Posted by: Barry Secrest

The killing of a manager as workers rioted last week at the Maruti Suzuki auto plant outside New Delhi has shaken up Indian boardrooms, undercut foreign-investor confidence and sparked debate over the social cost of India’s fast-paced economy.

Cr Note: The tie-in to the Arab Spring was our own connection, but this instance sounds strikingly similar to the angst parlayed from earlier outbursts internationally….

By Mark Magnier

Los Angeles Times

MANESAR, India — The windows are dark, dozens of vehicles smashed and the burned-out gate shrouded in canvas. A notice in English and Hindi informs the plant’s 3,000 workers they’re locked out until further notice.

The killing of a manager as workers rioted last week at the Maruti Suzuki auto plant in Manesar, outside New Delhi, has shaken up Indian boardrooms, undercut foreign-investor confidence and sparked debate over the social cost of India’s fast-paced economy.

Reports differ on what triggered the July 18 uprising, although most say a supervisor and a worker argued early in the day. Some say the worker was slapped; others cite a caste insult, although the two were reportedly of the same caste. Still others suggest the union was looking for an excuse to demonstrate.

As tension mounted, labor organizers asked day-shift workers to stay late, and the crowd swelled as the night crew arrived. About 6:30 p.m., workers wielding tools, car parts and other makeshift weapons attacked managers, including two senior Japanese executives, injuring at least 97 people. A fire erupted.

A few hours later, the charred remains of human-resources manager Awanish Kumar Dev were found. He apparently had been unable to escape the flames because his legs were fractured; his face was so seriously beaten that he was identified by a gold tooth. About 90 workers were arrested. Union officials fled and could not be reached for comment.

Deputy general manager Rajesh Malhotra, who was at the plant that day, said the catalyst was the suspension of a worker for hitting his supervisor. That prompted the union to flex its muscle in hope that management would reverse its decision, he said.

Malhotra, 52, said he was attacked early in the disturbance by at least 20 of the 600 rampaging workers, forcing him to play dead to survive. He was hospitalized with bruises. “The allegations of caste slurs are baseless,” he said.

Differing attitudes

As Indian businesses, labor experts and the news media examine the deadly event, some say rising expectations of a new generation of young, educated workers have spurred resentment over the widening gap between rich and poor. Others cite Indian attitudes toward discipline, punctuality and management-worker relations.

“Culturally, Indians and Japanese are far apart,” the Economic Times newspaper wrote.

Also spurring distrust are structural issues, including outsourcing that has swept India’s auto industry — “temporary” workers earn 40 percent less than “permanent” employees — and increasingly restrictive work rules as competition heats up and globalization sweeps through India. More than two-thirds of workers at the Manesar plant were on temporary contracts.

About 100 national and state laws govern labor issues, including the Trade Union Act of 1926, under India’s creaky legal system. Many workers believe their ability to bargain collectively is impaired, although strikes and work stoppages have declined sharply since 2005. Behind the latest deadly clash, analysts say, is a fight by labor organizers to make inroads in a tough environment.

“This is not an issue of wages,” said Bhowmik Sharit, a labor-studies professor at Mumbai’s Tata Institute of Social Sciences. “The underdog wants dignity.”

But the incident also suggests for some how India has changed. Where most large companies once were viewed with deep suspicion by the left-leaning electorate, states increasingly are competing for investment and jobs. Within hours of Dev’s death, rumors spread that Maruti Suzuki would relocate the plant to Gujarat state, with its reputation for fast decisions, tax breaks and limited corruption.

“You wouldn’t have seen that 20 years ago,” said Gurcharan Das, an author, columnist and former head of Procter & Gamble India. “It used to be everyone thought they were doing you a big favor by letting you invest.”

Worker complaints

In a country where conducting business can be frustrated by the frequent intersection of political parties, thugs, populism and labor groups, most observers agree Dev’s death will further complicate India’s bid to attract foreign investment.

“You shouldn’t read national implications into this,” said Surjit Bhalla, managing director of Oxus Research and Investments. “But there’s no denying, when foreigners see this, they’ll be scared off, in a country that sees itself as modern.”

Maruti Suzuki, established in the early 1980s, is widely credited with revolutionizing the nation’s auto industry, overtaking India’s charming if outdated Ambassador car to capture 45 percent of the passenger-car market. But its labor-relations record has been less impressive, marked by work stoppages, strikes and enmity.

“It’s very well run, very cost-conscious,” said Raamdeo Agrawal, managing director of Motilal Oswal Financial Services. “But I’d hold the management responsible.”

Workers complain of being docked as much as half a day’s pay for being a few seconds late or stepping away from the production line, and of enduring eight-hour shifts broken by one 7.5-minute tea and bathroom break and 30 minutes for lunch served a quarter-mile away.

Dev, who is survived by his wife and 16-year-old son, wasn’t the first manager at a foreign-owned plant to be killed during labor unrest, and human-resources managers who enforce foreign rules often attract the most anger from workers.