Home > companies > news > Maruti’s Manesar fallout: a management shuffle

New Delhi/Mumbai: Maruti Suzuki India Ltd, India’s largest car maker, is in the process of making several top management changes, with its Japanese parent wanting to closely oversee several critical functions, including human resources activities.

The move appears to be prompted by growing competition in the Indian car market and a late reaction to last year’s labour unrest at the company’s Manesar factory that ended with the death of a manager.

Suzuki Motor Corp. is deputing two key Japanese officials to keep a close watch on the plant and production activities in the company.

Toshiaki Hasuike, who is serving as managing officer at Suzuki, will be the joint managing director of Maruti, while Toshio Ozawa will come in as an adviser for human resource activities. Hasuike also served as a director on the Maruti board for a brief period between September 2007 and January 2008.

The Maruti board is expected to approve these changes in a board meeting scheduled on 26 April.

The changes may redefine and limit the roles of senior executives at Maruti including M.M. Singh, chief operating officer (production), S.Y. Siddiqui, chief operating officer (human resource and administration) and S. Maitra, managing executive officer (supply chain).

While Singh and Maitra will now directly report to the joint managing director, Siddiqui will work in close collaboration with the human resource adviser, who will be sending reports on a regular basis to the Suzuki chairman.

Earlier this month, the company announced the appointment of its new managing director and chief executive Kenichi Ayukawa, who succeeded Shinzo Nakanishi.

“At the moment, there is only one change (appointment of the new managing director and chief executive) and that has been announced," Maruti chairman R.C. Bhargava said: “Apart from that, I can’t say anything as the agenda for the board meeting has not been prepared".

A company spokesperson declined comment on the matter.

“The Suzuki chairman is not very happy with the way things were handled at the Manesar plant. Post-violence, Suzuki had asked the company to find out the reasons but the company has been unable to provide concrete reasons," said a person familiar with the matter who asked not to be identified.

Last year, production at Maruti’s Manesar plant was disrupted by mob violence, which left a senior human resource manager dead. The incident was followed by a month-long lockout. Prior to the violence, the workers had gone on strike demanding wage hike and other facilities. Later, Maruti suspended at least 550 workers allegedly involved in the violence.

“In Japan, there has not been any strike in the last 58 years. The idea behind bringing these Japanese officials is to align the HR processes followed in Japan with that of India," said another person familiar with the development who also spoke on condition of anonymity.

India has been driving Suzuki’s growth, with Maruti contributing 40% of the parent’s net profit. In contrast, Suzuki has pulled out of the US market and its sales have suffered in Europe and Japan.

In the last fiscal, the company’s car sales grew 3.3% to 1.13 million units.

Shares of Maruti fell 0.62% to 1,407.85 on BSE at the close of trading on Tuesday. The exchange’s benchmark Sensex fell 1.15% to 18,226.48.

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