New Delhi: India’s top car maker Maruti Suzuki India Ltd, which has been hit by violent workers’ protests at its Manesar plant near New Delhi, plans to build low-cost homes for its workers as part of measures aimed at improving the living conditions of its employees.
Maruti Suzuki is in the process of identifying land to build affordable housing units, chairman R.C. Bhargava said in an interview on Monday. The car maker plans to build at least 1,500 flats in Haryana and has similar plans for Gujarat, where it proposes to build a car factory.
“We believe that a house is the most important thing in anybody’s life and that’s no different in the case of workers,” said Bhargava. “If we help them in solving this problem, they will also be respectful and work with full dedication.”
Maruti’s move may help mend deteriorating relations with workers’ at the now idled Manesar plant and its Gurgaon factory, which have seen persistent workers’ protest because of demands relating to pay, working conditions and moves to reduce the number of contract workers, who are paid about one-third of what permanent employees get for the same work.
Reaching out: Workers at Maruti Suzuki plant in Manesar in Haryana. The firm has been in talks with the Haryana government to acquire as much as 50 acres of land. Photo: Ramesh Pathania/Mint
Production at the Manesar plant was halted at least four times in the past year, including the lockout announced by the company after rioting workers killed a senior Maruti executive and injured more than 100 on 18 July. The work stoppages have resulted in Maruti market share in the country dropping 7 percentage points to 38% in the year ended 31 March, according to data compiled by lobby group Society of Indian Automobile Manufacturers. The disruptions have also caused a revenue loss of Rs 2,500 crore.
Maruti has been in talks with the Haryana state government for acquiring as much as 50 acres of land. “While we approached the government four-five months back, the issue remains one of the top priorities for us. We would like to keep them (houses) low-cost. The intention is to build high-rise buildings in order to reduce cost of land per flat,” Bhargava said.
While a single bedroom flat in Manesar is likely to be available at Rs 10 lakh, a two bedroom one will cost workers at least Rs 15 lakh. The company is also in talks with some state-run lenders for home loans at a discounted interest rate. The flats will be made available to Maruti workers on a first-come, first-served basis.
Rakesh Batra, auto practice leader at consulting firm Ernst and Young in India, said Maruti’s move may revive the concept of labour welfare that existed in the pre-economic liberalization era.
“In the past when we had socialist economy, we have had examples of housing for employees,” said Batra. “In the wake of minimizing capital investment, many of the automobile firms across the globe don’t have such policies. Even in India, it’s not prevalent any more. Maruti’s move will create an environment of greater inclusiveness.”
Examples of industrial groups building townships around their factory include Tata Nagar or Jamshedpur, and Modi Nagar, developed by the Modi group.
“Jamsetji’s plan for the city was clear. He wanted more than workers’ hutments. He insisted upon all the comforts and conveniences a city could provide,” said Pravat Chaturvedi, former labour secretary, government of India. The reference was to Tata Group founder Jamsetji Nusserwanji Tata.
In 1986, Maruti itself had developed a cooperative society of at least 250 houses for workers at Chakkarpur in Gurgaon.
Last year’s strike at the Manesar plant was called off following a tripartite agreement involving the management, workers and the state government of Haryana, where the company is based. It later emerged that 30 workers, who had led the protests, were paid off by the management to quit the company. The workers received a combined Rs 4.2-4.8 crore, Mint had reported on 8 November.
Former labour secretary Chaturvedi lauded Maruti’s move to build houses for workers. “I think it’s a great move,” said Chaturvedi. “If they are providing housing to workers, they will be loyal to the company. They will have a sense of belonging to the company. They should get back to their earlier ways of working when everybody used to take inspiration from Maruti.”
After the violence hit its factory in Manesar, chairman Bhargava had also said that the company has decided to change its employment process and all future recruitment from March 2013 would be done through the human resources department. Currently, Maruti hires contract workers from various independent recruitment firms.