National Conference of Engineering Workers of India
2 & 3, JUNE, 2007 – PUNE.
Report submitted by
Com. H. Mahadevan, Dy. General Secretary, AITUC
• Engineering Industry – A
Background:
The Engineering Industry, which broadly encompasses the capital goods and
the intermediate goods, is considered to be the backbone of all other
industries. The trend and the pattern of its growth determine the productivity
and the performance parameters of the other industries.
The major industrial groups that form a part of the engineering sector
include industrial machinery, electrical machinery, machine tools, automobile
industry, boilers, turbines and telecommunication, cables etc. Its strong
backward and forward linkages were well recognized by the planners and emphasis
was placed on the development of this industry right from the very inception of
planning. In order to build sufficient indigenous capacity, the Government had
earlier protected this sector through high custom duties.
The first attempt at “rationalizing” the Indian capital goods
industry was made in 1975 when 24 industries including industrial machinery and
machine tools were de-licensed. Subsequently, measures were taken to further
deregulate the industry and a Technology Up-gradation Fund was established for
the capital goods industry. The 1990s, were marked with dismantling of the high
tariff walls. The tariffs on capital goods fell sharply during this period. In
spite of this, after initial adjustments, the capital goods industry recorded
11.5 per cent growth in 1995-96. The performance of the sector was quite good
till 1999-2000 when the slow down started. The overall industrial growth also
reflects a slowing down. After recording a peak growth of 13 percent in 1995-96,
the overall industrial growth declined to 2.8 per cent in 2001-02. The decline
is sharper in case of the capital goods or the engineering sector. The industry
actually shrunk by 3.8% in 2001-02.
The poor performance of the industrial sector is considered to be due to a
number of structural and cyclical factors such as business and investment
cycles, a lack of domestic and external demand, high real interest rates and
infrastructural bootlenecks in power and transport. Since the demand for capital
goods is a derived demand and depends on the demand for investment goods, the
overall slowdown has also led to a decline in demand for the products of
industry. The engineering sector has been affected by the squeeze in investment
in recent years. A slowdown in investment in the infrastructure projects and
delay in the implementation of the sanctioned projects has worsened the
situation. The policy of the Govt. has not been in favour of manufacturing
sector, but service sector in the recent years. This had its toll on the growth
of Engineering/Metal industry in a big way.
According to the (then) Annual Survey of Industries, the total output of
engineering industry during 1999-2000 was Rs. 13,821 billion and the invested
capital was Rs. 2724 billion during the same period. The total employment in
this industry was more than 139 lakh.
The poor performance of the capital goods sector has also had an impact on
the industrial relations in this sector. While the number of strikes and
lockouts declined in engineering sector the overall man-days lost due to this
has shown an increase from 1432 in 2000 to 2619 in 2001. The increase in the
man-days lost, has however, been due to a sharp rise in the lockouts.
• Classification:
Broadly Engineering industry (known as a part of Metal industry
internationally) could be classified under the following categories / sector (i)
Heavy Engineering which includes shipbuilding, aeronautics, heavy machine
building etc. (ii) Small and light engineering (iii) Automobile & automobile
accessories / ancillaries (iv) Electrical and Electronics (v) others. Thus they
include industries from ‘pin’ manufacturing to ‘ship
building’, ‘bucket’ to ‘aircraft’ production,
besides auto/auto parts industries.
The latest development is in the information and communication technology
sector, being part of the Electronic industry, in the hardware sector. This is
expected to be a flourishing sector for the time being. However, apart from the
IT sector, there is a large area in the newly emerging / emerged industrial
estates / area including EPZs / FTZs in different parts of the country and also
would be in the new SEZs, being sanctioned by the concerned Govts. very
fast.
Indian Labour, sent to several Gulf Countries, through the contractors and
sub-contractors, for projects undertaken by our public sector industries (Engg.
Projects India Ltd., HSPL, NBCC, NPCC, EIL etc) and also many private sector
concerns are drafted to private recruiting agencies towards corrupt practices in
the absence of (implementation of) proper, satisfactory regulations. They are
many times forced to work under humiliating conditions on semi-skilled and
unclean jobs, which the local workers would not do.
In the states, the Engineering industry encompasses several branches /
areas. For example in Tamil Nadu, types of engineering industries (small, medium
and large) are as under.
- Heavy Engineering industries like boiler fabrication, power plant equipment manufacturers.
- Automobile industry & auto parts ancillaries.
- Textile machinery (For textile mills, garment, apparel and woven
machinery).
- Electrical industries (Pump, motor, switchgear, transformer and
accessories).
- Electronic industries (Solar cells, electronic items, circuit boards and
PLC’s).
- Steel Melting, rerolling, bars, rods, angles and stainless steel sheet
manufacturers.
- Foundries (Iron and steel).
- Bicycle and ancillaries.
- General engineering industries like machine shops, electro plating,
painting etc.
- House hold utensils, related material like ‘Kalasam’,
Statues etc.
- Kitchen equipments (Mixers, grinders, steam cookers, exhaust
arrangements etc.)
- Medium engineering industries like Bus-Lorry body builders, refractory
manufacturers and mineral pulverisers and Wind energy ancillaries.
- Agriculture implements
- Ceramics and porcelain industries
- Noble metal manufacturers smelters like copper, aluminum.
Wagon Building is a most important line of activity in Engineering Industry
in West Bengal. Major quantity of Wagon being manufactured in West Bengal which
caters the needs of Indian Railways. Most prominent wagon builders Burnstandard,
Braithwait, Jessop, Texmaco, Titagarh steel are in West Bengal. Though there
were some crisis due to lack of order for railway but presently there is
improvement in wagon building industry.
