The Gurgaon-Manesar belt, which apart from being the largest for automotives in the country producing two-thirds of vehicles manufactured in the country,
is no stranger to labour unrest. Memories of the violence that eripted on July 25, 2005, resulting in over 150 people getting injured in a clash between the police and the agitating workers of HMSI, still haunt the belt that aspires to be a global auto hub in the long run. In fact, the relation of this auto belt with labour unrest goes beyond the year 2005, when even the market leader, Maruti Suzuki (then Maruti Udyog Ltd) wasn’t spared. Its workers went on an indefinite strike due to the claimed forged incentive scheme. But the trouble had been brewing since the year 2000, when around 150 employees were retrenched and 2,200 more were forced to opt for voluntary retirement. The focus, however, was quickly shifted when one of the workers was found dead under inexplicable circumstances near the company's premises and another died in a nearby hospital. The strike in the year 2005 dragged on for three months, severely impacting the automaker’s profitability.
However, even other auto companies have been facing labour issues in one manner or another for a long time now and experts believe the situation will not change going forward. Be it the recent strike at Hyundai’s Sriperumbudur facility or the intrigue at the Bajaj Auto’s Akurdi plant, labour unrest and automotive industry share a long history. “The recent Gurgaon incident was very sad and I hope nothing of this sort happens again. We are in the business of automotive where the workforce is very important and I believe everything can be sorted out by talking to each other,” explains V.C. Sehgal, Chairman, Samvardhana Motherson Group, which currently holds two plants in Gurgaon and has no further plans of taking the figure up in the short run. In fact, HMSI is still bullish on reaching the desired target of 12.5 lakh units, up from 10.7 lakh units last year achieving a 17% year on year growth. In fact, the company has recently started a new assembly line in the Manesar plant, which will initially produce around 300-400 units/day taking it up to 1000 units in the next few weeks. “We expect normalcy in our plant in the next few days and with the third assembly line already being operational, we believe that we will be able to meet the desired sales target,” avers Shinji Aoyama, CEO, HMSI.
In fact, an auto expert added on conditions of anonymity that “the recent incident at Rico and similar to what happened at HMSI and it will repeat in one or the other manner in the automotive industry. In fact, the industry will keep on facing labour issues as being a labour intensive industry, the auto majors will have to deal with this problem. But this doesn’t put a question mark on the growth of the automotive industry in India,” the expert added. However, things are getting better by the day as Rico has already agreed to recognise the employees union, fulfilling one of the long-standing demands of the workers.
Similarly, HMSI’s workers have already been given a hike. They will resume work in a few days from now. But labour problems like these will continue in times to come. While that might act as an impediment for the auto majors in the short-run, the long-term prospects of the sector, as the analyst has predicted, is still bright. The auto industry in India seems well poised to meet its desired targets.
is no stranger to labour unrest. Memories of the violence that eripted on July 25, 2005, resulting in over 150 people getting injured in a clash between the police and the agitating workers of HMSI, still haunt the belt that aspires to be a global auto hub in the long run. In fact, the relation of this auto belt with labour unrest goes beyond the year 2005, when even the market leader, Maruti Suzuki (then Maruti Udyog Ltd) wasn’t spared. Its workers went on an indefinite strike due to the claimed forged incentive scheme. But the trouble had been brewing since the year 2000, when around 150 employees were retrenched and 2,200 more were forced to opt for voluntary retirement. The focus, however, was quickly shifted when one of the workers was found dead under inexplicable circumstances near the company's premises and another died in a nearby hospital. The strike in the year 2005 dragged on for three months, severely impacting the automaker’s profitability.However, even other auto companies have been facing labour issues in one manner or another for a long time now and experts believe the situation will not change going forward. Be it the recent strike at Hyundai’s Sriperumbudur facility or the intrigue at the Bajaj Auto’s Akurdi plant, labour unrest and automotive industry share a long history. “The recent Gurgaon incident was very sad and I hope nothing of this sort happens again. We are in the business of automotive where the workforce is very important and I believe everything can be sorted out by talking to each other,” explains V.C. Sehgal, Chairman, Samvardhana Motherson Group, which currently holds two plants in Gurgaon and has no further plans of taking the figure up in the short run. In fact, HMSI is still bullish on reaching the desired target of 12.5 lakh units, up from 10.7 lakh units last year achieving a 17% year on year growth. In fact, the company has recently started a new assembly line in the Manesar plant, which will initially produce around 300-400 units/day taking it up to 1000 units in the next few weeks. “We expect normalcy in our plant in the next few days and with the third assembly line already being operational, we believe that we will be able to meet the desired sales target,” avers Shinji Aoyama, CEO, HMSI.
In fact, an auto expert added on conditions of anonymity that “the recent incident at Rico and similar to what happened at HMSI and it will repeat in one or the other manner in the automotive industry. In fact, the industry will keep on facing labour issues as being a labour intensive industry, the auto majors will have to deal with this problem. But this doesn’t put a question mark on the growth of the automotive industry in India,” the expert added. However, things are getting better by the day as Rico has already agreed to recognise the employees union, fulfilling one of the long-standing demands of the workers.
Similarly, HMSI’s workers have already been given a hike. They will resume work in a few days from now. But labour problems like these will continue in times to come. While that might act as an impediment for the auto majors in the short-run, the long-term prospects of the sector, as the analyst has predicted, is still bright. The auto industry in India seems well poised to meet its desired targets.
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