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Suppliers to three major OEMs - Maruti, Hero MotoCorp and Honda account for bulk of 1,369 injured workers

Are the three auto majors doing enough to streamline their supply chain? Is there scope for them to do more? Views are divided and the jury is still out

Sumant Banerji        Last Updated: August 11, 2019  | 19:38 IST
Suppliers to three major OEMs - Maruti, Hero MotoCorp and Honda account for bulk of 1,369 injured workers
Of the 1,369 workers that have been chronicled by an NGO SafetyinIndia, 963 were in factories supplying to Maruti, 646 to Hero MotoCorp and 723 to HMSI.

While the supply chain industry in the big automotive belt of Gurugram-Manesar has been found to have an abysmal record on safety, almost 1400 cases of serious injuries reported in four years, an overwhelming number of these workers were from factories that supply to three main OEMs-Maruti, Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI).

Of the 1,369 workers that have been chronicled by an NGO SafetyinIndia, 963 were in factories supplying to Maruti, 646 to Hero MotoCorp and 723 to HMSI. This does not really come as a surprise. The three are the predominant automobile companies functional in the region. There are two others-Harley Davidson and Suzuki Motorcycle, but they have significantly lower scale than the big three. The bigger question though, is whether the stink of bad safety standards for workers in the supply chain industry should extend to these auto majors as well?

"There is no one better placed than auto-sector brands to drive actions to prevent such accidents. It's them that we ask to take a lead in this initiative, individually and collectively. This is not only a humanitarian cause but also a strategic business issue for them," says Sandeep Sachdeva, founder CEO, Safe In India Foundation.

"In the last six months, we have had several discussions with all of them and the relevant government departments. Special mention must be made of Maruti Suzuki, who have been the most proactive in agreeing next steps with us. This is, however, just a start and all stakeholders need to do much more," he adds.

When contacted Maruti Suzuki and Hero MotoCorp agreed there was a problem in the supply chain and said they have take various steps to address the issue. For example, Maruti has set up DOJO centres at the factory premises of its various suppliers to upgrade skills and training of their workers. Honda Motorcycle and Scooters India did not respond to the questions sent to them and refused to participate in this story.

"We focus on promoting a culture of safety, employee well being and workplace ergonomics across the value chain. We are through several forums institutionalising 'zero accident' philosophy across the value chain. Presently more than 80% of our tier-1 supplier plants have OHSAS certification (international standard for health and safety management)," Maruti's spokesperson said.

"DOJO training centres located at the supplier's factory premises are part of the company's way of skilling and training suppliers' workmen. The workmen are required to mandatorily go through off-line training programs in the DOJO centre and they are introduced to the shop floor only after acquiring the required skills at this center. Safety is an important part of training at DOJO centres. Along with our partners we have set up 180 DOJO centres and plan to set up 400 by 2020," he added.

At an institutional level, the Automotive Component Manufacturers Association (ACMA), is also doing its bit with its cluster training programme where 10-15 per cent of the content is focused on safety related training.

"There is no denying there is an issue in the tier II and III suppliers that are very small in size and largely unorganized. All our members are tier I suppliers and there is no major issue with safety of the workers with this crop. It was brought into our knowledge about two-three years ago and since then we have undertaken safety training through our cluster programs," said Vinnie Mehta, director general, ACMA.

"We would have already conducted these programmes in at least 250-280 factories around the country and I can vouch for the safety record in all these factories. Still, it is just a drop in the ocean and a lot more needs to be done," he added.

Fixing the problem may not be as cumbersome as it may appear. Only a handful of factories err on a regular basis. Of the nearly 300 factories that SII has covered, 48 per cent of the accidents are accounted for by 16 per cent (47) factories. Sachdeva says if only 32 factories that have been identified as the most culpable are improved, over 300 workers can be saved from permanent disability.

To be sure, this is a peculiar problem for companies like Maruti, Hero or Honda as they have direct relations with the bigger tier I suppliers but very minimal contact with those at tier II and III levels.

"There are hundreds of such companies and they are all scattered in the region. If somebody expects to go into each of these factories and conduct audit or training programmes, you are asking for too much," said a senior HR executive from an auto firm in Manesar.

"There is a problem but some people tend to blow it up a bit. The scale of manufacturing each automobile is such that micromanaging the entire supply chain by the company is nearly impossible, he further said.

Is it fair then to expect the three companies to take a lead in this? Sachdeva thinks they should and cites the example of global textile and apparel brands to back it up.

"The end consumer only recognises the brand. He only sees a Maruti or a Honda in the logo on the car or a two wheeler and not the hundreds of companies that supply parts to it," he says. "Similarly he only sees a Nike, Adidas or a GAP on the shoe or t-shirt. When the Rana Plaza incident happened in Bangladesh, it was GAP that bore the brunt of the backlash. And later it was these big brands that got down to setting things right in the supply chain. That is the way it happens and should happen here. If the safety record of the supply chain remains lax, it is the brand image of these companies that will take a hit," Sachdeva articulates.

In April 2013, an eight storey Rana Plaza building in the capital Dhaka district collapsed killing more than 1100 garment workers and injuring another 2500. The incident brought to the fore vulnerabilities in the supply chain of labour intensive industries in developing countries and the need for better infrastructure and proper training of the workers.

"There has to be a top-down approach," agrees Mehta of ACMA. "These smaller factories will only start realising the real importance of safety once the bigger companies to whom they supply, start asking them questions about how many workers were injured and then take a stand that they would not do business with them if it is unsatisfactory," he states. 

Also read: Slowdown Blues: Maruti Suzuki cuts production by 18% in May

Also read: India's electric vehicle goals being realised on scooters, not cars

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