• Automobile Industry:
India’s automobile industry is selling a dream. This export surge comes close on the heels of India, with production of 503,000 units in 2003, overtaking Italy as the world’s second-largest manufacturing base for small cars. Japan still leads with 1.82 million units in 2002-03, but its market is shrinking even while the Indian market is growing. While Japan’s small car sales fell 1% for the second consecutive year, India’s rose almost 10%. The future looks even brighter. Hyundai alone is cranking up its annual export capacity so that by 2010 it can export 500,000 small cars like the Santro and the Getz from its production base in Chennai. Maruti and Tata Motors are not disclosing their export plans. But even if they maintain their ratio of small car exports vis-a-vis Hyundai, they would be exporting 350,000 and 250,000 units, respectively, by 2010. Together with the domestic market, India could well make more than 2 million small cars by then.
Little wonder then, that this is leading to some excited speculation in
Indian auto circles. Can India emerge as a small car hub?
It depends on what we mean by auto hub. Leaf through an ICRA study on how
the Indian and the Chinese auto industries compare, and you will find that
India scores high on two parameters – availability of skilled labour,
where we rank second, and availability of qualified engineers, where we come
out tops. What does this mean? Simply that India is as strong a contender as
anybody else to the title.
Global Small Car Sales:
India (2003) 503,000
Japan (2003) 1,820,000
China (2003) 480,000
Europe (2002) 890,000
For India, the international backdrop to the dream is certainly favourable.
India’s export surge comes at a time when the global auto industry is in a
state of flux. Between themselves, the global automakers can make 76.8 million
cars a year. But the demand is just 46 million units. That leaves 40% capacity
unutilized. This is putting margins under pressure. The result: a
consolidation-hungry industry is shuffling production around, sniffing for ways
to cut costs. Uncompetitive plants are being closed and, unlike in the past,
when companies had to set up plants in a country to access its market, today the
only factor determining new plant locations is economics.
• World Vehicle
production:
Table shows the ten highest volume platforms in 2005. In total, these platforms account for almost 13million units of production, or one out of every five vehicles built that year.
Highest Volume Vehicle Platforms, 2005
Table shows the ten highest volume platforms in 2005. In total, these platforms account for almost 13million units of production, or one out of every five vehicles built that year.
Highest Volume Vehicle Platforms, 2005
|
Rank
|
Company
|
2005 Production
|
Select Major Models
|
|
1
|
VW
|
1,968,215
|
VW Golf, Passat, Skoda Octavia, Seat Leon, Toledo, Audi A3
|
|
2
|
Toyota
|
1,376,950
|
Toyota Corolla, Pontiac Vibe
|
|
3
|
Toyota
|
1,363,312
|
Toyoto Camry, Estima, Lexus ES, RX
|
|
4
|
Ford
|
1,328,107
|
Ford Focus, Mazda3 and 5, Volvo S40, V50, C70
|
|
5
|
Toyota
|
1,176,085
|
Toyota Yaris, Platz, Vitz, Aygo, Peugeot 107, Citroen C1
|
|
6
|
PSA
|
1,152,618
|
Peugeot 1007, 207,206, Citroen C2, C3, Pluriel
|
|
7
|
Hyundai
|
1,149,069
|
Hyundai Elantra
|
|
8
|
Honda
|
1,146,407
|
Honda Civic. CR-V, Step Wagon, Stream, Integra
|
|
9
|
GM
|
1,107,257
|
Cadillac Escalade EXT, Chevrolet Avalanche, Cheyenne, Silverado, GMC
Sierra
|
|
10
|
GM
|
1,104,145
|
Opel/Vauxhall Corsa, Meriva, Chevrolet Celta
|
(Source: PriceWaterhouseCoopers Automobile Institute,
Just-Auto)
It is to be noted that many of these TNCs have their plants set up in India for cheaper labour costs and better output.
Global carmakers had invested nearly US$3bn over the prior twelve months alone. The following lists the recent and near term capacity expansions for the production of passenger cars:
• Suzuki Motor will invest a further 200 billion yen
(US$1.66bn) up through 2010 in its Indian venture, in addition o the 100 billion
yen spent on plants run by Maruti Udyog. The plan will take total
capacity to one million cars a year from 630,000 now. Maruti, majority owned by
Suzuki, opened its fourth car plant in Haryana state near New Delhi with planned
initial capacity of 100,000 units a year, which will expand to 300,000 units by
2010. A diesel engine and gearbox plant, started up in early 2007 with an
output of 100,000 units, will reach 300, 000.
• Hyundai, as India’s second largest passenger car
maker, is increasing capacity up to 600,000 units at its assembly complex in
Chennai (Tamil Nadu).
• Tata Motors, the country’s third-leading producer of
cars and the largest truck and commercial vehicle manufacturer (including its
Telco division), formed a joint venture with Fiat to make more than
100,000 cars and 200,000 engines and gearboxes from 2008 in Ranjangaon, near
Pune (Maharashta) with an investment of up to US$895 million.
• Tata Motors is investing US$220 million in an ultra-low cost
car project, involving the design and production of a car selling for about
US$2,200 (Rs. 1-lakh). Fiat is assisting with engine development. Start-up is
expected some time in late 2007 or early 2008. Factory construction began in
Singur, near Kolkata (west Bengal) on agricultural land taken by the government
thus threatening to displace thousands of local farmers.
• Toyota aims by 2008 to have 200,000 units of capacity
operating in Bidadi, near Bangalore (Karnataka). Daihatsu, part of the Toyota
alliance and Japan’s second largest mini-vehicle maker after Suzuki, will
reportedly manage and operate the facility.
