Automakers grapple with reality of labour

Toyota’s ongoing dispute with its workers reflects an issue that has been simmering in the Indian automotive industry for years now.

Last July, Bajaj Auto saw operations at its Chakan plant near Pune severely hit for nearly two months. Things had gotten uglier at the Maruti facility exactly a year earlier when Awanish Kumar Dev, an HR official, was burnt to death by workers as all hell broke loose.

The Gurgaon-Manesar belt in Haryana has, in fact, been witness to lockouts and worker demonstrations in the plants of Honda Motorcycle & Scooter India and ancillary supplier, Rico Auto. Yet, this may not be a region-specific issue. In September 2009, Roy George, the HR chief of Pricol was brutally killed by workers during a labour strike at the Coimbatore plant in Tamil Nadu. And, apart from Toyota, Bangalore has had its share of issues with workers at Bosch also stopping work in the past.

“This is a real problem for the manufacturing sector that just cannot be wished away,” a senior executive of an automobile company says. In most cases, the issue boils down to the deep income divide between casual and permanent workers along with the reality that jobs are not permanent either.

As a Gurgaon-based executive of a component maker says, it becomes difficult for someone on contract to stomach these differences day in and day out. “Take the case of a worker who boards a packed bus from Faridabad and travels in absolute discomfort for over an hour to Gurgaon. He notices that permanent workers get the company bus as well as perks like a corporate uniform and access to the canteen,” the executive explains.

All these are grim reminders of a class divide that exists within the organisation concerned. Add the profound income disparity to his plate of woes and the contract worker is near explosion point. It is with this raging mindset that he exits the plant each evening to make his way to the local bus stop.

“During this time, he gets to see the plush lifestyle in Gurgaon with people in swanky cars heading out to fancy malls. He is ready to burst by the time he gets back home from another grimy ride in the bus,” he adds.

In another incident in September 2008, Lalit Kishore Chaudhary, the CEO of Italian component supplier, Graziano Trasmissioni, faced a gory end in the violence that broke out in the Greater Noida plant.

Was it to prevent something like this from happening that pre-empted Toyota to declare a lockout at its Bangalore facilities? The workers are demanding that the gates be thrown open again while still seeking higher wages. Even while the state government has been asked to intervene in the matter, this is an issue that will require careful handling.

A senior official of a truck company, who does not wish to be named, believes that India will see more and more cases of labour strife in the coming years. “Look, inflation is beginning to hurt households and people are just not being able to make ends meet. Then you have an industry like automotive which is engulfed in a slowdown which means layoffs and salary cuts are real possibilities. This will only lead to complete anarchy,” he cautions.

And it is not as if the arena is only about tyrannical managements and an exploited workforce. Logic can go completely haywire in an agitation as was the case in the Bajaj Auto strike where one of the demands pertained to the issue of shares at Re 1 each to workers. There was no way this was going to happen and operations at the Chakan plant were back to normal.

“Face-offs between the management and workers will happen from time to time. This is not as worrying as coping with sudden outbursts of violence which can cause deaths,” the official says. When incidents like this occur, it takes a long time for the wounds to heal and organisations just need to be far more sensitive to the new ecosystem post-violence.

Labour issues can also have far more serious consequences as was evident in the case of Peugeot’s first outing in India way back in the mid-1990s. The Kalyan plant near Mumbai was locked for nearly two months and even after it was lifted, there were a series of problems that plagued the French automaker.

Just when it seemed that it was ready to start a new innings in end-1997, the management in Paris decided enough was enough and shut down the Indian operations. The huge losses were cited as the issue but the spectre of the lockout was perhaps not ignored either. Ironically, it was these workers who continued to assemble cars in a last ditch attempt to keep operations going even after the formal closure but by then it was too late.

Peugeot’s Indian ally, Premier, also had its share of troubles with workers at its Mumbai plant which affected operations of the assembly line that was putting together the Fiat Uno in the late-1990s. Eventually, Fiat took charge of the facility but could not do much to put the house in order again.

And it is not as if labour is a India-specific issue. Hundreds of workers at Peugeot’s Aulnay plant near Paris protested early last year when the company was compelled to shut down operations following huge losses. Some months earlier, similar demonstrations were seen in Italy when Fiat announced that it would have to trim its workforce.

Increasingly, automotive companies across the world will have to handle the issue of labour with great sensitivity at a time when job losses are mounting by the day. These are not the easiest of times but the key is to strike the right balance between profits and worker sensitivity. It is by no means an easy task.

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