Lockout in Bangalore

Stable climate crucial for manufacturing growth

The lockout at four manufacturing units in and around Bangalore, including two plants of Toyota Kirloskar, has raised serious concerns about the industrial relations scene in Karnataka as well as the state's future as a centre of manufacturing activity. During the pre-1990s era when large government investments significantly contributed to industrial activity in India, Bangalore was considered the country's public sector enterprises capital. Then, in the post-liberalisation era when the share of public sector manufacturing declined - symbolised by the eclipse of Hindustan Machine Tools - and software development appeared as a rising sun, Bangalore came to be called the Silicon Plateau of India. However, growth industries such as textile processing, automotive components and automotive assembly partially restored Karnataka's place in the industrial landscape. The advent of first the auto assembly and then the engine and transmission plant of Toyota near Bangalore has been seen as a feather in the cap of the state, which has prided itself on being a good host for foreign direct investment in software services and manufacturing. If the industrial relations climate in the state is seriously undermined, it will bode ill for the country as a whole. Few industrial clusters can equal Bangalore in terms of the availability of technical skills and a professional work culture - if either of these assets were to be devalued, the future of all, including workers, would be adversely affected.

The Bangalore lockout, which also affects a textile processing and engineering unit, tells a familiar tale - it reminds one of the events that plagued the Maruti Suzuki factory in Manesar (Haryana) in 2012 and the Bajaj Auto plant in Chakan near Pune last year. Around Bangalore, protracted unsuccessful wage negotiations have degenerated into industrial violence, which has led to the lockout. In Manesar, the violence turned gruesome; in Chakan, the management's threat to shift production elsewhere ended the strike. Most of these firms pay their regular workers well, which makes their unions resourceful and aggressive. But there is a disturbing gap between the treatment of regular employees and that of contract workers. Eventually unions climb down, since in the age of globalisation, it is easy for a firm to threaten to shift production elsewhere. The threat becomes real when industrial slowdown and job losses in manufacturing clusters cause apprehension among workers.

If the country's goal of sharply raising the share of manufacturing in its gross domestic product from around 16 per cent at present to 25 per cent over the next decade is to be achieved, there should be a stable climate for business (industrial relations is a part of it) so that global companies feel confident about shifting manufacturing facilities to India. It is also important that the quality of jobs should improve over time - something that has not happened, while the distance between regular employees and contract workers has grown in the post-liberalisation era. The benefits of growth must reach multiple stakeholders, even as trade union leaders need to keep their ambitions and the temptation to engage in one-upmanship in check. State governments have a crucial role to play in ensuring the right atmosphere so that workers know their interests will be looked after and heed advice not to turn militant.