• General Motors is upping capacity at Halol (Gujarat) from
60,000 to 85,000 units and will invest US$300 million to build a second car
plant near Pune (Maharashtra), with up to 140,000 units of capacity.
• Renault and Mahindra & Mahindra, India’s
second largest light truck maker (and a leading tractor producer as well), are
due to build a plant to assemble 500,000 units of the Logan model a year
beginning in 2007 in Nashik (Maharashtra).
• Nissan plans to start building compact cars in 2009,
investing up to US$500 million for a plant with annual capacity of 200,000
units, expandable to 400,000. Location is reportedly in Hazira (Gujarat) or
possibly another port city.
• Honda plans to expand capacity at its plant in Noida (Uttar
Pradesh) to 100,000 units by 2007, and plans to open a second 100,000-unit plant
in India within a three to four year period.
• Skoda-Volkswagen will start assembly at a 25,000 unit
facility in Aurangabad (Maharashtra) beginning in 2007, and VW plans include a
new facility in Pune (Maharashtra) with capacity of 110,000 units operational in
2009.
• Ford operates a 100,000 unit car plant in Maraimalai Nagar
(Tamil Nadu).
• Expansions are taking place in the truck sector as well. Ashok
Leyland, the second leading commercial vehicle maker, is expanding a plant
in Hosur (Tamil Nadu) to 100,000 units by 2008.
From the above, it is clear the fastest growing geographic concentrations
in the automotive industry of India are in and around Chennai and the state of
Tamil Nadu, Gurgaon and the state of Haryana, and Pune and the state of
Maharashtra.
It is seen that Indian Auto industry is the largest three wheeler market in
the world; It has the second largest two wheeler market in the world; Fourth
largest passenger vehicle market in Asia. Fourth largest Tractor market in the
world and Fifth largest commercial vehicle market in the world.
• Ship breaking Industry:
Ship breaking activity grew into a full-fledged industry by 1979, when
Government of India recognized it as a manufacturing industry. Now it is been
recognized as a manufacturing process as per Central Excise and Sales Act, also.
The ship breaking activities are carried out at various coasts of the country,
however, the main center lies on the West Coast at Alang, Gujarat. On an average
200 ships per year are being cut at the Alang Ship Breaking Yard.
Aland-Sosiya Ship-Breaking yard(ASSBY):
The Ship Breaking Yard at Alang located near Bhavnagar in Gujarat state is
considered to be the largest ship breaking yard in the world. Alang Ship
Breaking Yard established in year 1982, now accommodates 183 plots spread over
around 10 kin long stretch along the sea coast of Alang and Sosia, which has a
typical location advantage suitable to the ship breaking business. On an
average, around 200 ships are broken every year with a highest nos. of 354 in
the year 1996. The annual turnover of the industry is around 2000 crores. This
has also led to the development of other ancillary business including re-rolling
mills, oxygen plants, etc.
The workers are hired and employed by the ship breakers directly. GMB is
not involved in the selection or employment of the workers or their work
distribution. As a result, the wages, working conditions, provision of physical
facilities are the responsibility of the ship breakers. The Factory Act provides
that if the contractor fails to pay the wages of the labourer, the principal
employer becomes responsible for the failure. In this case, the
‘Mukadam’ is the labour contractor and the ship breaker is the
principal employer.
Workers at the Alang yards generally are not locals from Gujarat State but
come from distant impoverished States such as uttar Pradesh in the
north.
• Export Promotion Zones
/SEZs:
In India there were 7 EPZs employing around 100,000 workers. On
10th February 2006, the Government of India cleared the new EPZ Act
and also cleared 22.22 billion USD for 166 proposals. According to government
500,000 direct and indirect jobs will be created. Further the government has
cleared the allotment of 400 thousand hectare of land. It is to mention that
under the act they have made no relaxations of labour laws, but left it to the
state Governments
• Foreign Direct Investment:
In terms of FDI performance index, India is ranked 119 (and China is ranked
47) amongst 140 countries covered for the period 1998-2000 (UNCTAD, World
Investment Report 2002). In terms of FDI potential, India is ranked 104 (and
China is ranked 84) amongst 140 countries covered for analysis. In terms of
absolute FDI inflows, India is ranked 6th among Asia’s leading
economies, after China, Hong Kong, Singapore, Taiwan and Thailand.
The annual actual flow of FDI in India rose from US$0.1 billion in 1991 to
US$3.44 billion in 2002. FDI in 2002 accounted for 1 percent GDP and 4.3 percent
of domestic investment, the corresponding figures for 1991 being 0.07 and 0.12
respectively. It is believed that if corrections are made for the under
estimations in the definition of FDI in India, it works out to be Rs. 7-8
billion.
The total figures of FDI inflows however disguise considerable variation in
performance among states. Of the 28 states, six states namely Maharashtra,
Tamilnadu, Karnataka, Delhi, Andhra Pradesh and West Bengal accounted for over
86% of the total FDI amount approved during 1991-2002. Their share in total
number of approvals was over 75%.
FDI: inflows (2005) (in relevant industries.
(In US$ million)
|
INDUSTRY
|
2004-05 (P)
|
2003-04
|
2002-03
|
|
Mining
|
11
|
18
|
9
|
|
Manufacturing
|
924
|
426
|
480
|
|
Electricity
|
14
|
90
|
48
|
[SOURCE: reserve Bank of India Annual Report
2004-05]
• Public Sector Engineering Companies:
Since Independence, the public sector has been at the centre stage of
India’s planned development. It has pilotated the destiny of Indian
economy. The development of public enterprises has resulted in the growth of a
strong and diversified industrial base, has helped build technological
capabilities in the critical areas and has served as a nursery for development
of managerial and technical skills.
