Maruti Suzuki's new union demands separate, higher wage revision

NEW DELHI: The newly formed Maruti Suzuki Workers' Union is pressing for a higher revision of wages at the Manesar plant of India's biggest carmaker that has been struggling to bounce back after the prolonged labour unrest last year. This poses a fresh challenge to the Maruti Suzuki management which is also negotiating with the Gurgaon-based Maruti Udyog Kamgar Union that has already demanded double-digit pay increase. The 30-year-old union had won a 6% raise for its 3,000 plus members in 2009. The Manesar-based union, however, believes the salaries of its 1,200 members should be raised more substantially because they man a more automated plant that requires a greater skill set. It plans to launch simultaneous negotiations with the management over wage revisions that will guide the compensation packages for the next three years beginning April. Maruti declined to comment on the broad contours of the ongoing negotiations and did not respond to an email query. "We are putting a fresh demand and are not going to settle with the MUKU's charter," said MSWU's general secretary Sarabjeet Singh. "We are now a separate, independent entity with a mandate from the government as well as the management to stake a claim for the workers at the Manesar facility. We will put forth our own requirements primarily based on the needs of the Manesar plant workers." A senior executive who did not wish to be named said the management is keen to settle the issue amicably especially because Maruti's speedy revival hinges on its diesel cars that account for 90% sales of the models that have a diesel variant. Most of these cars, including the new Swift hatchback and the new DZire compact sedan, are made at the Manesar plant. "While we cannot have a different wage structure for the two plants, given the importance of high-margin cars rolling out from Manesar a lenient approach will guide the management into fresh negotiations," the executive said. Besides higher salaries, the unions are demanding streamlining of promotions and matching of perks such as productivity incentives with the steadily rising cost of living and the diminishing opportunities for growth in the wake of increasing automation. Maruti has already worked out a backup plan to move to Gujarat, where labour costs are expected to be lower with higher productivity from easily available skilled labour. It also plans to more than double its diesel engine capacity to around 500,000 units a year. The carmaker has inked a deal with Fiat India to purchase 300,000 diesel engines until 2014, by when it hopes to establish its own diesel-engine facility at Gurgaon. It currently sources diesel engines from Suzuki Powertrain India, a joint venture between parent Suzuki Motor and Maruit Suzuki that is scaling up capacity to 300,000 engines from 240,000 annually at Manesar.