WHY DOES LABOUR STRIKE IN INDIA'S AUTO SECTOR?

By Ruma Dubey

What is it about the Gurgaon-Manesar-Bawal belt in Haryana which seems be like a festering pool for labour stikes/unrest. Declared as the “auto hub” of India two years ago by the Govt of India, it houses almost all the Who’s who of the auto sector - Maruti-Suzuki, Hero Motocorp and Suzuki Motorcycles and Scooters and scores of automotive ancillary units like Denso, Pricol, Ricco, Sona Steering, Minda, Omax, Jai Bharat Maruti.  75 kms away from Delhi, it accounts for 50% of the cars and 37% of the two-wheelers manufactured in India and over 20% of the total workforce in Haryana is employed in this belt alone.

This belt is followed by Tamil Nadu and some parts of Maharashtra and now Gujarat. But common to all is the labour trouble. All have faced some of the worst labor turbulences. Hyundai and Ashok Leyland in South India, General Motors, Bajaj, Mahindra, Ford and Hyundai in Western India; all have had their share of labor issues. But the worst has been the Gurgaon – Manesar belt with HMSI, Hero Honda, Rico Auto, Sunbeam Auto and Maruti which have been inundated with labor issues. There is an ongoing labor trouble at Hero Honda’s Gurgaon plant. Thus the question – more than the “belt” is it the auto sector per se which is inundated with constant and violent labor troubles? Yes, there are strikes in other companies too but it is more rampant in the auto sector.

So what is it about the auto sector which prompts such frequent and prolonged labor strikes? Many blame it on the practice of contractual or casual laborers, who are employed by companies to keep a tight leash on their costs. These casual workers are paid 20-30% lower than those on the company payroll, with no welfare or social benefits. The average salary for contract workers is Rs 15,000 a month in Hyundai v/s Rs 45,000 and Rs 47,000 a month paid to the permanent workers, At Maruti Suzuki it is about Rs.12,000/month v/s Rs 50,000 at its Gurgaon plant and Rs 39,800 at its Manesar plant. It is worse in Maharashtra and Goa where the temporary are paid between Rs.3000 to 10,000/month while permanent are paid anywhere around Rs.30,000 to 35,000.

Many trade unions blame it on the more taxing nature of jobs, where the working conditions in most of the auto manufacturing units are long and strenuous.  Wage differences between the causal and permanent workers, with management not granting the permanent status to the contractual laborers despite having worked for years tops the list of disgruntlement.  The management, apart from lower costs, feels it is ‘safer’ to have contractual workers as they can be fired at will which in the case of permanent workers gets sticky. And when these temporary workers get fired, they feel cheated and exploited and thus strike work. It is a vicious cycle and both the management and labor force seem to be caught in its vortex.  

There is also the issue of laborers not being aligned to the management’s objectives and philosophy. Majority of these companies are rated very high when it comes to corporate governance and HR policies. So then why the strikes? Mainly because the management fails to communicate to the labourers about the various initiatives and policies which they have implemented on the factory floors. This lack of communication builds a taller wall between the management and the workers.  

Is there a way out at all or should one allow the whirlpool to grow larger, sucking the entire auto sector into it and drowning it completely? Well, problems exist only because there are solutions and the management needs to correct itself. Maybe a first step would be to reduce the wage disparity between the temporary and permanent workers and provide better working conditions and some welfare benefits to the casual workers. For retaining the right to fire errant workers, if the management has to pay more, surely it is a smarter trade off than having to suffer loss of production and money due to such ongoing labor strikes. Maybe instead of talking to workers only when they strike, the management should have regular dialogues which in turn will give the workers a sense of respect and caring. Yes, like so many other things which need to be overhauled, we urgently need to overhaul the outdated labor laws but with nothing happening in the Govt, it is up to the people to bring about some change.

If one looks back, every act of violence or insult is a consequence of a hurt self-esteem or self-respect. So if the management can change its attitude and treat the workers with care and respect, maybe then such strikes might never happen. It sounds very simplistic but every complicated question of life always has the simplest of solution and most lie within us.