What is in this article?:
- Workers at Riot-hit Maruti Plant in India Win 75% Pay Hike
- Labor Tensions Hurt Sales
- Pay and allowances rise to 18,000 rupees
- In June workers killed a personnel manager
- Plant beset by labor strike for several years
India's top carmaker Maruti said Wednesday it has given workers at a plant where employees went on a deadly rampage a 75% pay hike as it seeks to mend labor relations.
Workers at the Manesar plant will see their monthly pay and allowances climb by about 18,000 rupees ($336) over three years, making them among the top-earning factory workers in the country.
The wage increase along with rises in transport and other allowances makes the deal work out to "an increase of 75%", said a spokesman for Maruti Suzuki, majority-owned by Japan's Suzuki Motor Corp. IW 1000/133)
A permanent worker's monthly pay packet now averages about 25,000 rupees, said the spokesman for Maruti, which is key to the fortunes of its Japanese parent, contributing close to a third of Suzuki's profit.
While wages had been increased, "labor costs will continue to make up 2.4% to 2.5% of total sales … it is in our business plan," said the spokesman, who spoke on condition of anonymity in line with company policy.
Wage Hike Follows Violence
The wage hike comes after workers in July chased supervisors at the plant with iron rods, killing a personnel manager and injuring close to 100 other managers.
The riot, unprecedented in the company's three-decade history, saw India's leading carmaker by sales lock out workers for a month at the plant and cost Maruti some $250 million in lost production.
Workers' representatives had said unhappiness over wages and working conditions led to the riot, along with use of lower-paid contract workers. Maruti has already said it is shifting to use of permanent workers.
The employees will also get other benefits such as interest-free loans and better health benefits, the Maruti spokesman told AFP.
"This seems to be a good settlement -- allowing Maruti to move forward and focus on production," Deepesh Rathore, IHS Automotive's India-based auto analyst, told AFP. Maruti's shares closed broadly unchanged at 1,314.25 rupees.
"This is not going to make much difference as a percentage of sales as the wage rise can easily be recovered by sales and/or price increases," he added.
The deal came after shareholders last month urged Maruti to improve labor relations at the plant, which has been beset by strife for several years, hitting profits.