Tuesday, September 18, 2012

Investigating the Maruti fiasco


 
"Maruti's Manesar plant GM(HR) burned to death, 91 workers arrested"

"Violence at Maruti Suzuki's Manesar plant: Workers used shock absorbers to damage cars"

"Maruti Suzuki’s Manesar plant violence: Time to bring trade union leaders of under graft law"


Here was one headline I found hard to ignore. It caught my eye thanks to two reasons. First, I love this sector. If you have visited this blog before, you would notice that most of my thought process has been limited to automobiles, roads and such things. Second, I have seen this industry real close thanks to my father. He has been in this sector even before I realized that my thumb had functionalities other than satiating my toothless mouth.
So it really saddened me to read of the demise of a HR manager and that too in such a manner. The other managers were robbed off their dignity when they were assaulted with automotive parts, suspension rods and what not.

What just happened here? Was it a management failure or a natural outcome of the suppressed class that had been wronged all these years? Or is it an act of by socialist propogadists enticing people or worse: was it the the reds? Or had the Nazis resurfaced after all these years from their hiding?

To make a fair start, and more importantly to ensure that I am not assassinated by the radicals, let us admit that Suzuki does not come out 100% clean. I have seen the way my father deals with labor issues. At times I've complained that he's being too slow or not acted fully in the guise of being 'careful'. At times I even wonder why trivial issues are brought to his office. But now I see the difference. Our countrymen at leadership positions do understand the dynamics of our country. India is a case of wrong people empowered, politically connected and a legal system which contrary to the public opinion is biased to the supposedly weak and oppressed. The Japanese on the other hand regard employees as individuals who are paid to do their jobs: period. If there's any problem with your job, expect consequences. Which is fair but then this attempt to confront the traditional Indian way of things may not go down very well. Also there's an article from a friend in economic times showing the wage percentage (of total cost) increase graph of suzuki lagging behind that of Hero Honda.

Having said that, nothing justifies what happened. Inspite of all its aggressive and to the point management style, I'd still give Suzuki a clan chit. So who is to blame??

The way I see it:
1. The People
2. Real Estate bubble
3. Political games

1. The People 
First the people. Let's start with their demands. Check out this article. Even if the numbers here are exaggerated, let us accept the fact that the workers want a salary increase beyond 20 k a month. Let's get some clarity by putting things into perspective. 20k is the amount that an average software engineer makes when he\she has graduated and just joined. He\she might just have an education loan and would be posted in a city that boasts of a higher cost of living (Bangalore is more expensive than Manesar or Bhiwadi for sure). 20k or less is what an engineer makes in a decent production firm. I wonder where the blue collar gets the idea of such demands. One fact I can present to you is that the worker body has learnt to read the balance sheets. Though they are more informed, the mentality is yet to evolve. I heard a manager in my dad's circles who was telling me how hard it was to shake the workers of their socialist mentality. According to them, the entire profit was rightfully theirs and ought to be distributed to them without any delay. Investments, maintaining a cash pile and any form of reserve and surplus accounts are all bull for these guys.


2. Real Estate bubble
The second factor I would like to bring forward is the real estate bubble. Though the impact is not direct, its impact is quite significant in the long run.
The population in this region has seen many amongst their own become rich overnight. Those labor intensive fields have been handed over to builders for truck loads of cash, flashy houses and SUV's. The consumption pattern has changed drastically. The workers residing here are dissatified seeing their kin, their neighbors moving up in life. Hence, they feel money has got quicker and their employers are depriving them of the above mentioned lifestyle. Why, my mother's driver is unhappy with his phone and his vehicle. As a matter of fact, upon inquiring I found out that the phone and motorcycle on his wishlist are the same or beyond my wishlist.

3. Political games
As we are clear about the rising desires, we need just a match to set a firestorm. And that spark was provided by the political clergy. Of the little I have conversed with union leaders: be it directly or indirectly, one thing is crystal clear. They are politically connected. Imagine an average worker who has a family waiting at home, who has moved up in life compared to his fellow village-folk after completing basic education and managing to get a job in a company everyone back at home loves to talk about. Now imagine the same fellow trying to instigate violence knowing very well of the consequences. Nope. Not happening. A person who would charge would be someone who knows that come what may, there's someone backing him (his backer did abandon him later, but he did not know this earlier). Politics is everywhere: in parliaments, in corporate offices and even in houses. However, the cronies chosen by our political class are the ones who are notorious enough to be carry out their deeds. These cronies are the most dangerous lot. They have fewer brain cells than you would find in a mosquito and they are stupidly reckless. Try stopping a lane jumper at the gurgaon toll plaza. 'Jaanta nahi main kaun hoon? Yeh XYZ MLA ki gaadi hai.'
Though I have little proof, by virtue of my vicinity to this sector- I have no doubt that it is creatures of this kind who started this. I've seen this plenty of such creatures to be talked out of my judgement.

Having said that, I still blame the rest of the workers for blindly following these idiots and not standing up against a few.

My suggestion to Suzuki:

Please uphold your decision to suspend the entire lot. Sometimes, it is fair to give a jolt to ensure that people wake up to reality.
More importantly, if it does not have enormous financial or strategic implications, stop investing in Haryana. Start disinvestment if possible. You do not have to be nice enough to care about a state after all this.

Sure, if you guys still think Suzuki is evil: you are welcome to join my new soon to be founded car company. To cater to the price sensitive Indian market, I will build cars from mud houses and scrap metal. To motivate people to work better 20 hours a day (and keeping costs low at the same time), I would use whips, boiling oil and the oriental torture techniques.

So the choice is with you people: embrace the MNCs or come work with me or worse: with those crony capitalists. 

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