Workers group's newsletter from India's special export zone, with workplace reports from the area and detailed coverage of the huge strikes of auto workers in October-November 2009.
GurgaonWorkersNews no.21 – November 2009
November 4, 2009
(Automobile Workers Strike – 20th of October 2009)
Gurgaon Workers News – Newsletter 21 (November 2009)
Gurgaon in Haryana is presented as the shining India, a symbol of capitalist success promising a better life for everyone behind the gateway of development. At a first glance the office towers and shopping malls reflect this chimera and even the facades of the garment factories look like three star hotels. Behind the facade, behind the factory walls and in the side streets of the industrial areas thousands of workers keep the rat-race going, producing cars and scooters for the middle-classes which end up in the traffic jam on the new highway between Delhi and Gurgaon. Thousands of young middle class people lose time, energy and academic aspirations on night-shifts in call centres, selling loan schemes to working-class people in the US or pre-paid electricity schemes to the poor in the UK. Next door, thousands of rural-migrant workers uprooted by the agrarian crisis stitch and sew for export, competing with their angry brothers and sisters in Bangladesh or Vietnam. And the rat-race will not stop; on the outskirts of Gurgaon, Asia’s biggest Special Economic Zone is in the making. The following newsletter documents some of the developments in and around this miserable boom region. If you want to know more about working and struggling in Gurgaon, if you want more info about or even contribute to this project, please do so via:
In the November 2009 issue you can find:
1) Proletarian Experiences -
Daily life stories and reports from a workers’ perspective
*** 19 Short Workers’ Reports from Gurgaon Factories -
Workers’ told these reports to Faridabad Majdoor Samachar (Faridabad Workers’ News) in July and August 2009. The reports were distributed in the monthly free newspaper in the Delhi industrial belt. Most of the reports are from textile export factories, two are from automobile workers.
*** Summary of Study on Garment Workers’ Conditions in Gurgaon -
Given the huge masses of workers and their palpable anger it seems only logical that NGOs and other institutions are interested in what’s happening. We summarise a recent study by “Society for Labour and Development”.
*** White Collar Blues -
Short reports of workers employed by the post, in public transport, in the education sector and by the HDFC Bank in Gurgaon. We can see the massive casualisation of public and white collar jobs – and the proletarian post-graduate discontent.
2) Collective Action -
Reports on proletarian struggles in the area
*** The Youth is Getting Restless / Hidden Struggles in Okhlas Textile Factories, Part 2 -
In the last newsletter we have reported about physical conflicts and skilled workers’ wildcat strikes at textile factories of Wearwell (Marks and Spencers) and Unistyle. The unrest continued during August and September 2009, but it started to run dry in the channels of labour law and union representation…
*** Automobile Unrest and Jam in Gurgaon, Five Points related to the Rico Strike in October 2009 -
* Rust belts, rural anger, new workers’ movement around the car?
Within and against the car industry run the main front-lines of class struggle in India: Post-colonial permanent workers at Hind Motors in old industrial centre Kolkata are down-sized and Hind Motors factory land is taken for real estate speculation; while Tata and CPI(M) fight against rural proletarians and farmers to grab green-field land for a ‘peoples’ car’ plant in nearby Singur; and while rural-migrant temp workers at the world’s largest car parts manufacturer Delphi in the new industrial hub Gurgaon are striking wild against the pact of companies’ and permanent workers’ union. In the classical left conception and form of organisation these different proletarian figures were either played off against each other or the left tried to disempower them as productive collectives and ‘united’ them as mere members in their mass organisations. We hope that within these movements, in the situation of global crisis and through the mobile character of both industry and work-force a new form of revolutionary organising will develop.
* Rico and beyond: One month of automobile unrest in Gurgaon
Since end of September 2009 a strike / lock-out at automobile supplier Rico created or rather expressed some general trouble in the industrial cluster. Honda threatened to re-locate production to other parts of India, the struggle broadened and was taken up by the union/political sphere on the back of a killed worker. On the other side of the globe in Canada Ford had to close down production due to lacking Rico parts – and, maybe influenced by wage dispute in India, Ford workers in the north voted against a management-union deal to cut wages for ’saving jobs’. A chronology of news articles and more questions than answers.
* What crisis?
In what phase of the Indian automobile industry did the Gurgaon strike take place? Short glimpse at the development of the automobile industry in India since the slump in October 2008. Obviously the economic stimulus packages for European car buyers have had their impact in India – in the first half of 2009 the passenger car export went up by 36 per cent compared to the previous year. This shows the global character of the automobile industry. Another level of globalisation intertwines production directly – hoping that the ‘low wages’ of the south can be imported with the manufactured parts into the assembly plants of the north.
* The terrific jam
The crisis of the automobile industry – and therefore of capitalism as we know it – is not only the crisis of profits or the physical and mental crisis of those who have to produce them, but also the crisis of the car as a terribly destructive means of transport. We summarise two recent articles on traffic jams and road accidents in Gurgaon.
* Video-Interviews with Gurgaon Automobile Workers
As part of a workers’ documentary about life and struggle in Delhi’s industrial belt friends interviewed various automobile workers in the area: workers in Faridabad slum-workshops producing door hinges for Maruti Suzuki, Tata Nano and others; a young skilled CNC operator in a car parts manufacturing company; three suspended temporary workers at Hero Honda plant; and a former Maruti Suzuki worker sacked during the lock-out in 2000.
3) According to Plan -
General information on the development of the region or on certain company policies
*** From Cluster to Class War -
Summary of study “Gurgaon and Faridabad – An Exercise in Contrasts” by Bibek Debroy and Laveesh Bhandari. Gurgaon and Faridabad are two neighbouring towns in Delhi’s industrial belt. Their industrialisation was interdependent. A proper analysis of ‘clusters’ would have to look at the main contradiction of capital – capital thrives on the productivity of workers’ mass concentration and at the same time it is threatened by workers’ collective anger becoming more forceful and creative through proletarian proximity. The studies’ summary might serve as another little piece in the jigsaw of understanding the process from cluster to class war.
*** Local War on terror and the Terror of the Labour Market -
Two recent news items reflecting the fear of the ruling class towards the ‘unruly poor’. In the first news article the ‘unruly poor’ appear in the unspecific figure of terrorism with a hint at undocumented labour migrants. The article refers to a report published by yet another NGO about lacking police force and fire tenders – Gurgaon is not prepared for counter-insurgency. In the second article we can see how the ruling class tries to channel the ‘terror’ of the labour market into inter-working-class tension by demanding job reservation for a specific group, in this case setting the local proletarians against the migrant ones.
4) About the Project -
Updates on Gurgaon Workers News
*** Glossary -
Updated version of the Glossary: things that you always wanted to know, but could never be bothered to google. Now even in alphabetical order.
1) Proletarian Experiences -
Daily life stories and reports from a workers’ perspective
*** Short Workers’ Reports from Gurgaon Factories -
Workers’ told these reports to Faridabad Majdoor Samachar (Faridabad Workers’ News) in July and August 2009. The reports were distributed via the monthly free newspaper in the Delhi industrial belt.
Alankar Creation Worker
(Plot 410, Udyog Vihar Phase 3)
The 60 workers who do thread cutting work (both male and female) get 2,500 Rs per month, neither ESI nor PF. The work pressure on the tailors is very high, they have to ask for permission to go to the toilet and their request is often refused. The general manager swears at workers, sometimes he hits workers, too. Monthly 40 to 50 hours wage is cut from payment – they say that it is due to not meeting the production target. We work from 9 am till 9:30 pm, sometimes till 2 am. Over-time is paid at single rate, Sundays are paid with 50 per cent incentive.
(Plot 86, Udyog Vihar Phase 1)
Lifestyle Retailing employs 150 workers, mainly sampling tailors, through three contractors. The main contractor does not employ anyone for more than five years – they would sack you before that without giving you any compensation. The other contractor sacked a guy after more than five years, but they paid only 15 days wages compensation for each year of employment.
Chintoo Creation Worker
(Plot 295, Udyog Vihar Phase 2)
Us 500 workers start shift at 8 am and finish at 2 am. On Sundays we work from 8 am till 8 pm. A lot of workers fall ill due to being overworked. If you are two minutes late they cut two hours from your wage. If you leave the job or if you are fired they keep 20 to 25 days of your wage. If you bother them enough they will give you some money and keep the rest saying it is because you have “created damage to the company”. Yesterday, on 20th of July 2009, a woman worker came to the factory to ask for her outstanding wage. She was told that she would not be paid due to having “damaged a textile piece” and in the personnel department they threatened her physically. They pay 3,600 Rs to the helpers, but they show 4,200 Rs wage on the documents. If you complain they say that you can quit the job. ESI and PF money is cut as if we were paid 4,200 Rs.
Eastern Medikit Worker
(Udyog Vihar Phase 1)
Us casual workers work 12-hours shifts, over-time is paid less than single rate: we get 13 to 14 Rs per hour. Wages are paid with delay.
