Hardlook: Bumps on Nano speedway in Gujarat

Patel’s and Rajput’s suspension triggered the suspension of 26 more employees on February 22 after they came out in support for the reinstatement of the two.

Written by Lakshmi Ajay , Avinash Nair | Ahmedabad | Published:March 21, 2016 9:36 am
nanomn Some Labour Department officials concede that salaries paid to the workers at Sanand were “low as per the standards of Tata Group”, but the company claims otherwise — pay rise on a par with industry norms in October last year. Express

Around seven years ago, Chetak Patel was picked by Tata Motors from an Industrial Training Institute (ITI) at Visnagar in Mehsana for its Nano car manufacturing plant that had been force-moved to Sanand near Ahmedabad from Singur in West Bengal after a violent farmers’ agitation. Today Patel, suspended for misconduct, is fighting his employer.

“When I had joined the company with around 50 others, I considered this my first and the last job as I decided to dedicate my life for Tata Motors. My father is a farmer who owns just two bighas at Sander village in Patan. I had thought that my job will help me lead a better life. Though my dream has gone bust, I still want to work with Tata Motors, “ said Patel, who was among the first two workers — the other being Kalpesh Rajput — to be suspended in December last year from the Nano plant for alleged dereliction of duty and misconduct.

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Patel, who joined the plant before the commercial production of Nano started, worked in the powertrain division of the company where he was responsible for “engine quality” in the production area. Unable to afford higher room rentals at Sanand with his salary cut down to half, he recently moved to neighbouring Kadi town in Mehsana district with his wife.

Patel’s and Rajput’s suspension triggered the suspension of 26 more employees on February 22 after they came out in support for the reinstatement of the two. The matter snowballed into a flash-strike of 422 workers.

The full-blown 4-week-old agitation now threatens to dent the “industry-friendly” image of Gujarat. Tata Motors has maintained that the employees had engaged in “serious misconduct”, tampered with the vehicles being produced at the plant and their “continued agitations for further monetary increases” were “unreasonable” and “coercive”.

Labour unrest

According to the workers, the suspensions were triggered by their attempts to form a union, but Tata Motors claimed that it had first initiated efforts to form an “internal union”.

The labour commissioner’s office has found the position of both the sides reasonable. It intervened to declare the strike illegal, only to maintain Gujarat’s reputation that it does not believe in losing man days.

The major grouse of the workers, many of whom are in their 20s, is the low wages. Harpalsinh Jhala, 25, speaking for the suspended workers, said, “Despite working here for 6 years, my salary is Rs 12,500 and we get a meagre annual hike of Rs 700-800. We are repeatedly told that the company is making losses, even as its white-collared employees are getting better hikes. Many of us are ITI trained from nearby districts. We are on our first job — rose from probation to temporary to become permanent workers.”

Deputy labour commissioner, Ahmedabad region, VV Pandya said, “Gujarat is known for the least loss of man days. The state government could not have let the workers continue with their strike. It would have resulted in more man days lost. So, on March 2 we prohibited the strike under Section 10 (3) of the Industrial Disputes Act, 1947, and the same was communicated to the concerned stakeholders the next day. The count for man days lost has also been stopped once the strike was prohibited.”

Labour peace has been volatile in the last six years in Gujarat. In 2010, there were 13 strikes and lockouts. The number increased to 19 in 2010, 23 in 2011 and 33 in 2012. However, the state government’s 2015-16 Socio-Economic Survey showed 23 man days lost in 2014, and only nine in 2015.

“Though the state government does not participate in the internal inquiries of industrial units, we had intervened and held three-four meetings between the workers and the management of Tata Motors. The arguments from both, the workers and the management, appeared justified. The company was ready to take back all workers, except the 28 who were suspended and were facing inquiry,” said Pandya. The matter has now been referred to the Industrial Disputes Tribunal to decide if the suspended workers be taken back and if full salaries be paid during the strike period.

Labour Department officials, however, conceded in private that the salaries paid to the workers were “low as per the standards of Tata Group”. However, they were not able to justify or compare the salaries paid at Sanand to other locations. Following the Labour Department’s decision to declare the strike illegal, the Tata Motors’ management could take further action against the agitating employees.

Dissatisfied workers

The Tata Motors plant currently has a worker strength of around 2,200, of which 500 are permanent workers — many of whom have joined the strike. Tata Nano workers who work in five departments were also involved in producing Tata’s upcoming hatchback Tiago — of which 1,800 units had reportedly been rolled out from the Sanand passenger vehicles facility this February.

In an open letter on March 12, workers outlined their dissatisfaction and said, “Despite being given so many freebies, Tata Nano was not under a mandate by the Gujarat government of hiring 85 % local employees. With the Gujarat government doing so much for the Tatas, today is anyone asking what is the plight of the people working there? We who work in the Tata Nano are coming from farming families of Gujarat ! In the last 5 years and more than that we are working in this company. In this age of inflation, our total wages is not more than Rs 11,700 (including Basic 3370, Allowances 8330). The rent for a one room kitchen costs is Rs 5000 in Sanand, now you how shall we live? How will we send our children to school and what shall we send to our parents in the village”. The letter claimed that the day they initiated the process of registering a union, two workers were suspended.

