Maruti Suzuki India Limited (MSIL) has been established and incorporated since 1983. MSIL is a subsidy of the Suzuki Motor Corporation, Japan. Maruti Suzuki has been renowned for producing the most fuel efficient, affordable and reliable cars and therefore has been the leader of the Indian car market for over the past two and halve decades.

On 18^th July 2012 at Maruti’s labour plant, industrial disputes broke out when workers became aggressive and over 96 staff members were injured while also leading to the death of a human resource manager. More then two-thirds of the employees were involved in the strike, causing Maruti to lose about INR 75 crores ($11.81 million) in revenue and INR 8 crores ($1.3 million) in operating profit daily while also halting Maruti’s production line causing it to lose around 1200-1400 units daily.

The reason behind the dispute was perceived that pay disparities between permanent and contracted laborers and also the company’s refusal on forming another labour union triggered the outbreak. As the company acted unethically by paying different wages to each group of laborers, they chose not to make most of their contracted workers permanent and hence caused a large miscommunication between the management and the labour unions.

 Appendix 1 – Pay Packages

 Appendix 2 – Decrease market share in 2012 due to dispute

Appendix 3 – Quarter 2 results. 2011 vs 2012

 

Bibliography:

1 – http://www.marutisuzuki.com/about-us.aspx>.

2 – http://www.marutisuzuki.com/Maruti-Suzukideclares-lock-out-at-Manesar-Plant.aspx

3 – http://www.inautonews.com/the-closing-of-manesar-plant-costs-maruti-a-15-20-profit-loss

4 – http://www.business-standard.com/india/news/has-maruti-foundsolution-for-its-labour-woes/496280

5 – http://articles.economictimes.indiatimes.com/2012-09-14/news/33844343_1_diesel-models-maruti-suzuki-manesar