Indian factory experiences dangerous worker riots

Indian private security guards look at the burnt reception office at the main gate at the Maruti Suzuki Production Facility in Manesar, about 45 kms from New Delhi on July 19,2012.

Jeff Horwich: Employee riots at India's largest car-maker -- Maruti -- have burned down part of the factory, shut down the plant and killed a human resources manager.

World consumers and companies are increasingly connected with India, which is why we want to talk more about the riot with the BBC's Shilpa Kannan in New Dehli. Hello.

Shilpa Kannan: Hello.

Horwich: As best you know, what led to the riot?

Kannan: So far we have very few details. The company itself said that the riots began after a scuffle between a worker and a supervisor. It escalated when they tried to take disciplinary action against the employee as other workers protested. We were at the site yesterday, so we could see that all exit gates were blocked. And at some point there was a fire started.

Horwich: Were there particular working conditions or other grievances that were involved here?

Kannan: That's what we're coming to hear now. I mean, this particular plant has had labor issues in the past. Labor issues mainly revolve around the labor law itself in India; which -- many of the industries have been asking for a reformation of the labor laws. A lot of companies get around the antiquated labor laws by employing a lot of contract laborers on short-term contracts, so they don't have to pay as much for them, so the wages are less. So these laborers are upset about wage conditions, just the whole work conditions.

Horwich: We are hearing more of more of these isolated examples of nasty labor flare-ups in India. What are the possible implications for consumers and companies based in the West?

Kannan: That is the biggest concern, even for industrial bodies here. Because they have come out with statements saying they're worried about the impact it will have on foreign investment. Even this particular factory is a joint venture between Maruti -- which is an Indian company -- and Japan's Suzuki Motor, which has a 50 percent share in the whole car market itself, so it's a significant player. There is an implication on foreign investment: people looking at India might think twice about what kind of labor laws are there and can they really put up pants and run them without any problems?

Horwich: Shilpa Kannan with the BBC. Thanks for joining me.

Kannan: Thank you.

About the author

Jeff Horwich is the interim host of Marketplace Morning Report and a sometime-Marketplace reporter.

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