Hero MotoCorp’s Gurgaon plant workers in talks for wage hike

Workers in the Gurgaon-Manesar belt, largely engaged in automobile and ancillary manufacturing, have seen hefty wage hikes being given to their counterparts in Maruti Suzuki India, Honda Motorcycle & Scooter India and by some other large manufacturers recently. Emboldened, workers of Hero MotorCorp’s Gurgaon plant are now negotiating a wage settlement of about 40-45 percent for the next three years.

So far, the story seems all right. But workers have begun spreading misinformation and giving varying statements every day, which could actually hurt their own cause. They have been asking for a raise of Rs 15,000-18,000 over a three year period when the management is actually offering them something like Rs 6,500-7,000. Their current package is about Rs 40,000 per month.

Hero bike makers ask for salary hike.

Trouble lies not in these demands, which are a matter of negotiation with the company management, but in the way the workers are providing conflicting information to the media. If they continue to change their stand so often, they may not only lose media sympathy but also find it tough to get the money from the management.

A union leader representing workers told Firstpost today that though they are willing to settle for “slightly less”, the company has not budged from its initial offer. Earlier, the same workers were saying the company had raised its offer to Rs 9,000. Which version does one believe?
This leader also denied media reports that the workers had resorted to a slow down of production at the plant to press for their demands.
“We have not resorted to a slowdown. Why would we do that? Half our income is from incentives which form part of the salary and are linked to productivity. We will neither slow down production nor go on strike.”

The same worker leaders have been telling newspaper reporters earlier about a deliberate slowdown in production. A story in Financial Express quoted union leaders on 23 Januray saying production could be hit by 30 percent because negotiations are not progressing smoothly. A company spokesperson is quoted in the same story saying output has been marginally impacted.
A story on the same day in Business Standard said production at Hero’s third production line fell by about 45 percent. It quotes a worker saying vendors were not allowed to enter the shop floor during the morning shift.

But a look at the story in Times of India this morning makes it clear that the workers are resorting to cheap gimmicks to get what they want. It quotes unnamed sources in the Haryana labour department to say that workers have actually sought an increment of Rs 45,000 over a three year period. It also says the workers are additionally asking for Rs 10 lakh in interest free loans and for gifts on various occasions! This would mean workers are seeking a 100 percent increase! But the worker leader Firstpost spoke to termed this story malicious, saying he had no idea who was spreading such falsehoods and demands remain in the Rs 15,000-18,000 range.

Workers have been negotiating a raise since August last year but began protesting late early January by wearing black arm bands, refusing to even have tea inside the factory despite this year’s severe winter. But from these peaceful protests, things have come to a stage where they are saying anything at all to make themselves heard. A story in Business Standard this morning spoke of six worker leaders being issued show cause notices because they allegedly incited others to slow down production last month. The worker leader we spoke to said there were police chargesheets against these six leaders, something Hero denied.

A Hero spokesperson told Firstpost, “We have been holding talks with the union representatives in the presence of the labour department to find a sustainable, steady and sensible wage settlement. We will continue to engage with the workers towards achieving this objective of reaching an amicable solution, without allowing ourselves to be coerced into irrational decisions. The need for maintaining discipline for ensuring productivity and quality targets cannot be overemphasised.”

The spokesperson added, “Some of the organisations have tried to catch up with our wages by substantially raising wages which may not be sustainable in the long term but we will continue to be rational and provide steady and sustainable growth for our workmen.”

Last month, the same Guragon union leader who spoke to us today had explained that the actual salary difference between workers at two of Hero MotoCorp’s plants (at Gurgaon and Dharuhera) is already about Rs 10,000 and will get magnified if the workers agree to the management’s proposal.
“Workers at Dharuhera get doorstep bus facility, medical insurance etc. We, at Gurgaon, have to commute at our own expense, medical allowance is deducted from our wages and canteen food also has to be paid for though it is subsidised. When the management says we should be happy with the increment that they gave at Dharuhera, it is not taking into account the vast difference in the cost of living between that place and Gurgaon. Besides, we are drawing Rs 10,000 less than Dharuhera workers already,” he said.

But the most telling comment this union leader makes is about seeking parity with wage increments of other two wheeler factories around the area, most importantly parity with what workers at Honda Motorcycle & Scooter India (HMSI) have managed just last month. Harjeet Singh Grover, a leader in the HMSI employee union, had confirmed to Firstpost earlier that his union has successfully negotiated an increment of a little over Rs 16,000 in December last year, valid for three years. Not just a pleasing hike in salary, workers at HMSI are also now entitled to a home loan upto Rs 12 lakh where the company pays half the interest cost on any loan and Rs 25 lakh lumpsum payment if a worker dies.
Also, number of days of paid leave has gone up to 28 from 25 each year besides a facility of Rs 10,000 each year for children’s education.

But HMSI has a history of violent labour trouble, are the Hero workers going the HMSI way? Not just HMSI, even the recent violent unrest at Maruti Suzuki India’s Manesar plant has served as a benchmark for many labour unions which are now demanding much more in terms of money and facilities and placing their demands vociferously too. Maruti’s workers have been awarded almost 50% increase in wages at the Gurgaon plant recently.

Hero makes 7,000 two wheelers daily at each of the two Haryana plants (Dharuhera and Gurgaon) and another 9,000 units at its Haridwar facility where workers are yet to form a union. Union leaders in the belt point out that despite the legitimacy of demands of the Hero MotoCorp workers, it may be close to impossible for the management to accept these.
“The gap between the demands and the management’s offer is just too wide. I don’t think they will be met,” said one union leader.

The entire Gurgaon-Manesar belt has been witness to periodic labour trouble, the latest incident being violence and lockdown at Maruti Suzuki India’s Manesar facility last year. HMSI suffered one of the most violent protests over wage issues in 2005 and labour unrest again raised its head here in 2009. But since then, things have been quiet, partly because the increments have been to the workers’ liking.
Now, wage negotiations are due at several neighbouring factories: GKN Driveline, FCC RICO, RICO and Endurance over the next three months. How workers at Hero manage to negotiate their wages will probably determine the fate of workers at all these nearby facilities.