Maruti union threatens to cut production by 53%

The employees' union of Maruti Udyog Limited has threatened to cut down production by 53 per cent to base levels if the MUL management fails to implement the ''promised incentive scheme'' for achieving higher productivity levels.

Stating that revision of incentives has been due for around one-and-a-half years, the Maruti Udyog Employees Union alleged that the company management was resorting to pressure tactics in the form of suspension of union leaders instead of resolving the issue.

The union will also contemplate going on strike and bringing in outside unions if talks with the management head for a collision, MUEU general secretary Mathew Abraham said on Wednesday.

''Under the memorandum of understanding between MUL and Government of India in 1986, the government had agreed to share 65 per cent of the additional gain of productivity with the employees. Following several board resolutions, a scheme was later floated under which the base productivity level was set at 43 vehicles per direct employee. As against this, we had last year achieved production levels of 92 vehicles per employee. But if we cannot get the incentives of this extra production, we will have to go back to the levels of 43 vehicles per employee,'' Abraham said.

MUL managing director Jagdish Khattar was not immediately available for comments.

The company is already wading through troubled waters, being under attack from global players and its market share dipping to around 50 per cent. The company's bottomline will also be under pressure this fiscal with heavy depreciation on its investments and increased borrowings from the market.

Meanwhile, the union has been in talks with the management over the issue since march 1999, when the previous incentive scheme expired. In addition, the previous wage settlement also expired in March 2000. "But we want the incentive scheme to be settled first before the other issues are taken up.''

Abraham alleged that the pension scheme and promotion policy are not being implemented. Further, the scheme of rewarding jobs to employees' children is also not being implemented. ''We want these issues also to be settled.''

The management has refused to pass on the benefits citing increased competition and lower margins. "But we have helped the company save Rs 580 million directly by increasing productivity. As per the MoU, we should be getting 65 per cent of this saving, but the management is not prepared to distribute it.''

The management, he alleged, is using pressure tactics and has suspended MUEU president Dinesh Kumar and executive member J K Sharma on charges of misbehaviour.

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