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Saturday, 19 April 2014 03:57
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Wanting 500 Bajaj shares @R10 apiece takes the cake

Of all the demands made by the Bajaj Auto union at Chakan, the most preposterous has to be the one demanding workers be given 500 shares each at R10 apiece (market value: R2,013 per share). The union also wants workers’ children to be educated using the company’s CSR funds and, to appear loyal to the company ethos perhaps, there is a demand for a 30-foot statue of the group’s founder, Jamnalal Bajaj. The union had made a similar demand for shares last June and, at that time, production was disrupted for close to 50 days. Given that Bajaj Auto has offered to raise wages by R9,000-10,000 per month at a time when the economic environment is difficult and the industry is going through a rough patch, the union is being irresponsible in, once again, stalling production—Centre for Monitoring Indian Economy data shows that auto sector employee costs rose 3.3 times over the decade compared with 3.1 times for the overall manufacturing sector.

Meanwhile, the Bombay High Court will hear the management’s petition asking it to declare the termination of the wage agreement ‘unlawful’. Litigation can’t be good for anyone and workers need to recognise that while they may get away with their demands in the near-term, unreasonable ones will only prompt managements to rely more on automation and organise manufacturing facilities in a manner that production can be shifted from one location to another. Some of this is already happening; if Maruti’s production has risen 3.4 times over the last decade or so, the number of workers has gone up by just 2.5 times. Between FY08 and FY12, production at Bajaj Auto was up 76% but the number of employees dropped by a tenth. To be sure, much of this can be attributed to improvements in productivity. But the fact is that the level of employment being generated for every million rupees of manufacturing had dropped dramatically from 12 in FY05 to around seven today. That should be reason enough for union leaders to behave more responsibly.


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