At the time when the private sector had neither necessary resources nor the
will to undertake the risk involved in the large and long gestation investment,
when considerable inequality in income, low level of employment opportunities
and serious regional imbalances prevailed the stage intervention was inevitable,
thus the public sector enterprises emerged and become an important instrument of
national economic development policies.
The Govt. of India changed its policy from ‘command economy’ to
‘competitive economy’ moving towards globalisation and neo-liberal
policies of the IMF, WB & WTO regime. The emphasis shifted form
socio-economic goals to merely commercial parameters from basic economic goals
to financial public sector and taking advantage of the new economic environment,
the public sector came in for severe attacks from different quarters, especially
the vested interests. Myths and canards have been spread without regard to
facts.
An eye-opener on the performance of the CPEs in comparison with the private
sector companies had come out in the book published by the SCOPE (Standing
Conference of Public Enterprises) based on an extensive study conducted by the
CIER (Central for Industrial & Economic Research) New Delhi a few years ago.
The study is based on an empirical data and make an objective
appraisal.
According the comparative study, the public sector, despite several
constraints, divergent goals and non-playing field in terms of autonomy and
freedom of action, has performed better than the private sector even when viewed
in terms of financial performance in a number of parameters. The sector has
served its different stake-holders better and has not indulged in the unethical
business practices. If it is restructured and given freedom of operation it can
prove its mettle and perform in accordance with global benchmarks.
The study revealed that of the total investment of Rs.230,140 crores in 240
CPSE, the paid up capital constituted about 33.5 percent and the balance was
long term loans. Of the total paid up capital, the share of the government was
84 percent. Of loans, the share of the government was much lower at about 22
percent. The govt. thus contributed Rs.96,717 or 42 percent of the total capital
employed – not Rs. 230,140 crores as is generally perceived.
Against the total investment of Rs.96,717 crore (both in the form of share
capital and loans) in 1998-99 alone, the govt. earned including taxes Rs.46,924
crores or 48.5 percent (lf the total capital investment by the Govt.). The
position was not substantially different in the preceding two years. The total
earned / received by the govt. works out at a whopping 165.5percent over the
three years 1996-97 to 1998-99, on an average investment of Rs.92,953 crores
during these years. This means that the govt. has earned Rs.153,835 crore in the
three years against its total cumulative investment of Rs.96,720 crores, an
astonishing equation. Even if the share of profit restrained by the corporation
is excluded the total received by the exchequer comes to Rs.128,255 crore, still
138 percent of the invested capital.
PERFORMANCE OF CPSUs in 2005:
(Rs. in Crores)
i. |
Total paid up capital of 240 PSUs |
82437.17 |
ii. |
Net Profit of 232 operating PSUs |
14555.00 |
iii. |
% return on equity on all |
14555x100 = 17% 82437.17 |
iv. |
Total paid up capital of 125 Profit Making PSUs |
50113.45 |
v. |
Net Profit on 125 Profit Making PSUs |
24615.00 |
vi. |
% return on equity of the 125 Profit Making PSUs |
24615x100=49% 50113.45 |
vii. |
Paid up Capital of Oil Sector PSUs 14 |
4320.79 |
viii. |
Net Profit on Oil Sector PSUS. |
9569.79 |
ix. |
% return on equity |
9569.79x100= 221% 4320.79 |
x. |
Paid up capital on Non-oil Profit Making PSUs |
45793.00 |
xi. |
Net Profit on Non-oil Profit Making PSUs |
15045.00 |
xii. |
% return on equity |
15045x100 = 32.8% 45793.00 |
• Challenges for Workers & Trade
Unions:
Since the early 1990s, government policies have resulted in greater
deregulation, flexibilisation and casualisation across the Indian economy.
Employers continue to push for changes in laws that would increase labour market
flexibility, with the backing of the international financial institutions. In
their drive to be able to hire and fire workers at will, employers are taking
aim at two pillars of labour protections – the Industrial Disputes Act and
the Contract Labour (Regulation & Abolition) Act. Such a vision is already a
reality in government established SEZs, now numbering 150 across the country,
some involving the Engg. sector
• Flexibility &
Casualisation:
Outsourcing, sub-contracting, and casualisation have created a high degree
of labour flexibility for companies and a growing sense of insecurity for
workers. In particular, a sector wide push by employers to replace permanent
jobs with precarious ones ultimately threatens protections for all workers and
has in recent years become one of the most challenging and widespread facets of
automotive industry restructuring.
Flexibility has come in three main guises. In the area of work
organisation, functional flexibility involves multi-tasking &
multi-skilling usually requiring introduction of teams. In the area of
compensation, earnings flexibility links pay to the performance of an
individual worker, team, group or enterprise. And in the area of employment
practices and work time, numerical flexibility is implemented
via:
o Shifting production through
outsourcing and subcontracting,
o Changing the employment
relationship from permanent jobs to casual, temporary, fixed-contract or
part-time work, and
o Lengthening hours worked using
overtime, alternative shift schedules and hours banking schemes.
The continued expansion of such forms of flexibility benefit employers but
often contributes to more uncertainty and insecurity for workers. This is
especially so for those working in precarious forms of employment. Metalworking
unions variously refer to such jobs as irregular, atypical, temporary,
fixed-term or contract employment. Workers filling these jobs are often
recruited, employed and dispatched to such posts through labour brokers and
temporary labour hire agencies, typically receiving far lower wages and under
much inferior terms and conditions as compared to their permanently employed
colleagues. Moreover, their precarious employment status also often means they
are denied basic social and economic protections afforded to permanent
employees.