Gaurav International Worker
(Plot 198, Udyog Vihar Phase 1)
Working times are from 9 am till 11 pm – the thread cutting and packing department start as soon as 8 am. The management locks the gates in order to enforce over-time. The female workers have a lot of stress because of that. In the factory 600 female and 1,000 male workers are employed – the male workers are forced to work till 2 am. The company won’t even give you a cup of tea during the 14 to 17 hours of work. They swear at the us, they swear at the female workers, too. An official inspection was announced to visit the factory on 28th of July, so the personnel manager told us to say that we do 10 to 12 hours over-time per month… – when we actually do more than 150 hours. The tailoring of velvet (Makhmal) produces a lot of dust, this is why until last year they gave us free sugar molasses, but this has stopped now. Only on the day of the inspection on 28th of July they distributed the sugar molasses again. There are only three machines to punch in and out – so it takes 15 minutes to enter or leave the factory. If you take two days off they will take the company pass away from you. In the Gaurav International factory on plot 208 (Udyog Vihar Phase 1) and on plot 506 (Udyog Vihar Phase 3) the bosses swear at people a lot, too.
(Plot 403, Udyog Vihar Phase 3)
In the factory workers are employed on two 12-hours shifts – producing and colouring labels and threads for tailoring. We work on Sundays, too. We work 125 to 150 hours of over-time, but they pay only for 60 to 70 hours – and only at single rate. If you complain they swear at you. The newly hired helpers get 2,200 Rs, the older helpers get 2,500 Rs per month, but they are forced to sign that they receive 3,840 Rs. An operator works two machines, they get 2,500 Rs to 3,000 Rs, but they have to sign for 4,100 Rs. If you take one day off they cut two days from your wages. Only 200 out of 500 workers get ESI and PF.
Kailash Ribbon Factory – Krf Ltd
C 111, Maya Puri, New Delhi, Delhi 110064, India
There are company factories in Gurgaon and nearby Manesar. More than 1,000 workers produce leather bags and wallets. In the factory on Plot 37 in Manesar Sector 4 wages are delayed – the June wages have not been paid till now, 21st of July 2009. We start working at 9 am and normally finish at 11 pm, often we are told to work till 2 am. Overtime is paid at double rate, but 50 hours get embezzled each month.
Logwell Forge Worker
(Plot 116, Udyog Vihar Phase 1)
The factory runs two 12-hours shifts, on Sundays, too. Over-time is paid at single rate. Logwell produces metal parts for the car and railway industry.
Madhu Chawla Design Worker
(Plot 783, Udyog Vihar Phase 5)
There used to be 300 workers employed, now there are 50 of us left. The company does not pay the minimum wage: helpers get 2,800 to 3,000 Rs and tailors get 140 Rs for an 8-hours shift.
(Plot 200/2001, Udyog Vihar Phase 1)
When we work half night-shifts work starts at 8:30 am and ends at 2 am. In July the factory ran at all four Sundays. Sometimes we work full nights, meaning from 8:30 am till 6 am. The company only gives 20 Rs for food. The company produces stuff for GAP. The wages for over-time are paid delayed and 500 to 1,000 Rs is cut. The same happens at Modelama factories on plot 105 and 204 in Udyog Vihar Phase 1. Since August work starts at 9:30 am again … one guy worked ten days non-stop from 9:30 am till 6 am. Because he tied a waste piece of cloth around his head he was accused of theft, he was sacked and not paid for his work.
Niti Clothing Worker
(Plot 218, Udyog Vihar Phase 1)
Us 12 housekeeping workers work from 7:30 am till 6 pm. We are not only told to clean the premises, we are also asked to do production work. And there is a lot of verbal abuse going on.
Premium Moulding Worker
(Plot 185, Udyog Vihar Phase 1)
We work 12-hours shifts, on Sundays we work 8 hours. Over-time is paid only 6 Rs per hour. The company produces steering wheels for the car industry. The helpers get 3,000 to 3,500 Rs per month.
Richa Global Worker
(Plot 232, Udyog Vihar Phase 1)
There are no fixed working-hours in the factory. On the documents and to officials they say that shift ends at 5:30 pm, but often we are forced to work from 9 am till 10-11-12 at night. They swear at us a lot.
S&R Export Worker
(Plot 298, Udyog Vihar Phase 2)
They give us the minimum wage, but instead of 8 hours we have to work 11 hours daily for it. The official labour inspectors who visit the factory are given a bribe and they leave again.
Company Phone: 0124 – 2341608
Sikal Export Worker
(Plot 775, Udyog Vihar Phase 5)
The helpers receive between 2,700 Rs and 3,000 Rs. The tailors work on piece-rate, but the rate is not disclosed before people start working. The toilets are only opened from 11 to 11.15, then from 1 to 1:30 and from 4 to 4.15 – there is a lot of trouble because of that.
(Plot 166, Udyog Vihar Phase 1)
The wages are paid delayed, the July wages we got on 20th of August. About 400 to 500 Rs of over-time payment gets embezzled each month. If you leave the job they won’t pay you half the money they owe you. If you complain they swear at you. They treat the female workers badly, too. The thread cutting workers get only 2,500 Rs, everyone else gets the minimum wage. Money for ESI and PF is cut from these wages, but when you leave the job they won’t fill in the PF fund form. Only the admin workers and supervisors are directly hired, 300 workers are hired through contractors. There is no canteen, there are problems regarding the drinking water and there is only one toilet for 300 workers.
Company Phone: 91-124-2343146
(Plot 140, Udyog Vihar Phase 1)
There are 300 workers hired through contractors in the factory. They have not been paid their June wages yet, today is the 21st of July. The helpers get only 2,800 Rs per month.
Rajouri Garden, New Delhi,
+91 11 65339572
Vishesh Overseas Worker
(Plot 430, Udyog Vihar Phase 4)
In the huge factory we work 100 hours of over-time per month – only 50 hours are paid at double rate. If you leave the job they give you loads of trouble to get your outstanding wages. Those who left in June or July haven’t received their payments yet, on 29th of August 2009.
(Plot 211, Udyog Vihar Phase 1)
Us 20 women are employed through two different contractors – we cut threads. We get 95 Rs for an 8-hours shift, no ESI, no PF. We normally work 10 hours per day, over-time is paid single rate. On 10th of July we were all sacked – they told us that there was no more work. Our June wages and the wages for the ten days in July were not paid, even after having asked for them many times. We went to the factory individually and they sent us back. On 20th of July we gathered and went to ask for our wages together. Today, on 21st of July they told us to come to the factory to get our wages.
*** Summary of Report by “Society for Labour and Development” on Textile Workers” Conditions in Gurgaon -
The NGO “Society for Labour and Development” has composed a study on garment workers’ conditions for a Dutch NGO engaged in an international clean clothes campaign and published it in June 2009. We have summarised the study – if you are interested in the complete study drop us a note or contact SLD directly, see web-link below.
The study focuses on five garment export factories, employing around 1,000 workers on average, out of which only 10 to 15 per cent are women – reflecting the generally low share of female wage labour in Northern India. Most of the workers are migrants from various states, about half of the workers live in Delhi area without their families – the families are left in the village or town of origin. About 80 per cent have no formal work-contracts.
The following quote is interesting regarding the current trend to undermine skilled tailors like the struggling workers at Unistyle and Wearwell (see this newsletter) by introduction of the ‘chain system’, meaning a more minute division of labour:
“Only 46% workers work on the basis of salary. 54% of workers work on piece rate basis. There are two types of piece rate work, one is called ‘full piece rate’ and another one ‘part rate’. Under full piece rate system (…) the rate depends on the fabric and the style. For instance, for a simple cotton, half sleeve shirt, a worker will get Rs.15 and worker has to make 8-10 shirts a day. Under ‘part rate’, a worker has to make, collar, cuffs, pocket, plate etc. For that the normal rate is Rs. 4 – 5 a piece and the normal target would be 30-35 pieces a day.”
The average wage is not enough to survive on, most workers are in debts. Although 6,500 Rs monthly “income” is relatively high compared to the average workers’ wage in the region, it is actually not spent on any major consumer goods:
“Workers monthly earning on an average including overtime is Rs. 4585.5 and on an average of 6 persons live on this wage. As there is an average gap of Rs 1915 between the average monthly expenditure and average monthly income, these workers are always in debts. 41% of this goes to food, 15% goes to housing, 8% goes to healthcare and education, 2% goes to entertainment, 3% goes to clothes and other necessities, 18% is sent home, 10% is other expenses, 3% is spent on transportation. 10.44% of total monthly income is spent on other expenses which includes repayment of loans, phone charge, spending on festivals, friends’ and relatives’ marriage, child birth etc.”
*** White Collar Blues -
Short reports of workers employed by the post office, in public transport and by the HDFC Bank in Gurgaon – distributed in indi in Faridabad Majdoor Samachar.
Postal Department / ED Worker
The government of India has decided that 300,000 workers who work in the postal services are now employed in a so-called Extra Department (ED). All of us ED workers are excluded from the wage rise for the public sector workers declared by the 6th Pay Commission. We earn about 3,200 to 3,300 Rs per month. Before the general elections we were reassured that we will be accepted as part of the postal services and that our wages will be increased. The elections are over, the government has settled down, but our situation is still the same.
