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INTRODUCTIONIn 2009, labor unrest started in the Manesar

plant of Honda Motorcycle & Scooter India Ltd. (HMSI), the Indian subsidiary of the Japan-based Honda Motor Company. The workers allegedly resorted to a job slowdown and other tactics to push for higher wages and perks.

• Issues – Labor/industrial unrest– Labor/industrial dispute– Strike and job slowdown

HMSI

HMSI was established on August 20, 1999, and a plant was set up at Manesar to manufacture two-wheelers for the Indian market. HMCL made an initial investment of Rs. 3 billion to establish the plant which had an annual production capacity of 200,000.

About the factory

The factory is modern, only four years old. The plant churns out 2,000 scooters per day and employs about 1,900 to 2,500 workers.

In 2004 HMSI is said to have sold 550,000 scooters in India. Scooters and other two-wheelers are still the most important means of motorised transport in India. In 2003-04 about 5,625,000 motorcycles were sold, compared to 850,000 cars.

Most of the workers are hired by subcontractors or only get daily contracts. The wages are poor, securing mere survival.

A lot of workers come from the surrounding small villages or even from other states and they rely on the company’s bus service.

Labor Unrest at HMSI

The Gurgaon plant of HMSI had peaceful labor relations for the first few years after it was set up in October 1999.

The management entered into labor contracts with individual laborers, which covered the basic wage structure and detailed parameters specifying the work conditions for workers.

In December 2004, the workers at HMSI's

Gurgaon plant started demanding that the management increase their wages commensurate with the company's growth in the market.

Violation of Laws

Some analysts charged that the incident was fallout of the long-term oppression and malpractices at the Gurgaon factory by the HMSI management.

They alleged that HMSI's management had violated certain laws relating to the welfare of workers (Refer to Exhibit III for laws related to welfare of workers in India).

It was reported that a worker had allegedly been kicked by a Japanese manager on the shop floor in December 2004. The services of four other workers who had come to his rescue were allegedly terminated.

The Cause of the Conflict The conflict began in December 2004 after a manager

allegedly hit a worker, who was said to be engaged in organising a union within the plant.

Another four workers were sacked after they expressed their solidarity with their workmate. The official justification for the dismissals was "undisciplined behaviour in the factory”.

The whole situation came to boiling point when the management sacked another 57 workers and nearly all the workers in the factory reacted by going on strike in June 2005.

At the end of June 2005 the management replied by officially sacking 1,000 workers and locking out the strikers.

About the Strike

27th of June: Workers from the surrounding villages are not fetched by the company buses. The management wants to force them to sign a declaration saying that they renounce further demands and strikes.

10th of July: According to media reports, about 38 percent of the workers are still working, some of them are recently hired temps and redeployed office workers.

Contd.13th of July: The employers’ association of the

automotive supplying industries (ACMA) demands that the government takes steps against the strike at Honda, complaining about the negative impact on the situation in other plants in the region.

25th of July: Between 2,000 and 3,000 workers of the Honda plant demonstrate in Gurgaon, supported by family members and employees of other factories.

Contd.28th of July: A solidarity strike takes

place in Gurgaon, called for by left parties. The participation is low. An India-wide day of protest is announced for the 1st of August.

1st of August: Production is officially resumed, but only 800 to 900 scooters are produced per day. Arbitration proceedings take place, but no representative of the workers is admitted.

About the Results of the Strike In total the company lost about 1.2 Billion Rupees

due to the strike. The media presented the result of the strike as following:

All dismissed workers are re-hired, under the condition that they sign a so-called ‘good-conduct’ declaration promising to abstain from further demands and strikes.

The workers are granted a wage increase for the year, although we couldn’t find any info on the exact amount.

There is contradictory information on the question of whether the days of the strike will be paid or not.

Some sources say that all strike days in May and June will be paid, others say that they won’t.

The AITUC demands the release of all workers still in custody and union recognition in the company.

Could this Ugly Situation have been Averted?

Several factors can lead to a conflict between the workers and the management of any company, and as such, companies should be prepared to trace the root cause of the problem and solve it

Industry experts opined that with proper understanding of the industrial laws and causes of disputes, the management and the workers of any company could avoid incidents such as the one at HMSI

Conclusion-

Factory managements admitted production was disrupted. “Workers were boycotting work and had joined the procession, though the general office staff had reported for duty. The assembly lines were not working,” a senior Honda Motorcycle and Scooter India (HMSI) official said to agencies.

Hero Honda, the world’s largest two-wheeler manufacturer, also admitted that the strike has made some impact on production. “The recurring labour issue in the Gurgaon-Manesar belt is severely impacting the industrial environment in the state, and hence it is indeed a concern for all industry. The ongoing workers’ problem at some of the auto component suppliers’ plants has impacted our operations.”

In a statement, the company said production on the morning shift at its Gurgaon plant was impacted owing to a shortage of components

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