New Delhi: Most executives of Maruti Suzuki India Ltd who were injured in the 18 July assault by workers at the car maker's Manesar plant are refusing to rejoin work, possibly delaying the resumption of production at the factory, according to three people familiar with the development.
While some executives are still willing to join work, those with under five years of work experience are reluctant to return for fear of a threat to their lives, the people said.
One executive was killed and at least 100 others were injured in the attack by militant workers at the Manesar plant. The mass assault followed an altercation between an employee and his supervisor. The injured included two Japanese executives who needed hospitalization.
“My parents are not in favour of me joining the company back,” one of the injured officials said on condition of anonymity. “They are worried about my safety. I am happy to work at Gurgaon plant or even in Gujarat but not at Manesar. If I am forced to join work at Manesar, I will have to quit.”
Maruti Suzuki’s chief operating officer (administration) S.Y. Siddiqui said the company’s primary task is to ensure safety at the plant and rebuild the morale of executives. He conceded that some executives were unlikely to return.
“There can be some compulsions.” Siddiqui said. “While none of them have sent in their resignation, we don’t expect all of them (injured) to join work.”
Many of the managers injured at Maruti’s manesar plant don’t want to return to work. Mint’s Amrit Raj and expert Mahantesh Sabarad look at what this could mean for the company.
“As top management, we have to build up their morale. We need to ensure their safety,” Siddiqui said. “There will be law and order issues that will be playing up on their minds.”
Maruti Suzuki said it is hiring India’s leading psychologists and psychiatrists to counsel its injured employees. The counselling sessions will start this week, Maruti said in a statement.
In another indication that it may not resume production in Manesar anytime soon, the company has asked its engine and transmission unit, Suzuki Powertrain India Ltd, to halve its production till “further notice,” according to another three people familiar with the development.
The plant will now produce 450 engines and 1,500 transmissions per day as against 1,100 engines and 3,600 transmission systems before the lockout at the Manesar plant.
“The work at the plant will continue in two shifts at the powertrain unit,” said one of the officials familiar with the development. “But second shift will work at less than half manpower.” This is because at least 30% of the contract workers have been asked to go on leave till production is further increased.
“Only those contract workers who are involved in non-production work are asked to stay,” said a second person familiar with the development.
In June, the board of Maruti Suzuki India approved a proposal to merge affiliate Suzuki Powertrain India Ltd with the company in a move that will give the country’s largest passenger car maker complete control over all its diesel car manufacturing operations. The process is likely to be completed by the end of this year.
Suzuki Powertrain is a 30:70 joint venture between Maruti and its Japanese parent Suzuki Motor Corp.
The merger will raise Suzuki’s stake in its Indian subsidiary by 2 percentage points to 56.2%. The merger is proposed to be effected through a share swap. Suzuki Powertrain has stopped making transmission systems and engines for the Swift, Dzire, A-star and SX4 models, which are produced at the Manesar plant. The joint venture has increased production for Maruti’s multi-utility vehicle Ertiga by 20%.
Analysts say the labour unrest will affect the company’s marketshare and stock.
“In the short-term, Maruti’s stock will remain under pressure due to uncertainty surrounding Manesar plant issue,” wrote Umesh Karne and Manashwi Banerjee of BRICS Securities Ltd in a 30 July report. “We believe Maruti will lose market share in the short term but if it decides to restart the plant within the next 10-15 days, it is unlikely to lose customers to competitors. But, if the lockout extends beyond a month or more, then its customers are likely to shift.”
According to BRICS, the company has lost 15,000 units in sales since the lockout started and Rs 750 crore in revenue.
“We may revise our estimates if the lockout continues for more than a month,” wrote Karne and Banerjee of BRICS. The brokerage has a “buy” rating on Maruti’s stock.
Siddiqui said Maruti hasn’t decided on a date to resume production at the Manesar plant.
Separately, in a statement on Wednesday, Society of Indian Automobile Manufacturers (Siam) said that its executive committee has condemned the violence at the Maruti plant after a meeting on 25 July.
While Siam said that violence of any kind cannot be allowed to be used as a means for forcing a decision, the mechanism for collective bargaining laid down by the laws of the land involving peaceful discussions and negotiations is the only acceptable mechanism. It asked the government to ensure the safety of employees working in the industry by creating a peaceful work environment.
“Central government needs to urgently conduct a detailed review of the labour laws which are today antiquated and require major reforms,” Siam said in the release. “All stakeholders need to be involved in the revision and modernization of the labour policies.”
Incidents like these are noticed globally by industry as well as investors, thereby vitiating the investment climate and damaging the overall image of the country as an investment destination, Siam said.