Haryana Roadways Worker
In June and July 2008 – through the selection board – 810 drivers and 1,200 conductors were hired for the State Transport. The newly hired were categorised as SPL, the drivers’ wages are 4,200 Rs and the conductors get 3,900 Rs. Officially the wages for public drivers and conductors after the 6th Pay Commission is around 15,000 Rs. On 13th of July 2009 the regular (public) drivers and conductors organisations put forward their demands, including the demand for accepting the SPL drivers and conductors as regular employees. The government refused this demand. In response, on 13th of August 2009 from 12 am till 2 pm all buses of the Haryana Roadways stood still. The strike was called by the permanent workers union, but us SPL workers took part in it.
(Guru Dronacharya Public School, Manoharpur, Jind Jila)
The school bus drivers are made to sign that they get the minimum wage, but actually the conductors are paid 1,500 to 1,800 and the drivers 2,000 to 2,500 Rs. You have to be on duty on Sundays, as well. Officially they say that you get PF, but when you leave the job they do not give you the PF fund money.
HDFC Bank Worker
(Branch: Mukhya Market, Sector 14, Gurgaon)
In the branch 100 workers are employed in the customer service for saving and other accounts. All these workers have either graduated or passed their MBA. They get 6,000 Rs wage and 2,500 Rs for transport costs – most workers drive motorcycles and share it with colleagues. The official working times are from 9:30 am till 5:30 pm, but after 5:30 pm there is an assessment and evaluating meeting where you get told off till about 9 or 10 pm. The bank does not pay any money for the overtime. The company fixes targets saying how many new customers you are supposed to win per day, but they are incredibly high, you can never meet them. The market crisis only increases the target trouble. The customers are often unfriendly, but you have to tolerate it. The HDFC workers get sworn at from all sides – and they also threaten you with the sack. You work under a lot of pressure.
2) Collective Action -
Reports on proletarian struggles in the area
*** The Youth is Getting Restless / Hidden Struggles in Okhlas Textile Factories, Part 2 -
In GurgaonWorkersNews no.20 we have reported about physical conflicts and skilled workers’ strikes at textile factories of Wearwell and Unistyle. The unrest continued during August and September 2009, but it started to run dry in the channels of labour law and union representation…
The factory is situated on plot B-51 in Okhla Phase 1. In the factory 200 workers are employed, only 10 by the company itself. In June 2009 the skilled workers laid down tools several times in order to force the company to pay higher piece rates – and they succeeded. On 23rd of July one of the two contractors started to pay a lower rate again – the workers refused to take the money and demanded the same pay as paid by the second contractor. At that point the production in the factory was low. In response to the contractor’s refusal 21 workers joined a union and complained at the labour department. The contractor offered a monthly wage of 5,500 Rs instead of the piece rate payment. The workers then showed some documents proving that they have been employed at Unistyle for more than three years – meaning that they would be entitled to permanent contracts as monthly paid wage workers at Unistyle. The question remained unresolved. The 21 workers went back to the factory, but due to lacking orders they sat around without work. The July wages were promised by 7th of August, then 17th of August, but not paid. Then a new order from Samsung arrived and the contractors told the workers to start working – the workers said that they want to be paid their July wages first. On these grounds the 21 workers were kicked out of the factory on 22nd of August 2009. The legal process at the labour department – initiated by the representative of these 21 workers – is still running…
Unistyle Company Address:
Rajouri Garden, New Delhi,
+91 11 65339572
The factories are situated on Plot B-134, on Plot D-21 and Plot D-17 in Okhla Phase 1. One of the main buyers of Wearwell is Marks and Spencer.
On the companies documents it says that 125 workers are employed in B-134 (all permanent), working from 9 am till 5:30 pm. Actually 400 workers are employed (most of them casual) from 9 am till 1 am. In order to control the current unrest in the factory management took four workers to the police station on 14th of July 2009 – accusing them of having beaten up company security guards. The police took a bribe from the workers and the issue seemed settled, but then they were put under pressure and told to hand in their notice. They refused. On 8th of August 2009 five permanent workers were stopped at the gate by management staff and refused access to the factory – again the workers would not sign their notice papers. Inside the factory 125 permanent workers started to complain about the management’s behaviour. In response 20 more workers were kicked out of the factory. The 25 workers joined the union IFTU and complained at the labour department – the company itself sent a letter to the labour department on 18th of August announcing that the 25 workers had “forcibly” left the factory on 8th of August. A union official – after having “fought” for re-instatement – advised the workers to take the redundancy payment and to hand in their notice. The five permanent workers who had been kicked out first refused to leave the job. The union official told them that they should let the others take their redundancy payment and that a higher sum will be negotiated for them afterwards. When the other 20 workers heard this they got rather angry. The legal process at the labour department is still running…
Factories D-17 and D-21
On 20th of July the company started to lay off casual workers in D-21 and D-17 saying that there is not enough work. When they were through with the casuals they started to lay off permanent workers. About 50 permanent workers then joined a union. On 1st of August 2009 the police came to the factory and tried to prevent workers from entering the factory. Workers went inside anyway, but when more police arrived they were kicked out. The company increased the redundancy payment by 2,500 Rs. Wearwell sacked workers in Okhla, but just opened a new factory in Faridabad…
*** Automobile Unrest and Jam in Gurgaon, Five points about the Rico Strike and beyond -
* Rust belts, rural anger, new workers’ movement around the car?
In the following we want to portray three proletarian struggles which took place at the same time in 2007: the final attack on permanent workers at Hind Motors in Kolkata; the rural movement against the Tata car plant in Singur; the wildcat strike by temp workers at Delphi in Gurgaon. They all emerged in and against the car industry – but the protagonists of these conflicts were very different proletarian figures, each emerging from or dissolving with a certain phase of capitalist development in India, each phase fuelled by and having to channel the proletarian aspirations of its moment. We can say that around these three car plants the Indian working class fought with itself, the three disputes represent the main front-lines of class struggle in India. In the classical left conception and form of organisation these different proletarian figures were either played off against each other or the left tried to disempower them as productive collectives and ‘united’ them as mere members in their mass organisations. We hope that within these movements, in the situation of global crisis and through the mobile character of both industry and work-force a new form of revolutionary organising will develop.
Hind Motors factory – Flexibilisation and real estate bubble decomposing the post-colonial workers’ strong-hold
Hind Motors in Kolkata is one of India’s oldest car plants, a symbol of the early phases of 5-years-plan industrialisation of the post-colonial era, offering permanent workers identity to its employees. During the mid-1980s the passenger car division got under increasing pressure from upcoming car manufacturers like Maruti Suzuki, with the financial crash of 1991 and the subsequent increase in automobile investments Hind Motors passed the pressure on to the permanent workers. In 1998 there were still 10,000 workers employed, by 2007 this number came down to 4,100. In 2007 unions started a strike against wage freezes – the West-Bengal state government party CPI(M) tried to use its affiliated union CITU to control the strike. After the strike Hind Motors management issued a VRS (Voluntary Retirement Scheme), basically trying to force workers to resign. The CITU leader-ship in the plant took the VRS and suggested to the workers to follow their example. By 2009 the number of workers came down to 2,200. Parts of the factory – for example the outsourced forging department CI Forge – now run as flexible producers for various international companies. In summer 2009 Hindustan Motors started to import knocked-down kits of mini trucks from Chinese company Shandong Shifeng to assemble them with a small amount of workers for further export to Africa. The main business after the down-sizing of the factory is real estate: under the command of the CPI(M) industrial land is sold to private developers in order to convert it into real estate assets – an officially illegal act.
Singur Tata factory – Rural proletarian struggle against a greenfield factory in the search for an alternative to ‘development’
While factory land in Kolkata is turned into posh appartment blocks, some kilometres away rural proletarians and farmers struggle against the attempt of Tata and the West-Bengal government to turn agrarian land into greenfields for the Tata Nano car factory. Tata wanted to open a factory in ‘Communist-ruled’ West-Bengal, but not in the old industrial centres like Kolkata, spoiled by generations of workers’ struggle. The struggle movement against the car plant was not homogeneous: some farmers were interested in higher compensations for their land, some smaller peasants wanted to keep their land as a means of subsistence in addition to wage work, some rural landless felt that – while jobs in the villages and on the fields might be paid half the amount – the chances to get a job on construction of or in the car plant itself were low. Most of the left tried to gloss over these divisions either by using a ‘village community’-ideology or traditional Maoist concepts of ‘peasantry’. The movement questioned ‘industrial development’ from a proletarian perspective: how many jobs are created and how many livelihoods are destroyed? does the production of a passenger car, a product for a minoritarian middle-class, justify the destruction of a more or less natural environment? Through the movement ‘development’ was transformed from ‘natural law’ into a hot-spot of social debate. The movement against Tata was high jacked by various political parties, ranging from BJP to Congress to Maoists, united merely by the will for political influence. The CPI(M) government used this fact as a pretext to mobilise first Stalinist ideology of development – urban and industrial progress against the back-ward rural Kulaks – and then Stalinist terror. In early 2007 police force and para-military CPI(M) cadres massacred several villagers in Singur. The movement continued and might become the last nail in the coffin of CPI(M)’s long years of capitalist state power. Tata decided to produce the Nano in Sanand in Gujarat. The crisis slump in end of 2008 endangered the boom of the Indian ‘people’s car’ – current production level is 2,500 Nano’s per month. Up to now the promised well-paid jobs for the landless and the promised high compensation payments for the land-owning peasants broke up and divided the rural proletarian struggles. The current crisis shakes up some illusions and false promises.
