19 AUGUST 2013
A N A LYS I S
΄ΥΣΚΜΖΤ͑͑ ΄ΥΣΚΗΖ
Auto Monitor
11
Pradeb Biswas finds out some of the significant reasons that are aiding the causes of calling for strikes at auto companies. And what could be done to keep them few and far between.
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total of 49 days went by before the agitating workers at Bajaj Auto’s Chakan plant called off their strike. In a statement issued to the press, Rajiv Bajaj, Managing Director, Bajaj Auto, said “I am very pleased that the Vishwa Kalyan Kamgar Sanghatana (VKKS) union has unconditionally called off their strike at Chakan. I hope that their decision is a reflection of their understanding of the erroneous choice of direction.” While this may have sent out sighs of relief among the higher management of Bajaj Auto as it means that production could resume at the plant now, this assuagement might not last long. The VKKS union had told journalists that they will continue with their wage revision demands to the higher management. This suggests that an amicable agreement between the workers and the management of Bajaj Auto has been reached for the time being. But what remains unanswered is whether the underlying issue that pushed the workers to strike been resolved? For some years now, there has been a series of protests emerging in the automobile industry. The repercussions of this has been severe – both for the workers and the company. While production is most affected, there is also the fear that this is not a one-off event. Some protests have lasted for a month, while others continue to simmer underneath. Barely six months to a year pass before there’s a new workers agitation taking place. The worrying trend is that with each new worker protest sees an increase in its intensity and demands. This has had a cascading effect and several such protests or strikes are a common occurrence across the automobile companies. A common thread linking the workers’ agitation that have taken place in the auto industry be it at Maruti Suzuki or Hyundai or Hero MotoCorp or Mahindra and Mahindra, and lately Bajaj Auto were in the nature of the demands. All these strikes were the outcome of the lack of sensitivity on the part of the higher management to the workers’ demand for an increase in wages and increments. The long work hours coupled with high production targets create a high work pressure environment and rotational shifts contribute to frustration.
The Paisa Factor According to sources at Bajaj Auto, the workers at Chakan plant earn in the range of Rs 22-25,000 per month. They wanted this revised. In March 2013, shop floor workers at the Hero MotoCorp plant in Dharuhera, Haryana, demanded an increment of around Rs 18,000 per annum for the next three years. At that time the salary of an experienced worker was around Rs 50,000. Over three years, the increment would push their salary over Rs one lakh. In July 2012, the contract workers at Maruti Suzuki’s Manesar plant demanded better pay from the management. According to numerous reports, at that time the permanent workers earned a salary of around Rs 20,000, and contract workers around Rs 6,000. The demands made were for a salary hike (around four times their existing salary), gifts with every launch, cheaper home loans, and an increase in paid leaves. By the time the strike came to an end, the workers’ salary was increased by around 50 percent along with provision for interest free loans. The subsequent media reports about these wage hikes acted as a catalyst for workers in other automobile companies to achieve their dreams of a salary hike by means of a strike. Hyundai was the next company which suffered. The company increased salaries of around 2,000 workers at its Chennai plant by around 45 percent. This was followed by Honda Motorcycle & Scooter India (HMSI) increasing salaries by around 50 percent. Before
this hike, HMSI employees had a salary of around Rs 25-30,000. As per the settlement agreement, HMSI agreed to an annual Diwali bonus of around Rs 8,000 apart from a gift worth Rs 5,000 and a financial incentive of Rs 3,000 for meeting production targets. Additionally workers would be given Rs 1,000 for every new model launched and HMSI would pay 50 percent of interest for a 20 year home loan worth up to Rs 12 lakh. This wage pact was agreed upon by the workers’ union and the management
to be valid till July 31, 2015. Earlier strikes were a yearly occurrence at HMSI. But post the new wage agreement the company has seen a steady schedule in its production. Following this, the workers at Hero MotoCorp Workers Union (HMCWU) started questioning that if Maruti Suzuki has increased salaries of its workers and all other auto companies in the Manesar belt are following suit then why should HMCWU continue to work for low wages? The VKKS union at Bajaj Auto was the latest to join this bandwagon with the same ideas. Across the shop floors of all automobile companies, contract and permanent labour perform similar set of duties. The permanent workers are paid a salary that could be four times higher than those earned by contract workers. The contract workers’ contention would naturally question the disparity in the payment. What makes their condition worse is the lack of job security. One often hears from MNCs who
It is a big investment for auto companies to hire people, train them, and hope their performance matches internal quality standards. To avoid the risk, the management prefers contract workers. Not only will they put in the hours demanded, but will give their best.