Labor Unrest at Honda Motorcycle & Scooter India (Private) Limited


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Case Details:

Case Code : HROB104
Case Length : 15 Pages
Period : 2004-2005
Pub Date : 2008
Teaching Note : Available
Organization : Honda Motorcycle & Scooter India (Private) Ltd.
Industry : Automobile
Countries : India

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"The violence near the Honda plant at Gurgaon was instigated by outside forces who had misled the workers."1

- Spokesperson, Honda Motorcycle & Scooter India Pvt. Ltd., in 2005.

"The incident was a disadvantage for India's image as a foreign investment destination2 and also gave a negative image of Japanese management."3

- Yasukuni Enoki, Japanese Ambassador to India, in 2005.

"This incident has brought to light the need to look at labor laws afresh. We cannot have archaic labor laws in a liberalized economy."4

- Surinder Kapur, Chairman, Sona Group,5 in 2005.

Introduction

On July 25, 2005, the management of the Honda Motorcycle & Scooter India (Private) Limited, (HMSI), a wholly-owned subsidiary of Honda Motor Company Limited6 (HMCL), encountered violent protests from workers that disrupted production at their plant in Gurgaon7.

HMSI workers were severely beaten up by the police, and newspapers and TV channels gave wide coverage to the violence of the action. The protest followed six months of simmering labor unrest at the HMSI factory in which the workers also resorted to job slowdown8 (since December 2004 when the workers' demand for an increase in wages was rejected by the HMSI management).

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1] "Outsiders Instigated Labor Unrest: Honda Management," www.indiacar.net, July 27, 2005.

2] As of 2005, Japanese investment in India was around US$ 2 billion and there were around 250 Japanese companies operating in India.

3] Kushal Jeena, "Labor Unrest at Honda May Hurt India," www.news.monstersandcritics.com, July 26, 2005.

4] S. Kalyana Ramanathan, "India: Is Labor Trouble Resurfacing?" www.rediff.com, August 6, 2005.

5] Sona Group is an India-based automotive component manufacturer.

6] HMCL, headquartered in Tokyo, Japan, was the largest manufacturer of two-wheelers in the world. As of 2005, it had more than 120 manufacturing facilities in 30 countries worldwide and its comprehensive range of business had brought the company over 17 million customers annually.

7] Gurgaon is a satellite town near New Delhi, India.

8] Job slowdown refers to slowing down of operations by employees.

  

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