(for more on Singur see: www.sanhati.com)
Delphi Gurgaon – A new generation of factory workers in the emerging Indian industrial clusters
While rural proletarians in Singur, West-Bengal fight about the question of ‘automobile development’ a young factory workers’ generation in one of the new industrial clusters engage in a wildcat-strike at world’s biggest car part manufacturer Delphi. Gurgaon, like Chennai or Pune developed into automobile hubs in the 1980s and 1990s. Like the striking workers at Delphi most of the new workers are migrants from rural parts, many of them from West-Bengal – may be even from Singur area. They arrive in the shining new urban areas of development with hopes – and they are confronted with a draconic factory regime and much lower living standards than they had hoped for. Unlike the earlier generation of workers like those at Hind Motors these workers have no illusions to get a permanent contract. At Delphi the number of permanent workers came down from 2,000 to 250. The 2,500 temp workers are not represented by the classical institutions of the workers’ movement, they often change jobs between sectors, they are mobile and restless. At Delphi the permanent workers’ union tried to get the temps back to work – afraid to lose their permanent jobs if the production would continue to be put on hold. The temp workers drop their job or lose it frequently, they go back and forth between the rural parts and the urban. They are in touch with the world, the IT temples and call centres in their industrial areas. They are part of the global automobile supply chain – see impact of current strike at Rico – but they hate the industrial world as much as they are eager to escape from the villages.
* One month of automobile unrest in Gurgaon
Three main disputes about recognition of unions (Auto Rico and Sunbeam) and a three-year wage agreement (Honda HMSI) expressed some of the unrest in Gurgaon, India’s main automobile cluster. The disputes lasted for more than a month between mid-September and end of October 2009. After a Rico worker was killed the CP affiliated AITUC union called for one-day-strike – allegedly 80,000 to 100,000 car workers did not work on 20th of October 2009. Last but not least, the dispute at Rico caused factory closures at GM and Ford in the US due to lack of parts.
The main political significance is the international character and set-up of the unrest in Gurgaon. Workers in India in a dispute for higher wages cause car plants in the US to come to a standstill. The workers at Ford and GM are currently under pressure to agree on wage cuts in return for dubious job guarantees. Their union UAW has already signed a deal, but the workers are unsure if to confirm it. In this moment a combative signal from the ‘low-wage-end’ of the global supply chain might help to reassure the US workers in their collectivity. That they cannot rely on their representatives in order to form a global proletarian alliance is demonstrated by the way in which the Rico dispute in India is presented by the UAW. “We are experiencing the effects of outsourced suppliers, and we hope they would be able to resume production as quickly as possible so we can in turn resume production”. Brian Fredline, president of the United Auto Union Local 602, representing 2,700 workers at General Motors plant in Delta Township, Michigan who were sent home due to lack of parts manufactured by Rico. We try to provide a short glimpse at the international context of the automobile industry in the part ‘What crisis?’ – see below.
We cannot say much about the internal dynamics of these disputes. There have been various conflicts at automobile companies in the last years – see summary below. In most cases a wider unrest amongst permanent and temp workers had simmered long before the official dispute started. The urge to establish a union or long-term wage agreements often resulted in: firstly, dividing the work force (mainly permanent workers, who represent only 20 per cent of the work-force, are attached to the union and long-term contract sphere); and secondly, to channel the conflict into open, legal and therefore controllable paths. There is also a long regional tradition of industrial disputes during which lock-outs / strikes are used to re-structure the work-force – given the current global ups and downs of the car industry this aspect of ‘engineered conflicts’ has to be taken into account when analysing the Rico dispute.
Two noteworthy details about the outcome of the current strikes: a public debate in the main stream media about the unstable situation due to such a large share of temp workers employed; and a rather empty threat of Honda HMSI management to shut-down the plant in Gurgaon and re-open it somewhere else if the political class should not be able to guarantee industrial peace in the region. The first point hints at a true core of unrest – at the same time the current disputes can be seen as a proof that the division in permanent (unionised) and temporary workers still works well. The second point is an arbitrary one. In summer 2005 Honda management issued a similar threat and the political class reacted by organising a police massacre on several hundred workers. In itself it is an empty threat to re-locate the factory from a global low-wage region like Gurgaon given that Honda HMSI relies on a huge web of suppliers and a scattered but regionally concentrated workforce. Such concentration of proletarians will always re-create the conditions of unrest. In Gurgaon four major assembly plants, churning out two thirds of India’s passenger cars and two-wheelers depend on more or less the same suppliers.
These contradictory tendencies – a work-force divided into permanents and temps on one side, but an intertwined supply net connecting work-shops with modern assembly plants on the other – is reflected in the statements of managers from various companies about the impact of the local general strike on 20th of October 2009. According to the media 80,000 to 100,000 were on strike: “Except for the two factories (RICO and Sunbeam which supplies to the Hero group) where there was a problem, I don’t think any other factory was closed. About 4,000 to 5,000 workers from various factories joined in the prayer meeting to show their sympathy for those who died,” says Surinder Kapur, chairman of the Sona group, which has many factories based in the belt. But factory managements admitted production was disrupted. “The assembly lines are not working,” a senior Honda Motorcycle and Scooter India (HMSI) official said to agencies. Others say that if the agitation is not resolved, the impact could be huge. “These are major component manufacturers, and we do not carry very much inventory,” says Chairman of Maruti Suzuki, which was not, however, impacted by the strike because of the high percentage of contract workers – some estimates put it at 80 per cent of the labour force – in the area. Many of them lost income during the dispute.”
For the current political background of the situation in Gurgaon it has to be said that in Haryana state elections took place in September / October period. Unions are closely linked to political parties and most of the company and contractor hierarchy is intertwined with the political class. Some of the dynamics of the dispute have to be understood as power plays between various political/representative factions.
We lack proper insight voices of workers who took part in or observed the unrest. In that regard the report published by CEC is probably the most accurate one:
In the following we first want lay-out a chronology of the current dispute, then summarise the dispute at Rico, Sunbeam and Honda HMSI in more detail and finally we give a short over-view on recent car workers’ conflicts in Gurgaon area.
* Chronology of Unrest
4th of August 2009
Rico workers’ representatives start negotiating with management, seeking an annual salary increase of 10,000 Rs plus freedom to form a union with AITUC. The management is not heeding their demand saying the workers have had pay hikes and the unit is continuously seeing low productivity. The union submitted their application to the labour department, Chandigarh, for its formal recognition.
9th of September 2009
Rico Employees Union calls for an open meeting of its members at Kamala Nehru Park, Gurgaon. 3,000 workers attend.
20th of September 2009
Another Rico union meeting in Kamala Nehru Park.
21st of September 2009
Rico Auto Industries Ltd. declares a lockout. Security Guards, police and goons stop workers from entering the factory by force. Previously 16 workers were suspended for indiscipline.
22nd of September 2009
Sunbeam Ltd. locks out workers after dispute over union elections. Company goons or truck drivers attack them at night, workers have to flee, some get injured. Ten workers are submitted to hospitals. Other sources say that workers were attacked by 300 police.
23rd of September 2009
Union solidarity rally in Gurgaon for attacked Sunbeam workers. Some other component makers, including Hema Engineering, AG International, Microtek and even Sona Koyo Steering Systems, Endurance are said to be in current legal disputes between management and unions.
25th of September 2009,
Around 15,000 workers gather in Kamala Nehru Park in Gurgaon during union rally. A memorandum is admitted to the DC Anurag Aggarwal, demanding his immediate intervention on the issues at 14 automobile factories in Gurgaon.
1st of October 2009
Police detains Gurudas Dasgupta, the general secretary of All India Trade Union Congress (AITUC) and the AITUC national secretary DL Sachdeva when coming to Gurgaon to address Rico workers. Union mobilise workers for protest march in response to arrests. Workers sit down at Rajiv Chowk, blocking the traffic for nearly three hours. Haryana Labour Court declares Rico strike illegal.
2nd of October 2009
Maruti Suzuki announces that production in Gurgaon plant is “marginally hurt” by the strike at Rico and Sunbeam. Unrest also has affected TI Metals, Microtech, FCC Rico and Satyam Auto.
4th of October 2009
Police arrives in buses at Rico and Sunbeam workers rally ground, pick up the workers, drive away, and drop them around 12 kilometres away. Tents and utensils are taken away by the police. Twenty-six Rico workers are arrested.
9th of October 2009
Honda HMSI publicly threatens to re-locate production to other country or region not being able to open third assembly line due to dispute with Honda union over wage revision. 17 workers have been suspended at HMSI
18th of October 2009
Ajit Yadav, Rico worker gets killed in clash, several more workers injured. Union officials state that they were attacked by a group armed with iron rods. Police fires shots, workers throw stones. Rico factory gates are blocked by workers in response.
19th of Otober 2009
200 workers sit-down in front of Rico factory in protest. Communist Party of India MP and All-India Trade Union Congress (AITUC) general secretary Gurudas Dasgupta has urged Prime Minister Manmohan Singh to intervene in the trouble. He also asked the Haryana government to disband “private armies” engaged by the management bodies in the industrial hub to take on the workers.