The fact remains that final assemblers exert effective control over their
respective supply chains through investment and sourcing decisions and tight
control over terms and conditions of contracting. In reality they are the
principal employers. Metalworking trade unions around the world are challenging
the unequal and unfair conditions of precarious work, demanding protections be
extended and workers’ rights respected regardless of the employment
relationship. These demands must be common objectives of both permanent and
fixed-contract workers whose unity in action is essential to achieving shared
goals.
• The permanent & contract labour in
Jharkhand is in Annexure III as an example.
• OTHER ISSUES CHALLENGING WORKERS & TRADE
UNIONS:
1. As in all Industries the New Economic Policies of the Govt. of India as
well as most state govts. have adversely affected the Engineering Industry also;
the job losses, closures, retrenchment and reduction ‘either with or
without VRS’, impact of technology etc. are all the more serious in the
Engineering industry.
2. While the Central Public Sector Engineering Companies were either sought
to be disinvested leading to privatisation, or liquidated with or without the
BIFR process the position is more or less the same in respect of the states run
PSUs also. Many state govts. want to do away with their ‘non-profit
making’ PSUs, causing uncertainty and untold miseries to lakhs of
employees employed in them and in turn their families. While the assets of these
PSUs worth several crores are sought to be sold much below the market value, the
workers have not been paid regularly for several months and even those who left
the services were not paid their terminal dues. Periodic wage revision in these
industries has become a forgotten event. In fact they face ‘concession
bargaining’ in place of ‘collective bargaining’ because of the
threat to their job security.
3. In the private sector, the ‘capital intensive industrial
scenario’ has sharply axed many existing jobs while creating not many new
jobs.
4. While the old industries, either due to non-improvement of technology or
due to competition in the ‘free-market’ meant for the MNCs’
and TNCs or due to the govt. policies such as import of capital goods, free
access to MNCs in core sector including power sector etc. are declining. The new
industries have come with a different structure, leaving aside the entire work
force in the un-skilled and semi-skilled categories as those jobs are off loaded
/ undertaken by the small-scale industries and parallel production done
elsewhere. Even these small-scale industries have been affected on account of
the govt’s policy on globalisation and acceptance of the WTO
conditionalities, which was evident from their own demonstration in Delhi.
5. Even in the well established engineering companies the strength is
gradually getting reduced as there is no replacement to those who go on
superannuation etc. The vacancies arising out of VRS are not filled resulting in
the increased workload to the rest of workers. The workers in these cases are
faced with the twin problem of reduction in manpower as well as increased
workload, but forced to compromise with the settlement of increased wages for
the remaining, a part of which by way of incentive schemes linked to
production/productivity
6. The decline of manufacturing industry is not offset by the increase of
service based industries. Proliferation of small scale industries, ancillaries
is however a reality.
7. Vast and fast changes are taking place every where in our economic
structure, including the Engg. Industry. Closures and job losses have become
real challenges. In addition to or instead of the demand for revival and
rehabilitation, “demand for idle wage” have unfortunately become a
periodic affair in these units. The question of “Unemployment
Allowances” as a policy directive becomes an imperative necessity under
the circumstances.
8. A study reveals the dumping of cheaper Engineering & Electronic
goods from China in India and border countries markets making the Indian goods
redundant.
9. Very little importance is still being placed on environmental protection
by employers even though the subject is becoming an even more frequent object of
social conflict. Environment has a direct influence on human working and living
conditions. Workers, especially are affected by environmental pollution. New
terms of atmospheric pollution are appearing in addition to existing and yet
unrecognized hazard at the work place.
10. Each new stage of Technological ungradation brings in its wake several
new problems and hazards in the production process at the work place. Issues
like ‘full protection to employment and earnings’ of the workers who
are made ‘redundant’ due to technology changes, adoption of
technology by taking workers / unions into confidence, provisions for
re-training and security of employment, re-defining of qualification needs,
adoption of selective key technologies in order to contain occupational health,
safety and environment etc. are some of the main issues to be dealt with at the
wake of the changing technologies.
11. The new economic policy under neo-liberal globalisation has proved to
have no ‘human face’ contrary to what was claimed by its authors in
India. Many decisions of the Spl. Tripartite Committee constituted to consider
the impact of New Industrial Policy and that the Industrial Committee on
engineering industry at the central level were kept in cold storage or not
sincerely implemented. In the state level, there are neither tripartite
committees to consider the problems of workers/industry in the Engg. Sector nor
there is effective implementation machinery.
12. Apart from the specific issues concerning the Engg. Industry there are
general issues such as (i) Amendments to Bonus Act (ii) Gratuity Act (iii)
Improvement in Pension Scheme (iv) Constitution of a fund for the revival of
sick industry at the centre as well as states, (v) skill development fund/scheme
to avert redundancy in work place (vi) unemployment relief etc.
• Management Strategies:
Some of the strategies developed by the Companies in the Engineering Sector
as well, in private companies include the following which are not desirable from
the working class / trade unions point of view:
1. Transfer of jobs from bargainable / unionisable to
non-bargainable/non-unionisable categories and making the unions redundant or
insignificant.
2. Sub-contracting. The proportion of sub-contracted products which was
around 10 percent in 1970s increased to 25 percent in the 1980s and even up
to over 50 percent in some units and its i is over 60% after 1990s. The total
manufacturing activity was outsourced to get the flexible and cheap labour. In
some of these units, the turn over was more during strike periods thus, yielding
more profits, because of the near-total outsourcing.
3. Starting parallel production and transferring their production either to
a new low wage centre or to organised sectors.
