What ails Maruti's Manesar plant

What began as a sporadic labour unrest earlier this summer at its Manesar unit has prolonged, reappeared and gained a pattern, compelling Maruti Suzuki to go slow on production plans.

The country's largest car-maker now believes it may take a while before normalcy returns, but company chairman R C Bhargava tells Sharmistha Mukherjee that there won't be a reduction on its dependence on the facility in Haryana.

Edited excerpts:

After 10 days of sit-in, talks have re-started with the protesting workers at the Manesar unit. How have they progressed?

I do not think much progress has happened in the talks with the workers so far.

Does it concern the management that the protesting workers have this time decided to keep at bay the only recognised union of Maruti Suzuki?

It is up to them to decide whom to involve in the talks.

The reality is that the workers at Manesar do not have membership in Maruti Udyog Kamgar Union.

They have said they do not want the union to represent them. We are now talking with them directly in the presence of Haryana government officials.

Labour troubles have crippled production at Manesar for over four months. What is coming in the way of framing a resolution?

What went wrong is very clear.

The Manesar workers, in two separate instances, negotiated with the management.

They then retracted from settlements that were arrived at in front of officials of the Haryana government.

They back-tracked and resumed their agitation.

If workers violate legal settlements, there is nothing the company can do.

Notices have been sent to the signatories of the agreement and proceedings have been initiated by the authorities now.

The crux of the problem seems to the workers' demand for representation. Why is the company resisting the recognition of a second union?

It is the state government that registers a labour union. Maruti Suzuki cannot recognise a union that does not exist.

Maruti has suffered revenue losses of Rs 1,700 crore (Rs 17 billion) since the beginning of the standoff. Would you consider reducing dependence on Manesar because of labour issues at the unit?

We are not reducing dependence on Manesar.

It is very important in our scheme of things.

But the labour unrest at Manesar will have an adverse impact on future Japanese investment in the region.

Maruti Suzuki has been a successful instance of Japanese investment in India.

Now with labour disputes at the company, it would be difficult to promote investment in the area.

The frequent strikes at Manesar have led to production losses mounting to over 55,000 units. Would you be able to achieve last year's sales numbers?

I cannot say when we will be able to restore normalcy. . . We need to have both the assembly lines at Manesar fully operational.

Today, we started production at our facilities . . . We aim to work at half our installed capacity across our Gurgaon and Manesar units.

Once we are clear that the workers will not resort to stoppages in production, we can sit down and draw out plans for the future.
Right now, it is very difficult to make concrete growth projections.

Image: R C Bhargava