20th of October 2009
60,000 to 100,000 workers of 60 to 80 factories in Gurgaon on one day strike called for by AITUC. Workers from Sona Koyo Steering Systems, Hero Honda Motors, Bajaj Motors and Lumax Industries joined Rico workers in a sit-down protest outside Rico and demonstrations in the streets. Workers’ representatives reject a company offer to pay Yadav’s family compensation of 500,000 rupees and provide a job for Yadav’s wife. “It is illegal in all respects. It has also been declared illegal by the labor department,” said Jagdish Nagar, a deputy commissioner of police.
21st of October 2009
Talks between union, management and Haryana labour department.
22nd of October 2009
Rico management agrees to take back two or three suspended workers and announces that management will accept the formation of a union. Honda HMSI has made a “final” wage increase offer as part of a Long Term Settlement.
23rd of October 2009
Rico management states that 900 workers have turned up for shifts and that 2,000 more workers are expected during the next days.
26th of October 2009
Due to lacking transmission parts supplied by Rico in India Ford has to shut-down production in Oakville plant in Canada for a week, losing several thousand vehicles, sending home about 3,000 workers employed in the plant. The shutdown comes during conflict regarding contract changes to lower Ford’s Canadian labour costs.
27th of October 2009
Honda HMSI and union find three year agreement including productivity related bonus payments. Management hopes that third line will take up work. At Rico the lock-out continues.
28th of October 2009
AITUC calls for Gurgaon wide strike in solidarity with Rico workers. GM in the US announces that two plants (Delta Township and Warren, Michigan) are affected by lack of parts from Rico. Production at Delta Township plant is supposed to be resumed on 9th of November 2009 – 2,700 workers are sent home.
* Summary of Unrest
We focus on the three main companies involved: Rico, Sunbeam and Honda HMSI – all situated in Gurgaon. In order to understand the wider background of the situation at Honda HMSI we suggest to re-read the text in GurgaonWorkersNews no.7. For a general summary of the company situation at Rico and Sunbeam we rely on information of CEC.
Dispute at Rico
CEC: “Rico Auto Limited started its Gurgaon branch in 1994. It is one of the largest ferrous and aluminium foundries supplying die-cast components to the automobile sector. The company makes auto parts for brands like Hero Honda, Honda, Suzuki, Bajaj, Maruti Suzuki, Ford, General Motors, Nissan, Volvo, Jaguar, Tata and Land Rover. In the case of Ford US Rico ships the brackets to a Ford transmission plant in Detroit, Michigan, from where they are sent to assembly plants across the region. In the disputed plant in Gurgaon Rico has 3,600 permanent workers and around 1,500 casual workers. There are 500 workers as management staff. Around 76 workers are women. The salary structure of the employees is very low. Permanent employees with 2-6 years’ experience are paid Rs 4,500 a month, whereas the casual workers with same experience are paid Rs 3,800-Rs 4,000 per month. The permanent workers with 6 to 9 years’ experience get Rs 6,500 monthly, and those with 9-10 years get Rs 8,000-Rs 10,000.”
The conflict involved demands for higher wages etc., but by end of September 2009 the official point of tension was the demand for registration of a trade union affiliated to the All India Trade Union Congress (AITUC). According to CEC, the workers felt the need for unionization when the company, in the name of economic recession, threw out large numbers of workers without prior information or economic benefits. The situation inside the plant became tense. “The demand for the formation of a union has been sent for verification to the Labour Commissioner and we have no objection against it,” said Mr Surinder S. Chaudhury, Vice-President, Human Resource, Rico. He added that production since September 2009 has dropped 40-50 per cent. Rico reacted by suspending sixteen workers. “We had to suspend them because they were going slow. They had slowed the production line by around 30 per cent for the last 45-60 days,” a company official said in late September 2009. In order to control the situation management was forced to look for a head-on collision. The suspension of sixteen ‘union reps’ was a save means to provoke a reaction and to get the ‘trouble-maker’ out of the plant:
“On 21 September, those workers who came to work faced the wrath of the management and were forced to sit outside the gate of the factory. ‘Around 5,000 employees had to sit outside the company gate, since the company said it was on lockout from 21 September 2009,’ says the Rico employees. The employees came to know about this undeclared lockout only on the same date, when the first batch of around 1,500 workers had gone to work at 6 am. The security guards at the gate did not allow the workers to go inside. When they refused to listen, the police force, along with the security guards and bouncers (the musclemen employed by the company), lathi-charged the workers. ‘Many of us got minor bruises, but major causalities did not happen,’ says Ranjan Pande, a Rico employee. The workers have been in front of the factory gate since September 21, 2009. ‘We are not on dharna (protest assembly); we are sitting here because the management does not allow us to go inside,’ emphasize the workers.” (CEC-report)
There are divergent information about the strike’s / lockout’s impact on the companies’ production. Some state that Rico’s management had been able to mostly maintain production and meet schedules as, out of a total of 3,000 employees, around 1,700 were reporting for work. Rico has been forced to operate two 12-hour shifts against the normal practice of running three shifts of 8 hours each.
Dispute at Sunbeam
CEC: “Sunbeam Auto Ltd is a unit of the Hero Group of Industries, and was established in Gurgaon in 1987. The company has 650 permanent workers, 800 staff members, 600 trainees, and around 2,500 casual workers. The concept of trainees at Sunbeam is worth mentioning, as people with numerous years of experience remain trainees here. One such trainee is Hansraj, who is an operator of the gravity dye casting, and is a trainee for the last ‘eight’ years. According to the workers, there are trainees with even 13 years of experience. Same is the case with the casual workers. Mangaram is a casual worker for the last 12 years, and works for a basic salary of Rs 3,510. The company gives meagre wages to its staff. Subhash Babu’s take-home salary is Rs 9,000 only, in spite of his 23 years of work experience as a quality inspector”.
“The case of Sunbeam Auto Ltd is not much different from that of Rico. The only difference here is: the workers have asked for revival and election of the existing union. Sunbeam has had a registered union – Sunbeam Shramik Union – since 1996. A “management friendly” union. In May 2009 the term period of the current office bearers got over, and the workers demanded an election and a change in the leadership. (…) The tactics of the management consisted of calling workers independently to the concerned department head’s room and making him forcefully sign a letter that was taken on a 10-rupees stamp paper, stating his willingness to acknowledge the current union. The management could collect signatures of around 200-250 workers, since the threat was to terminate them. But when a majority refused to do so, the management prevented the entire workforce from entering the factory premises on September 22, 2009, without any notice. Like Rico, the gates were not opened for them for the 6 am shift. The management version of the incident is different. According to SK Sharma, the DGM of Sunbeam, the company is not on lockout and is functioning with 30 per cent of its workforce. He emphasized that the workers are on an illegal strike.”
Dispute at Honda HMSI
HMSI currently has 1,872 regular workers and another 2,500 on contract. Honda HMSI plant was affected by the disputes at Rico and Sunbeam due to lack of parts – but there was a ‘home-grown’ conflict going on, as well. The Honda workers union and Honda management were in process of negotiating a three years wage agreement. The management accused the union of using a go-slow tactic at the new third production assembly line, involving 40 permanents and 100 casuals, in order to put pressure on the management.
On 10th of October HMSI management announced that production at the plant is down by more than 50 per cent and that the new line for vehicles – the third one since production began – has failed to take off. “This means a production loss of almost 600 two-wheelers per day. Overall, we are equipped to roll out 4,350 vehicles a day but we are doing only a little over 2,000 units because of the workers’ attitude,” an HSMI official said. While no concrete figures are available, it is estimated that the company has suffered a loss of around 250 crore Rs.
Mohan Deepak, VP for Industrial Relations at HMSI, said the average cost-to-company (CTC) for a shop-floor worker is currently around Rs 25,000. According to HSMI management the wage demands of the union will push their CTC higher than shop floor workers at Hero Honda, the current market leaders with stronger business and production figures.
On 27th of October 2009 union and management enter an agreement on 3-years wage contract including “performance reward scheme”.
* History of Unrest
It would be an important task to write a historical analysis of the struggles in Delhi’s industrial belt during the last decade in order to understand the current conflict in its context – for many reasons we can only give a superficial summary of some automobile workers’ disputes in Gurgaon of the last three – four years.
Hero Honda temp-workers occupy factory – April 2006
Unnoticed by most lefty groups or unions more than 3,000 temp workers occupied the Hero Honda Gurgaon plant for several days demanding higher wages and better conditions. The company cut water and electricity – the workers sent a delegation for negotiations, which was bought off. Some demands were met by the management. When the factory occupation ended workers at Hero Honda supplier Shivam Autotech occupied their plant raising similar demands.
Workers at car parts manufacturer Amtek attacked – June 2006
After some workers close to the union were disciplined by shifting them to a different plant of the company they and some more workers joined in a sit-down protest inside the plant. After some disputes with the management they were beaten up by paid goons – other sources said that they were beaten by temp workers of the plant.
Honda HMSI temp workers go on wildcat strike – September 2006
After temp workers were allegedly not included in a union deal they occupy the canteen of the plant supported by the next arriving shift from the outside. The company reacted by cutting water supply. The company and union asked them to go back to work. Some sources claimed that the strike was instigated by anti-union forces paid by the management.
