We're ready for long haul, even if it means no output for 6 months: Rajiv Bajaj

Taking a tough stance amid an impending strike at Bajaj Auto's Chakan two-wheeler factory, Managing Director Rajiv Bajaj says he is ready for a long-haul face-off with workers, even if that means production coming to a halt for six months. The Chakan facility near Pune, which produces 70,000 to 80,000 vehicles a month, accounts for 25 per cent of the company's total two-wheeler output.

Bajaj tells Business Standard: "We are ready for the long haul... we will not show any leniency to the unions or give in to their ridiculous demands. If that means having no production at the factory for the next six months, so be it."

The automobile company is gearing up to fight another battle with the workers' unions, which had, only eight months ago, agitated for 50 days and affected two-wheeler production at the factory. "I am certain this is the end of the road for the 30-50 workers who are creating problems. As for the remaining 850 permanent workers, I am going to ask them to make a choice and come to work," Bajaj says, adding his company will be firm and not follow a policy of "sparing the rod and spoiling the child".

The company management, which has suspended five workers over the past few months, is considering taking action against a dozen more who are described as creating problems.

The Vishwa Kalyan Kamgar Sanghatana (VKKS), the union of Chakan plant workers, has given notice for striking work at the factory from April 28. It has made several demands - both old and new - before the management. These include 500 shares of the company for each worker at discounted price and sharing half of the two per cent of profit Bajaj spends on corporate social responsibility (CSR) with employees, apart from an equal representation on the CSR board and a museum and statute in the memory of Jamnalal Bajaj, the founder of the Bajaj group.

Rajiv Bajaj, however, says there is no question of accepting any of these demands. He repeats the company does not offer stock options even to its top executives. He says, unlike start-ups, Bajaj Auto is a highly profitable venture that "offers real money for real work". On sharing of CSR spending, he clarifies: "Under the law of the land, you cannot spend the CSR money on your own employees. That is illegal and so is the question of representation on the CSR board. The union does not even know the rules." Bajaj Auto, meanwhile, is executing a contingency plan to lower the impact of the strike on production. "After the fresh trouble began, we started producing 20,000 two-wheelers at our Aurangabad plant. We have some 300-400 trainees at the Chakan plant who could do some production. We could also shift part of the output to our Pantnagar unit," the managing director says.

BRAKES ON WORK?

BAJAJ AUTO UNION’S DEMANDS

• Workers should be given 500 shares of the company at Rs 1 apiece as stock options (as demanded during last year’s strike)
• Half of the 2% profit the company spends on CSR (corporate-social responsibility) should be given to workers
• Workers should have an equal representation on the CSR board
• A Jamnalal Bajaj museum should be built and his statue installed

THE MANAGEMENT’S CONTENTION

• Even top executives are not given stock options; Bajaj is not a start-up, it makes good profits and pays real money for real work
• Spending CSR money on own employees is against the law
• Building a statue is a frivolous demand
• The union, fearing loss of its power with the workers, has stymied a generous wage agreement proposal that envisages an increase of Rs 10,000 a month

LABOUR PAIN FOR OTHER AUTOMAKERS

• Toyota Kirlosakar (Mar 2014): Unions ask for more holidays, company housing and pay raise of up to Rs 4,000 a month (against the firm’s offer of Rs 3,050; unions willing to sign a code of good conduct but against individuals doing so
• General Motors India (Jan 2014): After the firm gives fresh appointment letters to only a few workers, contract workers sit on dharna, asking for parity in wages between them and regular employees

According to company executives, the bulk of the production of Bajaj Pulsar motorcycles, among the most popular of the company's two-wheeler models (65,000 to 70,000 a month at Chakan) could be shifted to the Aurangabad facility. The process for this has already begun. Apart from the Pulsar, the Chakan factory also produces some motorbikes under the KTM brand.

Rajiv Bajaj says the unions have stymied a generous wage agreement, under which workers were offered a pay increase of Rs 10,000 a month. "We are one of the best-paying companies in the region. While 99 per cent of our workers have no problem, the unions have refused to endorse it," he says.