4. Use of contract labour. Initially permanent jobs such as canteen,
transport, cleaning, loading / unloading etc. were extended to maintenance of
machinery, production, carpentry, painting, electrical work, office work, plant
cleaning, security etc. and now even to other permanent jobs.
5. Productivity coupled with flexibility, clubbing various grades together
and forming one grade, increase in productivity, linking output with long term
wage agreements, changing work norms, reducing jobs, technology changes, changed
production form Taylor Model to new concept of re-engineering, multi-trade and
flexible job etc.
6. With the adoption of the above strategies the one thing which is
becoming more and more common is what is known as ‘Management
Demands’. These generally include the following:
a. increase in working hours;
b. reduction in public holidays and leaves;
c. longer settlement period;
d. multi-trade job;
e. closure of certain ‘unviable’ departments;
f. transferring the production of ‘low value items’ to
subcontracted units;
g. horizontal and vertical flexibility;
h. technology change as management prerogative;
i. reduction in employment by not filling up ‘wastage
vacancies’;
j. increase in quantitative and qualitative production and productivity
increase without increase of manpower;
k. ceiling on Dearness Allowance or substituting the system of DA with
other systems, and
l. Voluntary Retirement Schemes of different types.
• Wage levels in Engineering Industry – A
bird’s eyeview
According to BVR Subbu, Hyundai Motor, “In India labour cost is very
low”. I.V. Sumantran, Tata Motors says “Tata Motors passenger cars
project has cost the company $550 million. That is significantly cheaper than it
would cost anybody in any other country in the world.”
There is no national minimum wage or national settlements in the
Engineering industry. There used to be state level settlements in a very few
states, viz. West Bengal and undivided Bihar, mostly covering the medium and
small industries in the private sector. Neither any encouragement nor
enthusiasm was shown for such state level settlements in the other states. The
last National Wage Board for Engineering industries, after several years of
proceedings, gave three different reports and none was implemented in most
engineering industries. Settlements are taking place periodically on company /
unit wise.
In the public sector, company level, nations wide settlements have been
taking place. (eg. BHEL, Bangalore based , Hyderabad based PSEs etc.) earlier
for 4 or 5 years periodicity, which has gone to 10 years in the last settlement
in public sector. In the sick PSEs no settlements are seen and the workers who
go on VRS from sick industries are paid enhanced compensation in lieu of the
settlements. The CPSTU has demanded 5 years settlements for all PSUs. Public
Sector Engineering workers will have to naturally be a part of the movement of
PSU employees.
However, several state level public sector industries are either sick or
some in the process of closure and in the rest which are functioning, as per the
state Govt’s directions around 10% increase is given in the form of wage
revision once in 5 years.
Some state governments do notify industry-wise minimum wage for Engineering
industries. Some of these are in Annexure I & I (a). (Karnataka & Tamil
Nadu); similar minimum wage notifications for Engineering workers do exist in
many other states also. It was informed in the recent ILC meeting that Haryana
Govt. has notified the highest minimum wage. (above 3, 000 per month).
Factually, there is a big gap between the minimum wage of the permanent
& contract workers in the Engg. Industry (e.g. 3500 and Rs. 22,000 per month
in Hyundai Motor, Chennai; Rs. 18000 in Lakshmi Machines, Coimbatore).
• Some organisatiional issues:
National Federation:
AITUC has decided to re-vitalise the All India Engineering Workers
Federation and make it a vibrant national federation of the engineering Workers.
Hence, this Conference, after a long gap, supported by our host organisations
being held in Pune. The some spirit and enthusiasm should continue in future
also.
State Federations:
The prelude is organising and strengthening state level Engineering Workers
in big and small, public & private sector companies and respective states
should convene state level Engineering workers unions, in order to form state
federations.
• Unit level Trade Unions:
While many old engineering companies including foundaries in several states
have became sick and non-functional, many new units emerge with new technology
in small, medium and big companies in the states. Needless to state that
organising them in the new industrial estates / area as well as in SEZs /FEZs.
There would be a number of unfair practices on the part of the employers, many
times in connivance with the respective state Govts / machineries and police,
with clandestine understanding. This, of course, will have be fought, wherever
possible, in solidarity with other unions in the area / district.
• Multiplicity of unions:
Multiplicity of unions is a bane in the Engg. Industry also. Inspite of
clearly exhibiting our strength and membership in different ways, the other
unions favouring management, gang up and create hurdle in achieving the demands
(eg. Mazgoan Dock, Mumabi).
In multiple unions situation, Joint struggle unitwise and companywise is
yet another task which can not be ignored.
• Organise the
Unorganised:
This is a task once again renewed in the last AITUC Congress, held in
Delhi. In the organised sector, equal or more number of contract workers are
predominantly engaged. Our first task, therefore, is organising them. While
permanent employment of contract workers attending to permanent/perennial nature
of jobs is our goal, at least they must get the minimum wage paid in the
respective industry, in the first phase.
• Some questions to ponder
over:
i. The scope and potential for the organisation of the workers of the
Engineering industries at the National & State levels.
ii. The common demands of the Engineering workers on which collective
campaigns/struggles can be launched at the relevant state level or national
level.
iii. The strategies in the organisation of Engg. Workers in the newly
emerging, technology oriented units and the new zones.
iv. The national level programme we should undertake on priority in
2007.
v. There is a proposal from the NTUI (New Trade Union Initiative)
consisting of independent, un-affiliated engineering unions in certain states
like Tamilnadu, Gujarat, Maharashtra etc. to make a strong (independent)
federation along with ours at the National Level (keeping the affiliations of
the individual unions unaffected) Do we respond to this?
vi. To workout specific struggles of engineering workers unions –
coordinate the units of the Federation with others at the regional level,
towards solidarity actions.
vii. The WFTU has a TUI (Trade Unions International) of Metal Workers
(international name for Engineering workers is Metal Workers) which was not
effectively functioning. There is a proposal to once again revive Metal TUI,
consisting of metal and engineering workers world over.