Wildcat strike of temps at car parts manufacturer Delphi – January and August 2007
At Delphi 250 permanents (unionised) and 2,500 temp workers were employed. The temp workers went on wildcat strike blockading the main gate in January 2007. The company threatened to close the factory and asked the union to get the temps back to work. In August the temps struck again for few hours, demanding the payment of the increase minimum wage and succeeded.
Series of wildcat strike at auto suppliers – September 2007
After the Haryana government increased the minimum wage in summer 2007 many companies kept on not paying the wage or making workers work many more hours for it. In several companies workers – most of them with temp contracts – rejected the wage payment and laid down tools spontaneously. In most cases the management promised to pay the minimum wage in future.
(GurgaonWorkersNews no.9 and no.10)
Automax casual workers attacked by police – April 2008
Casual workers at car parts manufacturer Automax demanded permanent contracts – the management reacted by suspending ‘leaders’ in order to provoke a reaction. In a strike / lockout situation and subsequent agitations the police attacked the workers with lathis (clubs).
Wildcat strikes at car parts manufacturer Ilpea Paramounts – April 2008
About 80 casual workers of the company got engaged in a legal dispute in front of the labour department. They tried to put pressure on the company during visits of the labour inspector – the company reacted by threatenening them with goons.
Wildcat occupation of plant by temp workers at Hero Honda Dharuhera – May 2008
After not having been accepted as members by the permanent workers’ union the temp and casual workers went on wildcat strike and occupied the plant for two days. Management and permanent workers union both promised betterments of the workers’ situation. The temp and casual workers then tried to register their own union – a process which ended in a mass lock-out in October 2008.
Wildcat sit-in strike of temp workers at Honda HMSI – September 2008 Another wildcat sit-in by precarious workers against manhandling by the management.
Lock-out and killing of manager at Graziano car parts supplier – September 2008
After a longer dispute about union recognition and various unions involved (AITUC, CITU, HMS) the company suspended workers and finally locked them out. The workers continued their protest demanding their jobs back. In an escalation a manager got killed.
Lock-out of temp workers at Hero Honda Dharuhera plant – October 2008
After their wildcat strike in May 2008 the temp and casual workers tried to register a union and put forward a general demand notice. The company reacted by locking out all temp and casual workers during big market slump. The company let in the permanent workers and half of the casual and temp work-force. 1,200 workers stayed locked-out, 800 new workers were hired.
(GugaonWorkersNews no.14 and no.19)
Lock-out and police attack on workers at car parts manufacturer Musashi – April 2009
In a dispute about union recognition several leaders were suspended. About 250 workers showed their solidarity and were locked-out in response. During a protest-march the police attacked and arrested many workers.
Strike / Lock-out at Rico and Sunbeam car parts manufacturer – September 2009
In dispute for higher wages and union recognition about 4,000 workers of two car parts manufacturers went on strike / got locked-out. One worker got killed during a clash, AITUC called for a one-day-general strike.
* What crisis?
a) In what kind of situation of the Indian automobile industry did Gurgaon strike take place?
The strike in Gurgaon automobile industry happened at a time of proclaimed “recovery” of the Indian car industry. End of October 2009 the two main automobile companies in Gurgaon – and India – announced record figures.
Maruti Suzuki India reported a nearly two-fold jump in its net profit for the period July to September 2009 – compared to the previous year. The company’s domestic sales grew by 21.9 per cent at 209,083 units. Management said exports during July to September 2009 jumped by 109 per cent at 37,105 units as against 17,745 units in the year-ago period. Maruti Suzuki announced significant investment in Gurgaon plant in order to increase capacities by 90,000 cars. In the two plants in Gurgaon and nearby Manesar production capacities are about 1 million cars per year.
Hero Honda which runs two plants in Gurgaon area and is world’s biggest two-wheeler manufacturer is on a similar high. End of October 2009 the company announced that it would smash its annual sales target as it reported a 95 per cent jump in the second quarter profits. Hero Honda management was confident of exceeding its sales target of four million units for the year.
Examples of an exceptional regional boom contrasting the global crisis or just a mild recovery after a record slump?
b) No decoupling: Indian car industry shared the global slump in October 2008 and benefited from the state sponsored scrappage incentive in the EU and deficit spending and low interest rates in India
The Indian car industry experienced a similarly deep slump in the end of 2008. All major car companies sacked their temporary staff, temporarily closed assembly departments or cut working-times – for summary see GurgaonWorkersNews no.16.
During the fiscal year 2008 to 2009 (April 2008 to April 2009), the sales of domestic passenger cars increased by ‘only’ 1.31 per cent to reach 1,219,473 units. In the absence of stimulus packages, the sales of passenger vehicles would have declined 3 per cent or have shown no growth whereas the commercial vehicles sales would have declined 30-40 per cent.
The mild recovery since March 2009 was partly based on lower prices for steel – due to the severe over-production of Chinese and Indian steel manufacturers. The industry also benefited from lower taxes – part of the deficit spending of the Indian state, which tumbles further into debts. Car sales for June 2009 (107,000 units) have increased by 7.8 per cent in the Indian market. The main contributing factor is the reduced interest rates for the auto loans. In July 2009 115,000 units were sold, the mild upward trend continued till September 2009.
More than from internal demand the Indian car industry recovered due to the state sponsored “recovery” of the EU car market – through scrappage incentives and other stimulus programs. Car exports from India – mainly to the EU – jumped by 35.73 per cent from April till September 2009, in concrete numbers 210,088 units as against 154,783 units in the year-ago period. In October 2009 newspapers announced a drop in export growth due to end of government programs in the EU. Total exports grew ‘only’ by 21.6 per cent in September compared to over 30 per cent in the last few months.
The total sales figures of commercial cars like trucks and buses are still down. State infused liquidity might encourage private consumers to take on a credit, but the general industry seems still reluctant to beg on future profits by investing.
c) India’s car industry shares global fate of over-capacities – the internal market is limited
India’s car industry is running into over-capacities – the productive capacities of the two Maruti Suzuki plants alone are at 800,000 to 1 million cars per year. Currently are about a dozen more assembly plants in India – modern assembly plants run profitable at about 300,000 cars, meaning that the total productive capacity in India is somewhere beyond 3 million cars per year. Currently the internal market is about 1.3 million cars – propped up by cheap credits and dependent on US outsourced IT and banking jobs – export figures are at about 350,000 units. Industrial workers in India are nowhere near an income allowing them to buy cars and the waged middle class mainly depends on crisis ridden real estate or IT sectors. The Tata Nano – hailed as India’s Volkswagen and cheapest car in the world – turns out to be produced into a social vacuum. Since production start in July 2009 the monthly production is only 2,500 units. About 150,000 Rs is still way to expensive even for well paid industrial workers – and exactly these better off permanent industrial workers have been under attack since the mid-1980s – see for example GurgaonWorkersNews no.8 on struggle at Maruti Suzuki.
d) In the current phase state credits keep the business running, mergers and struggle over markets are increasing – but they only exacerbate the problems in the future
Unable to solve the actual problem of the industry – the profitability crisis and the crisis of a mode of production – increasing company merger invert the neo-liberal myth of ‘outsourcing’ and profit-centres. In the course of the crisis the big car manufacturers had to bail out the spun-off and formally independent suppliers (e.g. GM had to bail out subsidiary Delphi). Some Indian companies are taking part in those international fusions of capital. Delhi-based car parts manufacturer Amtek was seen as a potential buyer of machinery and plants of bankrupt EU branch of Ford’s main supplier Visteon – on Amtek’s violent repression in Gurgaon factories see GurgaonWorkersNews no.3. Gurgaon based Motherson Sumi bought several bankrupt parts manufacturer in Europe in 2009 – on working conditions at Motherson see GurgaonWorkersNews no.6. In 2008 Tata took a loan of over 3 billion USD for taking over Jaguar and Land Rover. These mergers are only formal reflections of two general tendencies: ‘global cars’ (produced in few plants and exported to countries all over the planet) and a extension of the global supply chain and spread out division of labour (e.g. US factories actually depending on parts produced in the global south).
e) With increasing transport costs the ‘global car’ was put on hold – now it is seen as one way out of the crisis
Particularly the Renault Logan was presented as a truly global car. Manufactured in few factories, amongst others in Romania and India to be delivered to countries around the globe. The Logan production in India is stuck in a jam. India sales crashed by 71 per cent in September 2009 to just over 500 vehicles, while its April to September 2009 numbers are down to less than a third of last year. Renault managers say that “it is more expensive than we hoped it would be in India. The market here is extremely sensitive to the price. Another reason is, we don’t have enough localisation in India”, meaning that too many parts are imported from ‘expensive’ abroad. The concept of an ‘export car’ is still on, e.g. Nissan and GM want to start production of a ‘cheap global car’ in 2010. Indian labour costs are said to be about 10 per cent of that in the U.S. and Europe and raw material costs in the nation are lower by 11 per cent. “The Chennai plant will start exports in the second half of 2010. We will export 110,000 units in 2011 to more than 100 countries especially, Europe (30 countries) and will increase to 180,000 units in the future,” a Nissan manager said in October 2009. India exports more cars than world’s biggest car manufacturer China and exports are growing faster than domestic sales, e.g. Hyundai plans to export 300,000 cars from India in 2009, more than its sales in the Indian local market. But where to, given the general slump in car sales? Newspapers hail the 10 per cent share of Indian manufactured cars in emerging markets like South Africa – but that is 10 per cent of ‘only’ 500,000 annually sold cars. Another trend in order to enter markets is to source cheap car parts from China or other Asian countries. India’s automobile manufacturers increasingly intertwine their production with Chinese car makers, particularly for automobiles produced for exports to Africa and within Asia.
