Maruti is experiencing what organisations in West Bengal earlier, and later those based in Maharashtra experienced. I will not be surprised if the other industries in Gurgaon and Manesar belt reduce operations or at least their dependency on operations there.
Gujarat is wooing them!
There is a pattern to the growth story of these states.
There was a stage, till 1990s, when the Government was supposed to play the role of the big brother in Industrial relations. What they did was to support the labour movement in a thoughtless manner. It became very difficult to carry on business in West Bengal, Kerala and later in Maharashtra. In WB and Kerala the apathy towards employers was to be seen to be believed. The Government which has wide range of powers could have tamed the parties but managing industrial relations with an eye on political agenda is never going to produce the right result. That was where things went wrong. Political interests took priority over labour or industry interests.
The industrial belt from Vikhroli to Thane in Mumbai and the industrial belt on Thane Belapur Road have more offices and malls than factories. The manufacturing has moved to other states, particularly to Gujarat.
Uttar Pradesh [jokingly referred to as ‘Ulta Pradesh’ by some, because anything can go wrong there all of a sudden] has a kind of lawlessness which is shocking to anybody coming from other states. The local netas make running an establishment very difficult. Corruption is at an unimaginable level. This is one state where chief executives of many big organisations had to appear in criminal courts in labour matters because cases were filed for political reasons or because threats of extracting money failed.
The labour inspections in UP and recently in Maharashtra were blatant exercises in extracting money from organisations. When Diwali festival is on the anvil these activities gain a great momentum. [Now that Anna Hazare has led an assault on corruption, let us watch what happens this year!]
The third party intervention role of the Government was almost given up after 90s when parties were left to fend for themselves. The employers who were underdog till then became tigers and carried out downsizing ruthlessly. Competition however has driven a sense in the minds of both over a period and both the employers and labour understood that it was suicidal to have strife for a long duration.
Maruti has already moved its Swift production to Gurgaon. It will be safe to produce there as the representative status of the union at Gurgaon is challenged by the Manesar union. So it has a reason to support Maruti by producing extra vehicles. But the reputation for quality is already falling and customers are moving away. Maruti on its part is fortifying itself by opening up a facility at Gujarat. Once that is in place, Maruti will cut down the Manesar union to size. This is a very predictable game!
What is the Government doing in this entire scenario? Surely it has powers, legal and political, to keep the wheels of the industry moving. Maruti has so far sacked 21 workers from the plant which is currently producing only 200 cars per day from a maximum capacity of around 900. Old stalwarts in IR will remember that Premier Auto produced 40 cars as a protest taking the company to the precipice.
Expecting such an action from the Government’s labour department may appear a huge expectation. But Gujarat is able to rein in parties; say so openly that it guarantees industrial peace, why can’t others?