Swadeshi meets unionism at Maruti

But Maruti isn’t a PSU, you might say. And, in any case, at an average of around Rs 18,000 per month for workers, its salaries are surely muchhigher than those in various PSUs. Talk to the union’s general secretary Mathew Abraham and he’ll tell you that the answer’s yes to both these questions. He’ll also tell you that the current formula for calculating DA at Maruti today is similar to that in the PSUs. So what exactly is it that the union wants in that case?

Well, what Abraham is saying is that it is almost certain that PSU emoluments such as DA will be hiked soon since a pay revision for them is on the cards — if and when that happens, Maruti’s workers should get this too. So it wants to be treated like a PSU when it comes to certain benefits, but not as a PSU when it comes to overall salaries!

While that’s a somewhat dubious argument, it’s still okay since unions do try and use any excuse to try to extract higher benefits for their members. That’s part of their job, at least in the narrow fashion that most trade unions appear to view their responsibilities nowadays. What makes the whole thing look a bit fishy and motivated, though, is theunions taking a stance that further divestment of the government’s stake would result in Maruti getting `Suzukiaised’ and that this would affect the interests of both the workers as well as the nation.

And though unions don’t ever have the right to determine who will own a company, the only justification for its anti-Suzuki stance is if there is evidence to show that it will run Maruti into the ground, or will fire workers en masse once it gains control. Most evidence available over the past few years, however, points to how it has been the government which has put all manner of roadblocks in Maruti’s efficient functioning.

It is fairly well established by now that Maruti’s expansion programmes ran into trouble around the time when Suzuki refused to go along with the then Congress government’s industry minister K. Karunakaran’s desire that Maruti set up its new plant in his home state and not adjacent to its existing plant in Gurgaon in Haryana.

It is equally well known that successive governments keptdelaying these plans on the specious grounds such as those that Suzuki was `milking’ Maruti by over-charging on components supplied by it from Japan and that it was refusing to manufacture critical parts such as gear boxes in India. Much of this is just so much nonsense and has been dealt with elsewhere (The Indian Express, December 7, 1997).

Apart from cheap innuendo, for instance, no one in any of the previous governments provided even elementary back-up evidence to show such over-charging on components supplied by Suzuki from Japan. And, at Rs 5,000 a gear box, the value addition to be got from producing gears in India is surely low, especially when one looks at the large amounts of capital investment required to set up such facilities. Besides, at 95 percent, Maruti’s indigenisation is higher than the 70 percent laid down by the government’s own spanking-new automobile policy.

If you juxtapose this body of evidence with the dismal performance of the majority of PSUs, it’s quite evident thatgovernment control, in fact, is more likely to run Maruti into the ground than anyone else. None of this, of course, really bothers the trade union’s leaders whose antics have brought about a situation in which certain political parties are already trying to gain control of Maruti’s union and link it with others in the region, in order to increase their own bargaining power. Maruti’s union would do well to keep in mind what aggressive trade unionism at the cost of everything else is doing to another auto major across the world.

Continued strikes by the United Auto Workers has ensured that US auto giant General Motors has shut down several north American production units and has lost $1.2 billion in net income already as a result of this over the past few months — 13 such strikes over the past 3 years have cost it $2.7 billion. Maruti, fortunately, is nowhere near a situation where, like GM, it has to get rid of around a fifth of its workforce in order to remain competitive. But taking sides in a managementfight, or allowing the union to get unduly politicised is surely not in the interests of the workers. Hasn’t someone told them that?