f) We can see an extensions of the global supply chain of car parts emerging out of the last years’ profit squeeze – connecting Indian workers more or less directly to workers in China, South Korea and the EU and the US
During the last years export of car parts from India grew faster than the export of complete cars – parts are exported mainly to the US, EU and Japan. In September 2009 Fiat announced to source 1 billion USD of parts from India in 2010, out of which 300 million USD for export to the EU plants. In September 2009, as well, Hyundai India started exporting crank shafts and connecting rods to Hyundai factories in South Korea. Component exports from India, that touched 3.6 billion USD in 2007-08, are estimated to be near flat in 2008-09. The car parts manufacturer in India are directly linked to the international markets. Amtek Auto – mainly based in Gurgaon – gets as much as 50 per cent of its sales from abroad. In September 2009 an Amtek manager said: “Overseas sales for us was down as much as 30-40 per cent last fiscal year following the slowdown in Europe. While we had done around $650 million in 2007-08, the number came down to around $450 million last fiscal,”. The same is true for Rico Auto Industries that makes components for engines: “Our exports dipped by around 7 per cent last fiscal as US and Europe shrank,” he said. Rico supplies to companies like Ford, GM, Caterpillar, BMW and Cummins.
g) Global division of labour and ‘global cars’ make sense only if low wage regions are kept low waged and if these low wages are imported back into the centres. Workers have to turn this trend around by making use of their global cooperation. The Rico dispute in Gurgaon stopped a Ford plant in Canada, at the same time Ford workers voted against a wage cut deal.
The Rico dispute has shown the global dimension of car production today. It has shown Ford workers in the US and Canada not only that the production in their plants depend on ‘cheap labour’ from the south, but that this ‘cheap labour’ is not up for the race-to-the-bottom: an industrial dispute, amongst others concerning the demand for higher wages, interrupted the global supply chain. At this point of time Ford workers in the US were supposed to vote in favour of wage cuts in order to save their jobs. End of October 2009 Ford workers in Missouri have overwhelmingly rejected a new contract with Ford. Ford and the United Auto Workers union agreed to the changes to help lower Ford’s labour costs, but UAW members must ratify the changes. Kansas City UAW local president Jeff Wright says workers were angry about a cap on entry-level wages, changes in work rules and a no-strike provision. This is not yet an ‘active communication’ between workers around the globe, but a mutual influence and a sabotage of the current re-structuring process of the global car industry. Only by making conscious use of this cooperation the global working class can find a way out of the automobile madness of destructive production.
* The traffic mess
The terrific jam -
The car is not only terrible to produce, it also causes further damages on its polluting way – see GurgaonWorkersNews no.13 on energy and traffic crunch in Gurgaon.
Expressway to die -
More than hundred people died in 1,696 accidents on the Delhi-Gurgaon Expressway since February 2008 – many of them workers who have to cross the highway on their way to work. In August 2009 the National Highway Authority India published a declaration saying that major shortcomings (lack of footbridges and ambulances etc.) had been solved. An inquiry published by Newsline a week later revealed that most of the amendments exist on paper alone. “No foot over-bridge beyond Rajiv Chowk till Kherki Daula toll plaza”. “At Ambience mall, the ambulance from Paras Hospital was locked and even after waiting for almost 20 minutes, no staff came.” “There were no fire tenders along the entire stretch of the Expressway.” “No segregation of lanes or dedicated lanes marked for emergency vehicles at any of the toll plazas.”
Cybercity Blocked Up -
A recently published study about traffic problems in Gurgaon revealed that the average speed of cars during peak hours on DLF Cybercity Road is 1 Kilometre in 45 minutes. About 100,000 cars use this road each day. The average time a car is stuck into traffic jam is 90 minutes – during this time 1.25 litres of petrol are turned into poisoned air.
* Video-Interviews with Gurgaon Automobile Workers
As part of a workers’ documentary about life and struggle in Delhi’s industrial belt friends interviewed various automobile workers in the area: workers in Faridabad slum-work-shops producing door hinges for Maruti Suzuki and others, a young CNC operator in a car parts manufacturing company, three suspended temporary workers at Hero Honda plant, a former Maruti Suzuki worker sacked during the lock-out in 2000.
3) According to Plan -
General information on the development of the region or on certain company policies
*** From Cluster to Class War -
Faridabad was India’s biggest industrial cluster in the 1970s and hotspot of workers’ struggles in the late 1970s till mid-1980s. 40 km to the west Gurgaon’s urbanisation in the 1980s was based on Faridabad’s industrial supply-chain providing Gurgaon’s assembly plants with parts and productive knowledge – while the experience of struggle was hoped to be deluded by rapid re-location within emerging the industrial belt. A proper analysis of “clusters” would have to look at the main contradiction of capital: capital thrives on the productivity of workers’ mass concentration and “economy of scale” and at the same time it is threatened by workers’ collective anger becoming more forceful and creative through proletarian proximity. Nevertheless the studies’ summary might serve as another little piece in the jigsaw of understanding the process from cluster to class war.
Academic research normally focuses on a single aspect of clusters. The study “Gurgaon and Faridabad – An Exercise in Contrasts” by Bibek Debroy and Laveesh Bhandari tries to understand the different development models of Faridabad and Gurgaon by looking at the different “legal land regimes”, e.g. what was the legal frame-work for the transformation of farmers’ land into industrial or urban land in these two satellites of Delhi? The study tries to find out why Gurgaon witnessed a more rapid growth than Faridabad since the 1990s and “it finds that a confluence of macro-economic, geo-spatial, political economic and institutional factors conspired to provide tremendous advantages to Gurgaon but not to Faridabad till the mid 2000s.” If you are interested in the complete study please drop us a note.
Summary: “Gurgaon and Faridabad – An Exercise in Contrasts” by Bibek Debroy and Laveesh Bhandari
* Faridabad has more fertile land and smaller land-holdings than Gurgaon, therefore it was easier to acquire land in Gurgaon
“Geographically the Aravali hill range separated the two [new] districts. Faridabad lies between the Aravalis and the Yamuna, one of North India’s largest perennial rivers. The land is relatively richer alluvial with a high water table and consistent land sloping from the Aravalis in the West to East towards the Yamuna. In other words, agriculture is far more productive in Faridabad – with relatively richer soil, easy access to water through tube wells and irrigation channels, and good drainage. Consequently the new Faridabad district had more productive and valuable land. Being less productive and less in demand for agricultural purposes, Gurgaon’s land was more readily convertible to non-agricultural purposes and government policies allowed this conversion. This didn’t happen in Faridabad, where land was relatively more fertile. The land size distribution was also skewed towards larger plots-sizes in Gurgaon than in Faridabad. In other words, land for non-agricultural purposes was cheaper and larger plots were more available in Gurgaon. Converting agriculture to non-agricultural land was therefore far easier and cheaper for the private construction firms in Gurgaon, and the monetary returns to the entities involved in this were also consequently far higher in Gurgaon.”
Average Size of land-holding 1980-81:
Faridabad: 1.91 Hectar
Gurgaon: 2.45 Hectar
* Faridabad’s urban growth was based on industries manufacturing for the domestic market. These got attacked by liberalisation since 1991. The export industries were then mainly based in Gurgaon
“Indian economic reforms started in the mid-eighties and gathered momentum in the early nineties. The bulk of Faridabad’s manufacturing base developed before this period. In line with overall economic structure of India during that period, the large industrial base of Faridabad produced for a domestically-oriented market. The 1990s reforms led to de-licensing of most manufacturing, open entry both for domestic and international firms, rapid lowering of import tariffs, depreciation of the rupee, reduced subsidies and benefits to the manufacturing sector in general. This led to a range of negative shocks to the manufacturing sector in India in general and Faridabad’s in particular. Meanwhile the rapid growth of the services sector, the entry of MNCs, and the rapid rise of the export oriented Information Technology (IT) and IT enabled services (such as business process outsourcing) required large floor spaces which the large private entities were willing to supply in Gurgaon.”
Bank Credit to Industry as per centage of total in Haryana in 1996 (2006)
Faridabad: 22 % (19 %)
Gurgaon: 12 % (22 %)
* The Haryana political elite got engaged in land deals in Gurgaon, which made it easier to obtain permissions to turn agricultural land into real estate and industrial plots
“Agricultural land was easier to acquire in Gurgaon than in Faridabad. The land was acquired not only by private sector construction companies, but also (it is claimed by many though not confirmed) by the political class, which had some inherited in Gurgaon as well. This land now needed to be converted into non-agricultural use. And since the political class was also (as claimed) a beneficiary from this conversion, with higher sale values resulting, the conversion was readily done in Gurgaon.
One further strand needs to be added to complete the story.
Haryana was the first state in India that allowed entry of private developers in real estate. In that sense, the Haryana Urban Development Authority (HUDA) policies were uniform across both Gurgaon and Faridabad. However, the so-called third-tier of government: urban local bodies (ULBs) were missing in Gurgaon. Gurgaon only had a municipal committee, not a municipal corporation, since it was below the relevant population threshold. Had there been a municipal corporation, as was the case in Faridabad, there would have been yet another tier of government, with possible countervailing checks on arbitrary conversion of village land to urban areas.
