Contingency: Riding The Storm

C O N T I N G E N C Y
Riding The Storm

Maruti has found an innovative answer to its labour problem: get vendors to work the assembly lines.

By Suveen K. Sinha

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Last month, Heavy Industries and Public Enterprises Minister Manohar Joshi sent one of his bureaucrats to Maruti Udyog's plant in Gurgaon. The minister took the unusual step because he was not ready to believe what he had just heard: that the car maker's production had been steadily rising inspite of the unionised workers staying away from work. But the bureaucrat confirmed what the minister had found hard to believe. Maruti's average daily production in November stood at 1,319 units, against 1,205 in the pre-strike days of April-September.

Joshi's incredulity is understandable. The unions, which account for 4,444 employees from Maruti's total workforce of 5,730, went on strike in October 2000. Expectedly, the production slumped to an abysmal 299 on October 12. That was when CEO Jagdish Khattar-who once, as a Tea Board member stationed in UK in the early 1980s, personally carried tea samples around exhibitions-decided to implement some of his innovative ideas. Today, the result is there for all to see: a lot of unfamiliar faces working the lines at Maruti's Gurgaon plant. They are workers borrowed from some Maruti vendors. Thus, the air-conditioning station is manned by people from Subros, the fuel tank line by those from Remark Auto, and so on. ''They know their work. All they needed was a day's training,'' says Khattar, not trying to hide his glee.

Secondly, old apprentices-Maruti takes on 1,200 of those every year-have been called back. They are happy to return, since Maruti is paying them Rs 5,000 a month against an average of Rs 2,500 they earned in their previous jobs. As Khattar went about scavenging for workforce, employees from various departments, including engineering and even quality control, were put on the shop floor. And about a dozen-odd non-production people (including drivers) who are sent to Suzuki's facilities in Japan every year as part of a 120-strong contingent, were called upon to put their learning to use.

Even as the unions are threatening to disrupt the new arrangement-they were earlier dismissing the production figures as a mere clearing of inventory-Khattar is drawing kudos for his nifty solution. Former Daewoo Motors India Chairman S.G. Awasthi feels that Khattar's approach is reasonable and fair. ''The management should never submit to exploitation by unions. Secondly, these measures will build relations with vendors beyond the regular operations,'' says he.

Khattar is happy because, apart from the rise in absolute numbers, there has been a rise in productivity. For instance, the production was 1,432 units on the fifth of December, with only 4,035 workers working 1.4 shifts (11 hours) against the two shifts (16 hours) in pre-strike days. Besides, the average daily line-run without component, average daily hold-up, and the downtime for the plant (all measures of inefficiency) have gone down, while the quality index has gone up. ''They (the make-shift workforce) must be doing a good job,'' says Khattar. The arrangement may also result in some reduction in the company's wage costs (regular employees earn Rs 23,000 a month) if Khattar walks his talk: ''No way. No work, no pay.'' Clearly, it's an iron hand that now drives Maruti.

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