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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Background Note


Soichiro Honda, a mechanical engineer, established the 'Honda Technical Research Institute' in Hamamatsu, Japan, in 1946. His idea was to develop and later produce small two-cycle motorbike engines.

Honda's first product, an A-type 50cc bicycle engine, was produced in 1947. In 1948, HMCL was incorporated with a capital of 1 million. Thereafter, the company started to design and produce lightweight motorcycles. Honda's first motorcycle, the D-type two-stroke 98cc, was produced in 1949...

HMSI was established on August 20, 1999, and a plant was set up at Manesar to manufacture two-wheelers for the Indian market. HMCL made an initial investment of Rs. 3 billion to establish the plant which had an annual production capacity of 200,000...

Labor Unrest at HMSI

The Gurgaon plant of HMSI had peaceful labor relations for the first few years after it was set up in October 1999.

The management entered into labor contracts with individual laborers, which covered the basic wage structure and detailed parameters specifying the work conditions for workers. In December 2004, the workers at HMSI's Gurgaon plant started demanding that the management increase their wages commensurate with the company's growth in the market...

The Blame Game

The management and the workers traded allegations and counter allegations on what the root cause of the dispute was. They blamed each other for the situation that ultimately took an ugly turn on July 25, 2005. The management held the workers responsible for indiscipline and for slowing down production, while the workers insisted that there had been no indiscipline on their part and that the management was bringing up this issue only to prevent the formation of a trade union at HMSI...

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