So, what is this issue of “serious misconduct” that the employees are being probed for? Chetak Patel, for instance, got a “chargesheet” on December 17, 2015, for being absent from his place of work between 1.30 pm and 2.45 pm on December 16. It mentions that he was found “chatting” with other employees in another part of the plant and when questioned by the supervisor, the worker tried to assault his superior. “The inquiry that the company conducted was a one-sided. Officials of the Labour Department, a labour lawyer from the company, two HR officials all got together and questioned me. There was nobody to assist me,” claimed Patel.

“The company has slapped false charges on us and are trying to implicate us. They never wanted to us come together and form the union. The formation of a union was necessitated because the company had repeatedly refused to pay heed to the demands of workers for a pay hike,” said Kalpesh Rajput.

Responding to a questionnaire sent to the company, an unnamed spokesperson stated, “This is a first attempt to form a Union after the management invited workmen to organize and form an internal union.” Since February 22, when the strike began, the company has so far issued at least 14 statements to the media by anonymous spokespersons.

The spokesperson also pointed out, “Tata Motors Sanand plant engages around 2,500 people, including workers, supervisors and managers, with almost all of the blue collar personnel being of Gujarat domicile. Subsequent to our annual appraisal cycle, there was a special intervention for wage revision in Oct 2015, where a pay rise was given on a par with industry norms in the region, besides accepting the workers perspective to bring them into the Tata Motors’ Medical benefit under Employee state insurance”.

“The company also remains committed to expedited inquiries and that of the two suspended employees is awaiting their response,” stated the company.

So, what went wrong for Tata Nano that was rolled out the red carpet into Gujarat by then chief minister Narendra Modi to cock a snook at his West Bengal counterpart Mamata Banerjee? In October 2008, a State Support Agreement (SSA) was signed between Tata Motors and the Gujarat government to set up the facility on 1,100 acre at Sanand that would initially produce 2.5-3 lakh cars per annum and later expand to five lakh cars. It was also planned to house 60 ancillary units.

As time passed, the relations between the company and the Gujarat government appeared to have soured after the former began to contemplate on manufacturing another model to utilise the vacant production capacity at the Sanand plant. In an interview with The Indian Express in May 2015, the then chief secretary D J Pandian went public about the idle capacity at the plant and asked the company to manufacture something else after submitting a fresh proposal which will be sans the “special project” status accorded to Tata Nano.

Dipping Sales

Soon after in March 2009, Nano was commercially launched and it received about 2.06 lakh bookings. Thereafter, the “people’s car” failed to impress. Tata Motors sold just 1.75 lakh Nanos between March 2009-2012. The sales dipped by 28 % in 2012-13, when just 53,848 of these cars were sold. It further slid to 21,129 in 2013-14 and to 16,903 cars in 2014-15.

Between April- February this fiscal, the company sold over 20,000 cars which was 24% more than the 15,333 cars sold during the 11-month period in 2014-15, according to data by Society of Indian Automobile Manufacturers (SIAM). The strike seems to be already having an effect on the production of Nanos and it fell to 1,594 cars in February 2016 compared to 1,790 in January 2016.

The industrial landscape of Sanand has seen a sea-change ever since Tata Nano set foot at this locale about 40 km from Ahmedabad, but not without the Gujarat government doing its bit to help the plant. Though the details of the SSA has been kept secret, official figures shared in the Assembly show that the state government had paid over Rs 456 crore as “loan” to Tata Motors for setting up its plant between 2012-2015 (till January 31).

On Friday, the ongoing labour strife at the Tata Nano plant bore fruit for the workers after the Labour Department recognised newly-formed union that christened- ‘Bhartiya Kamdar Ekta Sangh Sanand’.

Other auto giants

A similar labour strike involving around 450 contractual workers hit the General Motors’ plant at Halol near Vadodara in January 2014. The issue at this car manufacturing plant that first set foot in Gujarat in 1996 was about alleged discrimination between workers, where a few on contract were given fresh appointment letters. In 2010, the same plant was hit by another strike when employees demanded better wages. Later in 2011, over 700 workers went on an indefinite strike alleging that they were facing “health hazards” and the company had violated a few norms related to provident fund and gratuity. The strike went on for over a month. In the first half of 2015, the company announced that it will shut down the operations at Halol.

After Tata Nano set foot in Sanand, French carmaker PSA Peugeot decided to set up a Rs 4000-crore plant and signed an SSA in 2011. The company was allocated land at Sanand, but it did not go ahead with the project.

Among the car projects in Sanand that have been successful is Ford Motors that inaugurated its manufacturing facility in March 2015. Spread over 460 acres, the plant has an initial installed annual capacity of 2.4 lakh units, while the engine plant has a capacity of 2.7 lakh. Apart from Ford, both Maruti Suzuki and Honda are in the process of setting up their respective vehicle manufacturing plants near Vithalapur in Ahmedabad district.

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