Maruti Suzuki intends to recruit about 2,000 more workers, mainly for the upcoming third line at its Manesar facility in Haryana. Called Plant C, the new line is supposed to commence operations sometime around September 2013. It will boost total output of the plant to 750,000 units a year, from the current capacity of around 500,000.
Maruti chairman RC Bhargava told the Financial Express, “Typically, one line requires 2,000 workers. The only difference between the two categories is that when work reduces, temporary workers go home, returning when it picks up again.”
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As per company policy, 75-80% of the new workers will be permanent, and the remaining will join on a temporary basis, according to Bhargava. He added that Maruti Suzuki could begin further hiring for the upcoming facility in Gujarat from around 2014. The Gujarat workers will first be trained at Maruti’s twin facilities in Gurgaon and Manesar.
By March, the automaker intends to completely do away with contract positions in operations that are directly related to manufacturing, but may keep them for other responsibilities such as material handling and maintenance.
Bhargava said, “At Manesar we don’t need them (contract workers) at all and at Gurgaon the process is on of converting the contract to temporary workers. By the end of March we should be completing this.”
Maruti’s current wage bill is among the lowest in the industry, standing at 2.2% of net sales at the end of the third quarter. However, the bill is likely to increase by more than INR1bn (US$18.77m), considering the 50% wage hike announced in September 2012 and the conversion of more than 5,000 contract workers to higher paying permanent jobs.
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By GlobalDataCompany officials including CFO Ajay Seth say financials will be affected minimally, but employee expenses as a percentage of net sales are likely to exceed 3%.
