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Business News/ Companies / News/  Maruti Suzuki strips three COOs of executive powers

Maruti Suzuki strips three COOs of executive powers

The executives, two of whom were in charge at Manesar during 2012 labour strike, will now be 'chief mentors'

Photo: Pradeep Gaur/MintPremium
Photo: Pradeep Gaur/Mint

New Delhi: India’s largest car maker by market share, Maruti Suzuki India Ltd, has stripped three chief operating officers (COOs) of their executive powers, according to three people familiar with the matter. Two of the executives were in charge during the labour strike that led to an outbreak of violence at its Manesar plant in 2012.

An order to this effect was issued on Wednesday, said the people, none of whom wished to be identified.

The three executives stripped of their powers are S.Y. Siddiqui, the COO in charge of human resources, legal affairs, finance, administration, and information technology; COO (production) M.M. Singh, and COO (supply chain) S. Maitra. In their new roles, the three officials will be “chief mentors".

Another Indian in a senior role, Mayank Pareek, COO of marketing and sales, has been promoted as senior executive officer.

A Maruti spokesperson declined to comment. Maruti chairman R.C. Bhargava could not be reached for comment. Siddiqui, Singh and Maitra did not respond to phone calls made or text messages sent to their mobile phone on Thursday evening. Mint has not reviewed a copy of the order.

Senior executives in Maruti have typically been given two designations, one along the lines followed by the Japanese parent, and another along more commonly prevailing lines across organizations.

For instance, the COOs were also designated senior managing executive officer or managing executive officer. These designations have now been scrapped, said one of the three people familiar with the matter. This person added that the roles of chief mentors were yet to be defined. “It is also not clear who will head these departments now," he said.

The three affected executives were the senior-most Indians in the company besides Bhargava, who is non-executive chairman.

This is the second move by Suzuki Motor Corp., the Japanese parent of Maruti, to tighten its grip over the Indian subsidiary.

In April 2013, Mint reported that Suzuki was deputing two Japanese officials to keep a close watch on the plant and production activities in the company.

Toshiaki Hasuike was named joint managing director of Maruti while Toshio Ozawa was brought in as an adviser for human resource activities.

These changes redefined and limited the roles of senior executives at Maruti including Singh, Siddiqui, and Maitra.

While Singh and Maitra were directly reporting to the joint managing director, Siddiqui was working in close collaboration with the human resource adviser.

Maruti is also headed by a Japanese, Kenichi Ayukawa, who is managing director and chief executive.

In 2012, production at Maruti’s Manesar plant, in Haryana, was disrupted by mob violence that 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 to press for a wage hike and other perks. Later, Maruti suspended at least 550 workers allegedly involved in the violence.

Singh and Siddiqui were in charge at the Manesar plant at the time the violence took place.

The second and third persons familiar with the matter said it was possible that the changes had been made with the objective of inducting more Japanese executives, putting a younger leadership team in place, or simply punishing some of the executives in charge during the Manesar incident.

The first executive added that Maruti has also seen some changes in the middle management structure so as to “realign the Indian organization with the Japanese parent".

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 in Europe and Japan have suffered. In the last fiscal, the company’s car sales grew 0.25% to 1.05 million units in the domestic market.

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Published: 02 May 2014, 12:02 AM IST
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