The Metal TUI Conference will be held in San Sebastian, Spain in 2008. We
should effectively participate in the International Conference.
viii. All other issues relating to our organisation, proper coordinated
functioning, setting up a Fund of future tasks and struggle.
* ORGANISE THE UNORGANISED.
* UNIONISE THE NON-UNIONISED.
* NO CONTRACT LABOUR ON PERMANENT JOBS.
* UNIONISE THE NON-UNIONISED.
* NO CONTRACT LABOUR ON PERMANENT JOBS.
* ENSURE MINIMUM WAGE OF (SAME) INDUSTRY TO CONTRACT
WORKERS.
* EQUAL WAGE FOR EQUAL WORK.
* BONUS TO ALL.
* BONUS TO ALL.
* ORGANISE STRUGGLES-CONDUCT SOLIDARITY PROGRAMMES
* NO DISCRIMINATION TO WOMAN WORKERS.
* ENSURE SPECIAL SAFEGUARDS TO WOMAN WORKERS.
* AWAKE, ARISE, ORGANISE, AGITATE.
~~~~~~~~~~~~~~~~~~~
ANNEXURE-I
WAGE LEVELS: SOME
EXAMPLES
Karnataka, as notified by the Govt.
WAGES PER DAY |
WAGES PER MONTH |
|||||
Particulars |
Basic Wages |
DA |
Total |
Basic Wages |
DA |
Total |
Zone I |
||||||
Highly Skilled |
117.30 |
4.81 |
122.11 |
3049.80 |
124.95 |
3174.75 |
Skilled |
108.30 |
4.81 |
113.11 |
2815.80 |
124.95 |
2940.75 |
Semi-Skilled |
101.30 |
4.81 |
106.11 |
2633.80 |
124.95 |
2758.75 |
Unskilled |
99.30 |
4.81 |
104.11 |
2581.80 |
124.95 |
2706.75 |
Zone II |
||||||
Highly Skilled |
115.30 |
4.81 |
120.11 |
2997.80 |
124.95 |
3122.75 |
Skilled |
105.30 |
4.81 |
110.11 |
2737.80 |
124.95 |
2862.75 |
Semi-Skilled |
98.30 |
4.81 |
103.11 |
2555.80 |
124.95 |
2680.75 |
Unskilled |
98.30 |
4.81 |
103.11 |
2555.80 |
124.95 |
2680.75 |
Zone III |
||||||
Highly Skilled |
113.30 |
4.81 |
118.11 |
2945.80 |
124.95 |
3070.75 |
Skilled |
101.30 |
4.81 |
106.11 |
2633.80 |
124.95 |
2758.75 |
Semi-Skilled |
97.30 |
4.81 |
102.11 |
2529.80 |
124.95 |
2654.75 |
Unskilled |
96.30 |
4.81 |
101.11 |
2503.80 |
124.95 |
2628.75 |
Zone – I : All City Corporations Zone – II: All the District Headquarters and other Towns with population of 1 Lakh & above. Zone – IIII: All other areas in the State not covered by Zone -I and Zone – II V.D.A. : All Category of employees: @ 3.5 paise per point per day over and above 1513 points. Note: The daily rate of wages and VDA of different categories of
employees are computed by dividing the total monthly wage by 26. |
||||||
ANNEXURE-I(A)
Minimum Wages from 01.04.2007 - Tamil Nadu:
Employment in General Engineering & Fabrication Industry:
Particulars |
Basic |
DA |
Total |
|
Zone ‘A’ |
||||
Skilled |
1599.00 |
1684.80 |
3283.80 |
|
Semiskilled Grade I |
1495.00 |
1684.80 |
3179.80 |
|
Semiskilled Grade II |
1404.00 |
1684.80 |
3088.80 |
|
Unskilled |
1287.00 |
1684.00 |
2971.80 |
|
Zone ‘B’ |
||||
Skilled |
1508.00 |
1684.80 |
3192.80 |
|
Semiskilled Grade I |
1378.00 |
1684.80 |
3062.80 |
|
Semiskilled Grade II |
1352.00 |
1684.80 |
3036.80 |
|
Unskilled |
1222.00 |
1684.80 |
2906.80 |
|
Zone ‘A’ : District Headquarters, Corporations,
Municipalities. Zone ’B’: Other places. |
||||
ANNEXURE I (B)
West Bengal – Two recent settlements are enclosed:
Settlement between Braithwait Shramik Karmachari Union, affiliated
to AITUC and other unions and BRAITHWAIT & CO. LTD.
• Settlement signed on 27-06-2006
• Duration of settlement from 1-2-2000 to 31-1-2008
Scale of Pay
Starting salary for unskilled, semi-skilled and Highskilled is Rs. 3,350/-
Rs. 2,385/-, Rs. 3425/-, and Rs. 3,470/- respectively.
Rs. 2,385/-, Rs. 3425/-, and Rs. 3,470/- respectively.
Fitment
Fitment is calculated by adding basic on 31-1-2000plus 3% of basic on 31-1-2000 plus DA at AICP at 1708.
Dearness Allowance
Percentage DA pattern is introduced from 1-4-2005
House Rent Allowance
House Rent Allowance will be 25% of Basic Pay against existing 5% of Basic and DA.
House Rent Allowance
House Rent Allowance will be 25% of Basic Pay against existing 5% of Basic and DA.
