Wednesday, September 20, 2006

The Power of Screams??!!

Gurgaon industrial belt, the very heart of the Indian manufacturing market has seen unrest and turmoil in the recent past and it has hit the news once again for the same. Exactly an year ago there was “much ado about everything” with employees of Toyota and Honda indulging in strikes for the obvious fiscal reasons. Well, now the sequel of the action has happened and there has been no change in the protagonists too, the Honda employees. To be more precise, the Honda casual employees

The national scooter market was in an all-time low five years back. However it saw its revival being scripted by the Japanese auto-major, that has the power of dreams before bearing the brunt of the Honda- labour strike staged last year. A 15 % dip in the overall scooter sales allover the country catches the picture perfectly. However the wages issue was then settled after a bitter row between the management and the labour union. Now the dispute has raised its ugly head again. The casual employees who claim for an increase in wages on par with that of the permanent employees have hit back at the management, only to meet it’s reluctance.

The concept of strike was very popular in the early nineties. However it lost its importance in due course and nowadays both the management and the labour union look at peaceful measures and co-operative solutions for their problems. There has been far less number of strikes in the recent years and hence the Honda-labour strike (2005) was considered as a melodrama. The economy of the country largely lies in the hands of the foreign investors and it would see a major set-back if more such strikes are staged against the multinationals. HMSI, which suffered loss of production in the past few months, saw its June sales drop 22.4 per cent to 25,530 units. According to an industry analyst, the growth revival seen in the scooter market over the past couple of years was largely driven by HMSI. For example, in the last fiscal while the scooter market grew by 4.2 per cent to 923,566 units, HMSI and TVS Motor were the only two companies to see a positive growth, with the remaining five scooter-manufacturing firms seeing a decline in growth in the year

The Honda employees declared a strike against the management and refused to indulge in productive activities on Tuesday 19/9/2006 after the contractors refused to improve their pay scale.There has been a dichotomy however, over the proliferation issue with the management claiming that the production has not been affected and the employees saying that more 50% of the production has been stopped due to the strike. The management goes on to say that the strike is a matter of concern between the contractors and the casual employees and it has got no part to play in the ongoing strike.

Strikes like these can have profound impact on
1) The companies’ revenue and more importantly their public image
2) The welfare of the employees
3) To a certain extent, the country’s image in the world market

It doesn’t require rocket science to describe the impact of strikes in a company’s turnout. It certainly is bound to have adverse effects. The more serious problem is the negative impact that it develops on the mindset of the people. In a country like India, where the market is bound to emotional and sentimental issues, if a company is entertaining many strikes, then it is a villain affecting the welfare of its employees. Two strikes in a span of thirteen months is certainly “many”

Most of the employees who work in multinationals, as ad-hocs would earn a maximum of Rs 7000 per month and strikes certainly would cause a regress in their economic status. The conditions might improve if the strike turns successful but that is a big if.

Indian economy has been beefed-up largely by the FDI and FII of the foreign investors. If the country shows a record of two-strikes-in-thirteen-months to its investors, how encouraged they would feel!! So the country too has a part to play in curbing strikes and help in maintaining equanimity in the companies.

In short, strikes don’t augur well for developing economies like India and they should be played down at all cost. With scrupulous planning it can be achieved. The investing companies too should realize that the welfare of the employees should be their prima-facie and an optimist would only expect the other companies to learn from the unfortunate yet inevitable, ongoing dispute between the HMSI management and its casual employees.

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