether the state's intentions have backfired. The Company Maruti Udyog Ltd was launched in 1981 as a joint venture between the Government of India and Suzuki Motors of Japan to produce a people's car, in a market which had been dominated by Hindustan Motors' Ambassador and Fiat's small car. From the late 80s the company began a new era as India's largest car manufacturer and soon became the holder of over 80% of the automobile market share. The company was also upheld as a model employer, paying high wages and using several Japanese management techniques for integrating employees into the production process. By 1995 it got ISO 1992 certification and continued to grab a number of domestic and foreign awards each year on productivity, customer satisfaction, exports and business excellence. In 1996 it got the first prize in the national competition in Quality Circles (Sen 2010:446). But with the entry and growth of new passenger automobiles in India like, Hyundai, Daewoo, Tata Motors, Ford, Fiat, General Motors, Mitsubishi, Honda and Toyota, from mid-1990s, the company's share dwindled to less than 50% by 1999-2000. Its response was to launch a number of new models from time to time. The year 2000-01 was a special year for Maruti which had to absorb substantial depreciation for several new models introduced at once. Side by side Maruti began several initiatives to improve its production and shop floor working through cost cutting, enhanced customer services and efficiency. …