Expanded Capacities – Squeezed Profits: Reports from Local Automobile Workers

Submitted by wojtek on December 27, 2011

In January 2011 automobile manufacturers in India announced both, record sales and plans to expand future capacities on one hand, and a drop in net profits on the other. We briefly summarise a report on Maruti Suzuki and add two reports by workers employed in the supply-chain.

Maruti Suzuki to raise output

ET, Jan 30 2011
The carmaker plans to raise annual manufacturing output to 1.4 million units starting April 2011. Maruti has been selling whatever it produces this financial year with the car market growing at 27 per cent due to strong economic fundamentals. Between April and December, Maruti Suzuki produced 924,103 units and sold 927,665 units, a growth of 31 per cent, according to Siam (Society of Indian Automobile Manufacturers). Meanwhile, the company reported an 18 per cent decline in net profit for the third quarter ended December 2010.

Shivam Autotech Worker

(58 Kilometer Stone, NH8, Binoula)
In 2007 workers at Shivam Autotech plant in Gurgaon occupied their factory and demanded ‘same conditions’ like their colleagues in nearby Binola. Following report is from Binola, four years later.
We manufacture parts for Hero Honda, Mico and Bosch. There are 750 workers hired through three different contractors, they work on 12 hours shifts. Their overtime is paid single rate. When the factory opened in September 1999 the majority of workers were permanent, their wages were very low, they were forced to work overtime, they were sworn at and insulted… in 2005 just when the Honda struggle took place management started religious offerings in the factory and increased wages by 900 Rs… the discontent remained and the permanent workers gave 1,100 Rs each in order to form an AITUC union. Workers went on five days strike after a colleague was mistreated, then AITUC and management came to a three-years agreement. Increase of monthly wages by 2,700 Rs in three instalments, an end to enforced overtime, no further verbal abuses, introduction of a group incentive scheme… and increased in the numbers of workers hired through contractor. Initially the permanent workers were satisfied, but this did not last for too long… Now half of the work-force is hired through contractor, their wages are between 4,348 and 5,600 Rs, whereas the permanents get 10,000 to 19,000 Rs. The permanent workers are afraid. Every year a union election, internal faction fights, the seven union leaders don’t work, or only pretend to do so. Every month the permanent workers give 20 Rs union dues. The management does not agree to let the union install an office inside the company and gives the union 2,000 Rs per month instead. The incentive scheme is a lollipop.

Neolight Worker

(396 Udyog Vihar Phase 3, Gurgaon)
Around 500 workers manufacture light-systems for vehicles on two 12-hours shifts. The day-shift workers are made to work 16 hours every second day, they then receive 30 Rs extra for food. On Sundays we also work 12 hours. We work 150 to 200 hours over-time per month.

Track Auto Components Worker

(Plot 21, Sector 7, IMT Manesar)
Demand for production is very high, therefore safety devices are removed from the power-presses – both of old machines and newly installed machines. There are a lot of accidents because of that. Fingers are cut off.

V.G. Precision Components Worker

(Plot 327, Sector 24, Faridabad)
We manufacture parts for Maruti Suzuki. Even the company casual workers don’t get ESI or PF. Due to a lot of accidents the workers hired through contractors get ESI, but no PF. Out of 70 workers 55 workers get around 3,000 to 4,000 Rs per month. We work 12 hours shifts, but overtime is paid single rate. Even after seven, eight years of employment your are still a casual worker. Due to iron casting and finishing work there is a lot of pollution in the plant.

G.L. Auto Worker

(14-b, Industrial Area, Faridabad)
The 25 female workers get 2,700 to 3,000 Rs per month, the 500 to 600 male workers get 3,000 to 3,500 Rs. No ESI, no PF. There are few permanent workers, and six or seven of them have become company-internal contractors. There are three external contractor4s. We work two 12.5 hours shifts, sometimes they force us to work longer. Overtime is paid single rate, Sundays they pay double. Wage are paid late. There are only three toilets for the male workers.

Marshal Group Worker

(Plot 390, Sector 24, Faridabad)
There is not even one permanent worker employed. There are 11 CNC operators, 20 dispatch and packing workers and 120 helpers hired through contractor. We manufacture parts for Escorts, Honda, TVS and for export. The helpers get 3,200 to 3,500 Rs. The dispatch guys get 3,500 Rs and the operators get 4,000 to 4,500 Rs. A lot of pollution, and the bosses swear a lot.

Nova Pack / Hella Worker

(Northern Complex, Mathura Road, Faridabad)
The helpers get 3,500 Rs, the operators get 4,300 to 4,400 Rs. We work on two 12 hours shifts. On Sundays we work 9 hours. We work for Hella Light.

Lakhani Rubber Worker

(Plot 262, Sector 24, Faridabad)
We produce hose pipes etc. for Maruti Suzuki. It’s rubber work, it’s dirty. When the Maruti representatives come, workers are given gloves and masks. Maruti stops production after 24th of December for the annual revision. Therefore there is little production, but normally we work on two 12 hours shifts. Since two months the company hires workers through contractors. These workers get single rate overtime payment, while the older workers get one and a half.

Castmaster Worker

(Plot 46, Sector 6, Faridabad)
There are 500 workers hired through three different contractors, manufacturing metal parts for the automobile industry. Overtime is paid at single rate. If they force you to work longer than 12 hours they give only 20 Rs extra for food. Wages are 2,700 – 3,200 – 3,700 Rs. The contractors who pay 3,700 Rs also cut money for ESI and PF from wages. Wages get embezzled, one or two day-wages from the overtime money. Production targets are very high. They won’t grant you a 5 min tea break during the 12 hours shift. Drinking water is bad, toilets are dirty.