Following the partial resolution of one of the most significant industrial disputes in India in recent times, over 4,000 permanent workers of Maruti Udyog Limited (MUL) re-entered its factory at Gurgaon outside Delhi in early January. They had been protesting the imposition on 12 October 2000 of a Good Conduct Undertaking by the Maruti management. The undertaking stated: ‘I shall neither indulge in go-slow, nor resort to tool-down or stay-in strike or any other activity adversely affecting production and discipline.’ The management was forced to withdraw the undertaking. But the employees union's other demand of reinstating the ninety-two workers who had been dismissed or suspended during the course of the dispute was met only partially: only forty-six of these were reinstated by the management.
For three weeks preceding the withdrawal of the undertaking, Udyog Bhavan, which houses the industry ministry, had been surrounded by these Maruti workers day and night. It was a sight rarely seen before in Delhi: a sea of blue of protesting workers in their uniforms, confronting Maruti, Suzuki Motor Corporation and the government, both of whom jointly own MUL. Four workers sat on hunger strike through the sit-in. Two of them were lifted by the police. During their sit-in, the workers received solidarity and support from various political organizations in Delhi. This included a four-hour long cultural programme organized by Workers’ Solidarity, a vibrant programme of street theatre, and the recital of poems and revolutionary songs. The participating groups included the Disha Sanskritik Manch from Haryana (from where a majority of the workers hail), Begul Mazdoor Dasta, Asmita, Asur, AIFTU, Progressive Students Union, and Delhi Janwadi Adhikar Manch.
Central to the industrial dispute was the calculation of a productivity-based incentive. In 1988, the management had signed an agreement with the Maruti Udyog Employees Union that linked a part of the permanent workers' monthly remuneration with productivity levels: for any production above a base productivity of 41.5 cars per worker per year, workers would receive 65% of the saving on labour costs. This scheme was in operation until 1995. In 1995-96, the management unilaterally altered the terms of the scheme, resulting in workers getting significantly lower incentive amounts. The notification to this effect was in force until 31 March 1999. The Maruti workers, who were making 1,00,000 cars in 1988, manufactured twice that number by 1995, and over 4,00,000 cars in 1999-2000. It is this accelerated productivity that made the management alter the terms of the incentive scheme even as they pushed workers to produce all the more. Ever since March 1999, the present union had been demanding that the management restore incentive levels upon the base-level productivity agreed to in 1988. It also sought to finalize annual production targets, so as to limit the workload and stress upon each worker.
With no worthwhile response from the management on any of these demands, gate meetings were held in early September 2000, followed by a relay hunger strike from 18 September. In response, the management dismissed fourteen workers and suspended twelve others, including office bearers of the union. On 3 October, the workers went on a two-hour tool down per shift, and the general secretary and president of the union began an indefinite hunger strike.
Even at this stage, instead of initiating dialogue with the union, the management roped in the local police and administration, who lifted and broke the hunger strike on 6 October. Cases were filed against these office-bearers and they were jailed. It is at this point that the management imposed the Good Conduct Undertaking. Such a demand was completely illegal; no law of the land can compel workers to sign a document that curtails their political rights.
The management presented the dispute, a viewpoint faithfully parroted in the bourgeois media, as an unreasonable strike over wage demands. The workers, they said, cost the company Rs 22,000 a month, and were making ridiculously high demands of Rs 41,000 a month! These claims were, and continue to be, absurd. Average wages are merely Rs 7,500. Including the incentive they amount to Rs 11,000, a far cry from the lies the management is propagating. As it is, how much an incentive constitutes a real increase needs to be questioned given that workers are made to sweat that much more for the higher incomes.
Wages and salaries as a proportion of sales made by the company amounted to a mere 2 per cent in the year 1999-2000. This includes managerial salaries and remunerations. If one were to consider workers' wages alone, the wage bill amounts to a mere 0.85 per cent of sales! Wage costs have remained at these abysmally low levels in all the eighteen years that Maruti has been operational. Labour costs per Maruti car, whose cheapest brand currently sells for Rs 2,20,000, amount to a shockingly low Rs 1,950. This is the case even as capacities in MUL have increased only through in-house investments, not from new external investment. The huge profits earned by MUL have been made on the backs of these workers, and yet their share has never been more than one per cent of sales!
These wage costs are pushed even lower than they would have been by the management employing a large number of non-permanent workers, in contravention to existing labour law. Besides the 4,700 permanent workers, there are over three thousand contract workers. Half of these are in the paint shop and machine shop. Seven hundred and fifty are involved in material handling, which directly assists the production line. Most of the rest work in sanitation, canteen and security, all of which is perennial work. Yet, they are paid only fifty to sixty rupees a day. Then there are over 1,100 young apprentices who are made to slog for a year for Rs 600 a month in the hope of being made permanent, but a number of them are thrown out at the end of the year. During the nearly three-month lockout, these contract workers and apprentices were made to work 12 hour shifts, and new apprentices were hurriedly drafted from training institutes, to ensure some production took place. The latter have doubtless been summarily dismissed once the undertaking was withdrawn and normal production resumed.
The Consequences of Productivity-based Wage Systems: At what cost do the workers earn the wage levels mentioned above? They work in closely monitored eight-and-a-half hour shifts, with a break of precisely seven minutes, and half an hour for lunch. No worker is allowed even the slightest respite outside of these small breaks, no time to even drink water or to urinate. Some of this work is in extremely adverse physical circumstances, be it having to work in the heat of the welding shop, or (for many workers) having to work in a bent position throughout. There is high recurrence of illness and frequent complaints of kidney problems. All these are the consequences of the Japanese-style kaizen, or ‘continuous improvement’. Cases of stress and nervous disorders are common among workers. One can well imagine this with each worker producing well over one-and-a-half times the number of cars he was making barely five years ago. The working hours have stayed the same; the work has become faster and faster.
The connection between productivity-based incentive schemes and workers' ill-health is obvious. Such incentive schemes can be detrimental to workers in other ways as well. Incentive-based schemes result in a slowing down in the number of workers hired. The increase in production from 1,00,000 to 4,00,000 cars a year over the last twelve years suggests that several hundred more workers could have been employed than the incremental increases that have taken place during this period.
And in the event of declining market share or declining sales, it would result in declining production levels and hence lower wages for workers, against which they would have no legal redress. The long-term consequences in such a situation would be retrenchment, to ensure that productivity is not lowered. The link of incentive schemes with workers' wages also cannot be bereft of the influence of changing market trends. In an adverse market situation, a very real situation for Maruti what with its declining market share, workers' jobs and collective rights become the first casualty. Indeed, workers in the automobile market globally are vulnerable to fluctuations, as is evident in the case of Daewoo's workers in South Korea and in India: fluctuations in market share, in government policy, in financial markets, and takeovers, over which they have little or no control.
In fact, the Maruti dispute must be viewed within a wider context, not all of which is transparent, given that some of the moves were being made and continue to be made within the corridors of power. Even as the dispute unfolded, there began a process of divesting the government's fifty per cent stake in Maruti, part of the general disinvestment programme that successive governments have been desperately pushing for the better part of a decade. That the disinvestment process and what was effectively a lock-out for nearly 5,000 workers happened at the same time can scarcely be a coincidence. Which is perhaps why the union chose to re-enter the factory with its demands met only partially. It was undoubtedly a compromise and they would need to re-negotiate the question of the incentive scheme from a position of greater consolidation. But it is clear that any struggle against the total privatization of Maruti can only happen from within the workplace, from the shop-floor.
Click here to return to the April 2001 index.