Riot forces Maruti Suzuki plant closure in India

Associated Press
A reception block of Maruti Suzuki factory is burnt down in Manesar, near New Delhi, India, Thursday, July 19, 2012. According to news reports, one person died and at least 40 people were injured in Wednesday's labor unrest at the Manesar facility of India's largest passenger car maker. (AP Photo/ Saurabh Das)
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MUMBAI, India (AP) — Top Indian carmaker Maruti Suzuki has shut one of its two factories in India after rioting sparked by a labor dispute killed one person and injured dozens of others.

Spokesman Puneep Dhawan said Thursday the plant stopped production Wednesday night because of fire damage caused by rioting workers.

"The plant is burnt in sections. You cannot make any cars," he said. No decision has been taken on whether to reopen the 550,000-vehicle-a-year plant in Manesar, in the north Indian state of Haryana.

A body found charred nearly beyond recognition in a conference room was identified Thursday as human resources manager Avnish Kumar Dev, Dhawan said.

The rioting also led at least 40 managers and executives to be hospitalized with injuries, according to a statement from the company, which is a subsidiary of Japan's Suzuki Motor Corp.

Labor unrest is a growing concern in India, as soaring inflation squeezes worker salaries even as mass media and conspicuous consumption stoke aspirations. The widespread use of contract workers by companies eager to side step India's strict labor laws adds to friction.

India's fast-growing auto industry, which has attracted many foreign investors, has been at the center of some of the highest-profile disputes. In 2008, a mob of workers at Graziano Trasmissioni India, part of the Swiss Oerlikon Group, killed the chief executive, crushing his skull with hammers and metal bars.

Honda, Ford, General Motors and Hyundai, among others, have also struggled with labor unrest in India, but nothing as persistent or violent as the agitation at Maruti Suzuki's Manesar plant.

Maruti Suzuki suffered three crippling strikes in 2011, which cost it market share and blocked production of tens of thousands of vehicles.

The Manesar plant makes Maruti Suzuki's most popular cars, the Swift and the DZire. Last year's strikes caused a production shortfall of about 60,000 vehicles, said Deepesh Rathore, chief auto analyst for IHS Global Insight in India.

"Even today there is a waiting list for the cars," he said. "With this strike it will only get worse."

"I think the root cause is that the Maruti working standards are quite tough," he said. "Maruti has a very distinctive Japanese style of working. The workers on the shop floor spend long hours without breaks and the job is monotonous."

He said Maruti pays "decent salaries," but they are eroded by the high cost of living in the area.

"From the worker's perspective, he doesn't have a good quality of life," he said. "There's high resentment among workers."

The Press Trust of India reported that police had arrested 88 Maruti Suzuki workers on charges including murder and damaging property.

According to Maruti, the unrest was sparked when a worker beat up a supervisor Wednesday morning. The company said the union prevented management from disciplining the worker, blocked exit gates and "held the executives hostage."

After talks broke down, workers "attacked members of the senior management, executives and managers," and ransacked the property, the company said.

The Maruti Suzuki Workers Union, in a statement distributed to Indian media, offered a different version of events, saying that a supervisor had "abused" and made "casteist comments" against a low-caste worker.

Instead of taking action against the supervisor, management suspended the worker, the union said. The union denied responsibility for the violence, saying that management had sent in hundreds of "bouncers" to attack the workers with "sharp weapons and arms" and set fire to part of the factory.

Maruti Suzuki said production at its Gurgaon plant, which can produce 900,000 vehicles a year, was unaffected.

Maruti Suzuki shares closed down 8.7 percent in Mumbai trade.

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