Analysts turn the heat on union leaders

A conference call organised by a brokerage between a trade union leader and analysts on yesterday’s violent incident at Maruti Suzuki India’s Manesar plant, in which one person was killed, turned into a heated debate.

During the call, analysts came down heavily on D L Sachdev, secretary of the All India Trade Union Congress (Aituc), for the latest developments at the plant following which the management has shut the plant. The union leader, however, blamed the management of India’s largest passenger car maker for “inhuman working condition” at its plants.

The interaction was organised by Nirmal Bang to give the workers’ side of the story to the investor and analyst community. While Sachdev ruled out a bipartite interaction at this point, analysts demanded an explanation for the loss of life at the plant.

While the Maruti union is not affiliated to Aituc, Nirmal Bang said Sachdev was conveying the issues faced by the workers in the industrial belt, where Maruti and some other companies have facilities. If the facility remains shut, Maruti is staring at a daily revenue loss of Rs 60 crore as the unit produces 1,500 vehicles per day.

While describing the problems faced by workers, Sachdev said contract workers were being paid minimum wages prescribed by the state rather than the minimum wages prescribed for the industry. While regular workers are paid Rs 13,000, contract workers are paid Rs 5000 per month. Sachdev has issued various other issues against the management, but failed to give specific instances.

Investors and analysts, however, said this time the company was not to be blamed.

“It started with some kind of an argument and it got out of control. Maruti has a point that the mob has acted intentionally and destroyed facilities,” said Deepak Jain, an auto analyst at stock broker Sharekhan:

“Sachdev has alleged that the contract workers are paid less than regular. However, if that be the case, then why did the registered union not go to court? Resorting to violence is a negative on part of workers rather than the company,” he added.

The immediate cause, according to the union leader, behind Wednesday’s fracas was a casteist remark allegedly made by a supervisor to a worker. The worker was suspended and when he was not reinstated even after the management’s promise, the workers lost control. Maruti’s statement, on the other hand, said that the workers’ union was demanding reinstatement of a worker who was suspended for beating up a supervisor.

Analysts also demanded from Sachdev justification for the violence.

Asked if other auto companies followed a similar model of hiring a higher proportion of contract workers, Yadav said that was the case, but he was not sure of the proportion in other companies. He also alleged working conditions at Maruti’s plants “were inhuman” and that the company did not attempt to understand the ethos of the country.