FT.com / Emerging Markets - Indian workers demand greater rewards Maruti Suzuki, the Indian subsidiary of Japan's Suzuki, has been India's biggest carmaker for two-and-a-half decades. But this year, its position as India's market leader - and as a major driver of Suzuki's profits - has been undermined by labour unrest that has severely disrupted production and led to long waiting periods for Maruti's most popular models. Since June, workers at the company's five-year-old Manesar plant, in the northern state of Haryana, have gone on strike three times, initially to press for a new, independent union, and later against management's punitive moves against strike leaders. Tensions culminated this month, when 1,500 workers occupied the factory compound for eight days, halting production completely, until they were evicted by police. Maruti said on Friday that it had finally resolved its differences with the workers after days of intensive talks brokered by the state government, and that normal production would resume. But labour activists say it is likely to be a fragile peace. "How long this truce will last is going to depend on management," says Gautam Mody, secretary of the New Trade Union Initiative, which has closely followed the agitation. "They need to change their style in being able to accept a union of the workers" choice and not trying to dictate terms of how industrial relations will work." The unrest at Maruti reflects the increasingly combative mood among Indian industrial workers , who toil in highly-automated, ultra-modern factories - often owned by, or supplying to, foreign companies - but feel they are not getting an adequate share of India's rising prosperity. Prabhu Mohapatra, a Delhi University labour historian, says the agitation at Maruti had similar causes as the labour unrest that has rocked many foreign-owned factories in China in the past few years. "Auto component companies have made enormous profits, and workers have gotten peanuts," he said. How many months would it take a worker at the Manesar plant to buy a Maruti, compared to a German worker? The difference is 20 times. "You have to increase the purchasing power of workers to create a mass market, but here, you think "we will squeeze these workers so we can export,"" he added. Overall, labour unrest in India has declined sharply since the 1970s, when up to 40m days were lost a year in protracted national strikes led by fiery union leaders. National unions, mostly linked to political parties - have lost their clout, and there are now virtually no national, industry-specific unions. But India has seen a rising tide of factory-level industrial action at multinational companies. Companies such as mobile phone maker Nokia , engineering firm Bosch,Hyundai, Honda Motorcycles, auto components-maker Comstar, tyre-maker MRF, General Motors and Nestlé, the food group, have all suffered disruptions in recent years. As it did at Maruti, trouble has often begun with workers" efforts - encouraged by outside labour activists, or politicians - to organise new, more independent unions to represent them. Typically, these moves are fiercely resisted by companies long accustomed to dealing with compliant, management-influenced unions. At Maruti - where the official union had not held elections to its governing board for at least eight years before the trouble at Manesar erupted, executives were firm in their rejection of a demand for a new union, with three non-employees on the board even though labour groups" rights are protected under India's liberal constitution. "Management was clear we can't have non-employees," a company spokesman told the FT. A non-employee will never have the interests of the company at stake. Across India, labour unrest has also been fuelled by the widespread use of short-term contract workers, who are hired by labour agents - a practice many leading companies use to skirt stringent domestic labour laws that make it virtually impossible to lay off permanent workers if times turn hard. The recent unrest has cost Maruti dear. The three strikes - which together lasted 64 days - resulted in a loss of production of around 65,000 cars, with an estimated market value of around $400m. Its share of India's passenger car market fell to 40 per cent in September, down from 48 per cent in June when the trouble began. It still has a huge waiting list of nearly 100,000 people wanting its newest model. But Mr Mody warns other companies could be looking at similar woes, with the real prospect of rising labour agitation in the future, unless they radically change their hiring practices. "There is an enormous sense of exploitation and a strong anger," he says. The situation is increasingly intolerable.