Specialist in Indian Banking and Economic Research

Hemindra Hazari

Is a Securities & Exchange Board of India (SEBI) registered research analyst with over 25 years experience in the Indian capital markets with a specialization in banking and economy research and has managerial experience of establishing profitable equities business, leading and mentoring analysts.  He has worked with prominent foreign and domestic capital market firms such as UBS, Societe Generale, HSBC, ASK Raymond James  and Karvy Stock  Broking and is a regular guest on business media channels and is respected for his non-consensus view on stocks and the market.

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The Gurgaon Sessions Court on March 10, 2017 delivered its verdict in the Maruti Suzuki rioting and arson case of July 22, 2012 at the company’s Manesar (Haryana state) factory which claimed the life of its human resources general manager, Awanish Kumar Dev and caused widespread destruction at the facility.  The police arrested 148 company workers and the company sacked around 500 of its 1,500 permanent staff at the factory.  The court verdict acquitted 117 workers (most of whom had already spent over 3 years in jail) and convicted 31 workers; 13 workers were sentenced to life imprisonment, 4 were given 5 years imprisonment and the remaining 14 were let off with what they had already served.  For Maruti Suzuki, India’s largest automobile company (market share of 46.8% in FY2016), the court verdict may not be the end of the labour issue as the labour union will appeal to the Punjab and Haryana High Court. Furthermore, the Sessions Court verdict will also not resolve the critical labour issues in the automobile industry; the fall in real wages over a lengthy period of time and the high disparity in pay (can be more than double) between two category of staff who do the same work on the shop floor: permanent and contractual (temporary) workers. In reverting back to its emphasis on low-cost contractual labour, the company is taking a calculated risk that with the support of the state it can control its work force and focus exclusively on dominating the market and higher profits. But, labour discontent is simmering in the automobile industry and with the deliberate suppression of trade unions independent of management, the institutional mechanism to resolve disputes has been considerably weakened resulting in explosive violence replacing dialogue which may disrupt the upward linear trajectory of analysts' earnings forecasts.

The Gurgaon Sessions Court on March 10, 2017 delivered its verdict in the Maruti Suzuki rioting and arson case of July 22, 2012 at the company’s Manesar (Haryana state) factory which claimed the life of its human resources general manager, Awanish Kumar Dev and caused widespread destruction at the facility.  The police arrested 148 company workers and the company sacked around 500 of its 1,500 permanent staff at the factory.  The court verdict acquitted 117 workers (most of whom had already spent over 3 years in jail) and convicted 31 workers; 13 workers were sentenced to life imprisonment, 4 were given 5 years imprisonment and the remaining 14 were let off with what they had already served.  For Maruti Suzuki, India’s largest automobile company (market share of 46.8% in FY2016), the court verdict may not be the end of the labour issue as the labour union will appeal to the Punjab and Haryana High Court. Furthermore, the Sessions Court verdict will also not resolve the critical labour issues in the automobile industry; the fall in real wages over a lengthy period of time and the high disparity in pay (can be more than double) between two category of staff who do the same work on the shop floor: permanent and contractual (temporary) workers. In reverting back to its emphasis on low-cost contractual labour, the company is taking a calculated risk that with the support of the state it can control its work force and focus exclusively on dominating the market and higher profits. But, labour discontent is simmering in the automobile industry and with the deliberate suppression of trade unions independent of management, the institutional mechanism to resolve disputes has been considerably weakened resulting in explosive violence replacing dialogue which may disrupt the upward linear trajectory of analysts' earnings forecasts.

Maruti Suzuki - Driving Labour to Breaking Point

Maruti Suzuki India

Maruti Suzuki - Driving Labour to Breaking Point