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February 3, 1998


Maruti employees flays Suzuki statement

Maruti Udyog Limited employees have rallied out in support of Managing Director R S S L N Bhaskarudu and criticised Suzuki Motor Corporation president Osama Suzuki's recent statement that the discord between the two partners would lead to bankruptcy of the joint venture, as ''unwanted'' and ''damaging for the company's interest.''

They also hailed the company board's decision last week to approve the wage revision proposal.

Regarding Suzuki's statement, Maruti Udyog Employees Union General Secretary Mathew Abraham said last Sunday, ''This immature statement is aimed at creating panic and they have, in fact, succeeded in that. As a common reaction, there is some panic among the employees and this is damaging to the company. We can't understand why Suzuki is issuing such statements.''

He further stated that such statements are part of SMC's attempt to control the Rs 80 billion joint venture company, which presently controls 80 per cent of the passenger car market in the country.

However, Maruti's monopolistic position has been challenged by new entrants Hyundai, Daewoo and above all, the Tata small car. The companies plan to roll out their respective small car models by the end of the year.

Suzuki's statement, he said, has come when both the employees and the management of MUL were gearing up to take the competition head-on.

''In the face of such intense competition, the partners should be joining hands and devising ways to meet this challenge, but this seems to be of the least interest for Suzuki, who is more interested in the war of words,'' Abraham said.

Such strong and irresponsible statement will also affect the company's service and sales, as people would shy away from the company's products.

Maruti dealers had also recently flayed Suzuki's statement and termed it as ''irresponsible'' and ''immature.'' The dealers had further said that it revealed the desperation in Suzuki and showed that the Japanese were trying to weaken the roots and were not interested in developing business.

Suzuki had recently said that the controversy over the appointment of Bhaskarudu as MUL managing director and the consequent court case had made it impossible to hold talks with the Indian side on the introduction of new models by the year 2000.

He had further added that if new models were not introduced in time, it would mean a 50 per cent drop in Maruti's business, ''which does not bode well for the workers, vendors and dealers of Maruti.''

This statement, in fact, came on the heels of SMC nominee in Maruti K Senga's announcement that Suzuki was ready to respond to the needs of the joint venture as the market was undergoing rapid changes.

Supporting Bhaskarudu's appointment as managing director, Abraham said, ''He was the seniormost director in the company and had been associated with MUL throughout. It was under him that company's first expansion programme was implemented. He is totally capable and is the right candidate for the post.''

SMC, he alleged, has not been supporting him as they feel that Bhaskarudu would not let the Japanese take over the company, which has been their effort for quite some time.

"The Japanese want someone who can make their designs come true to hold the reins of MUL and all this criticism about the managing director has resulted from this,'' he said, adding that the employees fully support Bhaskarudu.

A rift had emerged between the Indian government and SMC, equal partners in MUL, on the appointment of Bhaskarudu. The Japanese partner had gone to the extent of challenging the appointment in the Delhi high court and the International court of Arbitration.

Regarding the new wages structure, he said, with this approval, the employees would get almost 35 to 50 per cent increase on their monthly wage. MUL's senior management had recently concluded talks with the company's trade union and arrived at a consensus regarding wage levels. The agreement, which was finalised earlier, has now been approved.

The Maruti controversy


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