Maruti Suzuki to adopt 40 ITIs to create customized labour pool
New Delhi: Maruti Suzuki India Ltd is adopting 40 state-run technical schools to create a customized labour pool it will need to fuel its ₹ 18,000 crore expansion in Gujarat.
Ensuring supply: A Maruti Suzuki factory in Manesar. The 50 ITIs adopted by Maruti will not only ensure a steady supply of trained personnel to the auto maker, but also to its dealers and vendors. (Ramesh Pathania/Mint)
“A pool is being created. Yes, it will help (the firm’s growth)," the official said. “We can utilize our exposure (of managing 10 ITIs)."
When a company adopts a technical institute, it boosts physical infrastructure in the campus, provides tools and machinery for training, modifies course content to bring it in sync with industry requirements, and trains faculty to update their knowledge base.
Maruti has two factories in Haryana and plans to invest ₹ 18,000 crore in Gujarat that would entail building at least three assembly lines and setting up a vendor base. The Gujarat factory will double the company’s production capacity to three million cars by 2015.
The 50 ITIs, mostly in northern India, will not only ensure a steady supply of trained personnel to the auto maker, but also to its dealers and vendors such as Sona Koyo, Amtek Auto Ltd and Rico Auto Industries Ltd.
A Maruti spokesman confirmed the adoption of additional ITIs. “There will be a lot of courses under these ITIs," he said. “However, people who will be trained for automobile work will be absorbed by Maruti or its vendors or dealers."
“If you hire from these ITIs, they are normally better than any other diploma holders," said a spokesperson of Sona Koyo Steering System Ltd. “That’s because apart from the training they get at the institute level, they also undergo extensive in-company training at respective plants before being hired."
Private firms adopting ITIs create a win-win situation, according to Sharda Prasad, director general at Directorate General of Employment and Training, which operates under the labour ministry.
“The adoption of government ITIs help the cause of modernization, and from the company perspective, it helps them to get a customized workforce," Prasad said.
“The move is good as vocational institutes like ITIs get a facelift, but it may have been a long-term strategy of the auto maker to bail it out during labour unrest," said a labour activist, who requested anonymity. “They can also retrain the existing workers though these ITIs, knowing that the auto sector needs to upgrade its own technology usage regularly."
Last year, Maruti’s production was hampered by a series of strikes. Due to the labour unrest, the firm saw its market share falling seven percentage points to 38% at the end of the fiscal ending 31 March, according to lobby group Society of Indian Automobile Manufacturers.
To be sure, the company’s spokesman said the move to adopt government-run ITIs is not focused on labour relations. The company views this as a corporate social responsibility initiative, he added.
Abhey Yograj, chairman and chief executive of Tecnova India Pvt. Ltd, a consulting firm that tracks the sector, tended to agree with this and said the initiative can definitely help create an efficient, job-ready labour pool that the company can use while charting its growth plan. “They will be great resources," Yograj said.
Corporate houses adopting ITIs has helped in many ways, according to Prasad.
“ITIs are getting better infrastructure, contemporary curricula in sync with the industry demand," he said. “It also improves their placement record."
The ITIs adopted by various companies such as the Taj Group, Hindustan Unilever Ltd, Videocon Industries Ltd, India Cements Ltd and Punj Lloyd Ltd now have a placement record of around 85%, Prasad said. Placements from ITIs are typically much lower than this, although specific numbers are hard to come by.
Industry lobbies that have facilitated the corporate adoption say these ITIs are now a improved lot.
“The best part is now these ITIs and industry have a better connection. They understand each other’s need to a large extent," said Sobha Mishra, head of the education wing at the Federation of Indian Chambers of Commerce and Industry. “The in-company training (of students), contemporary curricula, and training of the faculty by the industry have helped the improvement."