City Compensatory Allowance
City Compensatory Allowance will be Rs. 100/- per month
Leave Travel Allowance
LTA will be Rs. 500 per month
Leave Travel Allowance
LTA will be Rs. 500 per month
Medical Facilities
Employees not covered under ESIC will be paid Rs. 200/- per month against
Rs. 100/- per month.
Night Shift and Hard Task Allowance
Night Shift and Hard Task allowance will be Re. 1/- and Rs. 3/- per working day.
Long Service Reward
Long Service reward will be Rs. 500/- to Rs. 3,000/- as per various period.
Night Shift and Hard Task Allowance
Night Shift and Hard Task allowance will be Re. 1/- and Rs. 3/- per working day.
Long Service Reward
Long Service reward will be Rs. 500/- to Rs. 3,000/- as per various period.
ANNEXURE-I (C)
Settlement between
TRACTOR INDIA LIMITED EMPLOYEES ASSOCIATION
affiliated to AITUC and Management of
TIL
• Settlement signed on 12-9-06
• Duration of settlement is from 1-1-06 to 31-12-09
Basic Pay
Increase in Basic Pay is Rs. 500/- per month. Additionally Rs. 1600/- from existing DA is merged with Basic Pay.
Scale of pay for lowest grade is Rs. 3,000/- to Rs. 4,475/- and for highest grade is Rs. 4,055/- to Rs. 8,171/- respectively.
Scale of pay for lowest grade is Rs. 3,000/- to Rs. 4,475/- and for highest grade is Rs. 4,055/- to Rs. 8,171/- respectively.
Dearness Allowance
The present rate of neutralisation of Rs. 2.10 per CPI at Kolkata (1960=100) will continue.
Leave Travel Assistance
LTA is increased to Rs. 2,600/- per year against Rs. 2,300/- on the last agreement
House Rent Allowance
House Rent allowance has been increased to @15% at (Basic+DA+Special allowance, if any) against 10% in the last agreement.
Tiffin Allowance
Tiffin allowance has been increased to Rs. 26/- per attendance of full
working day and Rs.16/- per half working day against Rs. 20/- and Rs. 10/-
respectively in the last agreement.
Conveyance Allowance
Conveyance allowance has been increased to Rs. 14/- per day of attendance
against Rs. 9/- per day in the last agreement.
Attendance Allowance
Attendance allowance has been increased to Rs.110/- per month against Rs.
85/- per month in the last agreement
Gas and Electricity Allowance
Gas and Electricity allowance has been increased to Rs. 220/- per month
against existing Rs. 100/-
Outstation Allowance
Outstation allowance has been increased to Rs. 420/-, Rs. 450/- and
Rs.480/- per day as per different grade of pay against existing Rs. 350/-, Rs.
375/- and Rs. 400/- respectively.
Mediclaim Hospitalisation Insurance
All the workmen will be covered under Mediclaim Hospitalisation Insurance
of Rs. 50,000/- for family of four per year. Each employee will contribute
Rs.16/- per month. Earlier coverage was Rs. 25,000/-.
ANNEXURE-III
Ranchi (Jharkhand) – Permanent & Contract Labour:
Sl.No. |
Units |
No. of Employees Permanent Contract |
Product |
|
1. |
HEC (Public Sector) |
8500 |
5000 |
All types of machine for starting new Industries and working
Industries |
2. |
Marine Diesel Eng.(Public sector) |
200 |
3000 |
Engine of Ships |
3. |
Shri Ram Ball Bearing and Needle Bearing |
300 |
200 |
Ball Bearing Needle Bearing |
4. |
Usha Martin (Birla Group) |
600 |
1000 |
Wire rope |
Jamshedpur (Jharkhand): (Permanent & Contract Labour):
Sl.No. |
Unit |
No. of Employees Permanent Contract |
Product |
|
1. |
Tata Motors |
6000 |
10000 |
300 trucks per day |
2. |
TELCON(Joint unit of Tata and Italy |
0900 |
1500 |
Excacabator, Dozer, Dumper, Poklane |
3. |
Tata AXEL (Tata, USA) |
0900 |
15000 |
Truck’s Axel |
4. |
Tata Comins. (Tata USA) |
0500 |
800 |
Engine of Trucks |
5. |
Indian Wire products (Inder Singh) |
1000 |
700 |
Screws Nails Wire ropes |
6. |
JEMCO (Inder Singh) |
500 |
150 |
Die, Tools |
7. |
Agrico (Tata Groups) |
500 |
300 |
Spade, etc. |
8. |
TEMCON (Tata Groups) |
250 |
300 |
Bearing |
ANNEXURE-IV
Car output expected to be doubled in India:
India – World’s Car Factory?
Sl.No. |
Companies |
Production Capacity
Current By 2010 |
|
01 |
Maruti |
6,00,000 |
10,00,000 |
02. |
Hyundai |
3,00,000 |
6,00,000 |
03. |
Tata Motors |
2,25,000 |
6,00,000* |
04. |
Mahindra |
50,000 |
1,50,000 |
05. |
Honda |
50,000 |
1,50,000 |
06. |
Toyota |
60,000 |
2,60,000 |
07. |
Ford |
60,000 |
80,000 |
08. |
GM |
80,000 |
2,20,000 |
09. |
Skoda |
30,000 |
50,000 |
10. |
Daimler Chrysler |
3,000 |
3,000 |
11. |
Hindustan Motors |
50,000 |
50,000 |
12. |
Fiat |
60,000 |
60,000 |
Total: |
15,68,000 |
32,23,000 |
|
*including the capacity of the new joint venture with Fiat at
Ranjangaon. |
|||