CHENNAI/NEW DELHI: Labour unrest is on the rise at two centres in India where motorcycles and components are manufactured, underlining the problems Prime Minister Narendra Modi’s government faces in creating new manufacturing jobs that are sustainable and pay attractive wages.
Motorbike makers, such as Japan’s Yamaha, and India’s Eicher Motors – maker of the iconic Royal Enfield motorcycles – have been hit hard by walkouts, although major carmakers have been largely unscathed.
The workers are mainly demanding higher pay and job security, particularly by getting employers to reduce the use of contract labour, who are paid less than permanent employees and can often be fired at will.
Modi, who has to call elections by May next year, has promised to create new jobs by boosting manufacturing in Asia’s third-largest economy, but has failed to match aspirations despite rapid overall economic growth.
Those who have jobs feel left out of the growth story because of lagging wages.
Around the southern Indian city of Chennai, often dubbed the ‘Detroit of South Asia’, there have been a series of work stoppages at the motorcycle makers, mainly over union recognition, contract labour and wage issues.
Workers at several other companies in the area, including makers of auto parts and tyre manufacturers, have protested in recent months against lower wages, and for more secure jobs and the right to unionize.
In Gurugram, on the outskirts of the capital New Delhi, hundreds of workers from companies, including car maker Maruti Suzuki, staged a day-long protest on Oct 7 over demands for job security and higher wages.
The labour unrest “exposes the vulnerability of the workers,” said KR Shyam Sundar, professor of human resource management at XLRI, one of India’s top management schools.
Contract workers don’t have the same path to the middle class as employees – they are, for example, much less likely to get access to formal credit markets and their purchasing power will therefore be restricted, Sundar said.
Underlying the militancy is a mixture of pressures facing the workers and their employers, including rising living costs and sluggish sales. India’s domestic passenger vehicle sales fell 5.6 per cent in September from a year ago, data from the Society of Indian Automobile Manufacturers (SIAM) showed on Friday.
The sales were hurt by rising fuel prices and higher interest rates. A wave of labour stoppages could put additional pressure on the profitability of companies affected at a time when they are already grappling with increasing input costs and uncertain demand.
On a recent visit by a Reuters reporter to the industrial belt of Oragadam, more than 50 km southwest of Chennai, hundreds of workers wearing Yamaha uniforms sat metres away from the factory gates.
Besides them were placards with slogans like “Do you know kindness?” and “Let us put an end to oppression” written in English, Japanese and Tamil.
Apart from higher pay and permanent jobs, the workers also want the right to form unions to collectively bargain. — Reuters
Employees work on an assembly line of Hero Motocorp during a media tour to the newly opened plant in Neemrana, in the desert Indian state of Rajasthan. — Reuters photo