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Protesters hit Delhi streets to demand probe of Maruti plant riots

New Delhi, Thu, 09 Aug 2012 ANI

New Delhi, Aug.9 (ANI): Protesters from various walks of life, including students and workers, took to the streets here on Thursday to demand a probe into the recent riots at the Maruti Suzuki plant in Manesar, Haryana.

They demanded that the management needed to look into the demands of the workers.

Iqbal, one of the protesters, assailed the management of Maruti Suzuki.

"Riots had broken on a very big scale at the Maruti Suzuki's plant in Manesar and in that a member of the management was killed. We are here to put across our point on behalf of the workers. The police arrested the workers after pressure was exerted on them by the media and the management. The workers were solely held responsible for the incident and this is not correct," said Iqbal.

Maruti's labour headache began in 2000. A standoff at another plant close to Manesar saw workers demanding better pay embark on hunger strikes, closing the factory for weeks.

That union was eventually broken by Maruti and replaced by another, which also represented staff at Manesar. Last year, workers launched strikes demanding recognition of a new, independent union

That was granted in October, but the slow formation of the Maruti Suzuki Workers Union and slow progress over fresh wage negotiations raised the temperature again.

Workers armed with iron bars and car parts rampaged through the Maruti Suzuki factory

While police investigate and the carmaker counts its mounting losses, the July 18 clash has rattled corporate India and shone a light on outdated and rigid labour laws in a country where cheap labour drives manufacturing and draws foreign investment. High inflation, a shortage of skilled labour and rising aspirations have emboldened workers' demands.

India's labour laws, some dating to the 1920s, make it difficult for large companies to fire permanent workers, forcing companies to hire large numbers of contractors - a bone of contention with many unions.

Maruti's factory, which made about 1,700 cars a day, including its top-selling Swift hatchback, is now shut, costing tens of millions of dollars, while over 2,500 workers have gone to ground, fearing punishment from Maruti or police, say residents and unions.

Maruti, already hit by rising costs on a weak rupee and falling sales, has seen its market value fall by $550 million since the riot. Shares in Japanese parent Suzuki Motor Corp (7269.T), which relied on Maruti for 28 percent of its net profit in the last fiscal year, fell as much as 10 percent after the riot, and later closed 3 percent lower than on July 18.

Manesar's best-paid manufacturing workers earn 25,000 rupees a month, and 1,500 of them, on temporary contracts, earn less than half that. Maruti's employee expenses as a share of net sales are the lowest among the five biggest domestic automakers in India, at 2.4 percent in the last fiscal year.

The union was pushing for a 15,000-rupees-per-month increase over three years when the riot flared.

A burgeoning aspirational middle class that relies mainly on bank loans for its purchases drives auto sales in India, which grew at a breakneck pace of 30 percent in 2010. But consistently rising interest rates have forced consumers to tighten their purse strings.

These strikes have raised questions over how India will preserve its status as a low-cost manufacturing base while avoiding growing discontent among employees.

The World Bank rates India's labour laws as among the most rigid and some analysts say they hurt corporate competitiveness in Asia's third-largest economy.

About 800 workers have been on strike since June 4 at the Manesar plant, demanding recognition of the new union. Maruti has one workers' union recognized by the management. It was unclear why the employees wanted another union recognized. (ANI)

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