Land conversion requires many permissions and complex procedures. It requires the ascent of the state government (Government of Haryana), the land development agencies (Haryana Urban Development Authority – HUDA), and also the local government. Within the state government the Chief Ministers (CM) office has the key veto power in allowing land conversion. Hence all of land conversion and development related issues were highly centralized for Gurgaon, controlled directly by the CM’s office.”
The study then explains in detail how the “Second Tier” of governance used various tricks to delay the ‘formal urbanisation’ of Gurgaon (using gaps in the National Census etc.) and in order to keep central command over the conversion of land into assets. We have covered in various GurgaonWorkersNews how the influx of speculative capital and the emergence of a class of ‘real estate farmers’ ripped apart the old patriarchal village communities and brutalised a whole region.
*** Local War on Terror and the Terror of the Labour Market -
Two recent news items reflecting the fear of the ruling class towards the ‘unruly poor’. In the first news article the ‘unruly poor’ appear in the unspecific figure of terrorism with a hint at undocumented labour migrants. The article refers to a report published by yet another NGO about lacking police force and fire tenders – Gurgaon is not prepared for counter-insurgency. In the second article we can see how the ruling class tries to channel the ‘terror’ of the labour market into inter-working-class tension by demanding job reservation for a specific group, in this case putting the local proletarians vs the migrant proletarians.
“Gurgaon soft terror target: Study
Home to several corporate offices and a major IT hub, the Millennium City has been ranked as highly vulnerable in a terror-specific Disaster Management Assessment Survey (DMAS). The first-of-its-kind survey conducted by NGO Centre for Transforming India has found that the city is currently equipped with only 23 fire tenders, 2000 hospital beds and 3600 police personnel while these figures should ideally be 50, 6000 and 10000, respectively. According to the study, the city fares badly in terms of infrastructure and mobilization capability to counter and curtail any terror-inflicted disaster. The study notes that the government and private developers need to accord due importance to areas like manpower training and investment on devices such as CCTVs to achieve a robust security system. Commenting on the findings of the study, Pankaj Sharma, chief trustee, Centre for Transforming India, said: “With a population of more than 2 million, Gurgaon is home to a large floating population which includes people working as maids and servants, migrant population, people coming for work and those coming to malls purely for entertainment. However, there are no mechanisms for coordination among the government, private companies having offices in Gurgaon, developers and mall owners in terms of sharing of resources or knowledge so that the city does away with its weak spots and becomes capable of countering untoward incidents.”
(16th of October 2009 – Times of India)
During the recent Rico strike Gurgaon police was able to get military aid. The Gurgaon Police Commissioner said he had called for ten companies from the Haryana Armed Forces and India Reserved Battalion “to tackle the situation”. If you have difficulties to rule, you still can try to divide, as the following article shows:
“Gurgaon’s success masks Haryana’s woes
Inadequate investment in human capital leads to resentment against areas that contribute most to state’s revenue. Gurgaon, the mother lode of Haryana’s exchequer, is turning into a symbol of resentment among the youth of one of India’s richest states: many of them do not have skills for white-collar jobs, triggering a clamour among politicians for job reservations for local people. “We have promised 80% job reservation for the youths of Haryana in our manifesto,” said Kuldeep Bishnoi, chief of Haryana Janhit Congress (HJC), who was Congress’ member of Parliament (MP) in the last Lok Sabha.
“We can no more allow industries in Faridabad and Gurgaon, using our power and water, to feed youths from other states, leaving our ones jobless.” The Indian National Lok Dal (INLD) has promised 50% reservation for local youth and even a national party, such as the Bharatiya Janata Party (BJP), has asked for half the jobs to be reserved for locals.
In Haryana industry is increasingly driving the economy of a state where ownership of land was traditionally valued over education or employment. Vivek Kumar, a professor of sociology at New Delhi’s Jawaharlal Nehru University, who has carried out fieldwork in Haryana, is not surprised. “It is a feudal society where land has dominated the psyche,” he said. Successive Haryana governments have clung to an illusion their society would remain largely agrarian, he added, explaining the under-investment in education. Gradually Gurgaon, and to a lesser extent Faridabad, have begun to turn into lightning rods of the frustration of Haryana’s youth, which is articulated by politicians.
“Unemployment is a major issue and has worsened in the last five years of Congress rule. Our party has promised 50% job reservation for local youths. The state’s fate cannot be left to be decided in the hands of a few sitting in five-star hotels in Gurgaon and Delhi,” Manish Grover, the BJP candidate from Rohtak, told Mint. INLD’s MP Ajay Singh Chautala pointed out that the frustration eventually showed up in the form of a rising crime graph. “Joblessness has led to lawlessness in the state, with many taking to wrong ways of earning money,” he said.”
(12th of October 2009 – Livemint)
4) About the Project -
Updates on Gurgaon Workers News
*** Glossary -
Updated version of the Glossary: things that you always wanted to know, but could never be bothered to google. Now even in alphabetical order.
Lakh (see Crore)
Wages and Prices
Workers hired through contractors
The All India Trade Union Congress (AITUC) is the oldest trade union federation in India and one of the five largest. It was founded in 1919 and until 1945, when unions became organised along party lines, it was the central trade union organisation in India. Since then it has been affiliated with the Communist Party of India.
Business Process Outsourcing: for example of call centre work, market research, sales.
Centre of Indian Trade Unions, a national central trade union federation in India. Politically attached to CPI(M), Communist Party of India (Marxist). Founded in 1970, membership of 2.8 million.
Workers hired by the company for a limited period of time.
Workers hired for a specific performance, paid for the performance.
1 Crore = 10,000,000
1 Lakh = 100,000
DA (Dearness Allowance):
An inflation compensation. Each three to six months the state government checks the general price development and accordingly pays an allowance on top of wages.
Deputy Commissioner, Head of the District Administration.
ESI (Employee’s State Insurance):
Introduced in 1948, meant to secure employee in case of illness, long-term sickness, industrial accidents and to provide medical facilities (ESI Hospitals) to insured people. Officially the law is applicable to factories employing 10 or more people. Employers have to contribute 4.75 percent of the wage paid to the worker, the employee 1.75 percent of their wage. Officially casual workers or workers hired through contractors who work in the factory (even if it is for construction, maintenance or cleaning work on the premises) are entitled to ESI, as well. Self-employment is often used to undermine ESI payment.
1 US-Dollar = 43 Rs (July 2008)
1 Euro = 68 Rs (July 2008)
Haryana State Industrial and Infrastructure Development Corporation
Industrial training, e.g. as electrician or mechanic. Two years of (technical school), one year of apprentice-ship in a company. During the two years at school the young workers receive no money, but they have to pay school fees. A lot of the bigger companies ask for ITI qualification.
Lay off in the Indian context means that workers have to mark attendance, but they actually do not work and receive only half of the wage.
Official minimum wage in Haryana in June 2007 is 3,510 Rs per month for an unskilled worker, based on an 8-hour day and 4 days off per month. But hardly any workers get this wage.
A locally elected village administrative body in charge of village-level issues.
PF (Employee’s Provident Fund):
Introduced in 1952, meant to provide a pension to workers. Officially applicable to all companies employing more than 20 people. Official retirement age is 58 years. Given that most of the casual workers belong to the regular workforce of a factory, they are entitled to the Provident Fund, as well. So are workers employed by contractors. If workers receive neither PF nor ESI they also do not show up in the official documents, meaning that officially they do not exist.
Officially the so called ‘governmental fair price shops’ are shops were ‘officially poor’ people can buy basic items (wheat, rice, kerosene etc.) for fixed and allegedly lower prices. In order to be able to buy in the shops you need a ration card. The ration card is also necessary as a proof of residency, but in order to obtain the ration card you have to proof your residency. Catch 22. Local politics use the ration depots and cards as a power tool that reaches far into the working class communities. Depot holders’ jobs are normally in the hands of local political leaders. In return they receive this privileged position, which often enable them to make money on the side.
Superintendent of Police, Head of the District Police.
In India staff includes managers, supervisors, security personnel and white-collar workers.
In general trainees work as normal production workers, they might have a six-month up to two-year contract. Depending on the company they are promised permanent employment after passing the trainee period. Their wages are often only slightly higher than those of workers hired through contractors.
VRS (Voluntary Retirement Scheme):
Often a rather involuntary scheme to get rid of permanent workers. Particularly the VRS at Maruti in Gurgaon made this clear, when 35 year olds were sent in early retirement.
Wages and Prices:
When we hear that a cleaner in a call centre in Gurgaon, an industrial worker in Faridabad or a rikshaw-driver in Delhi earns 2,000 Rs for a 70 hour week, which is about the average normal worker’s wage, we have to bear in mind that they often came from West Bengal, Bihar or other remote place in order to get this job. In order to put 2,000 Rs into a daily context here are some prices of goods and services:
- Monthly rent for a plastic-tarpaulin hut shared by two people in Gurgaon: 800 Rs
- Monthly rent for a small room in Gurgaon (without kitchen), toilet and bathroom shared by five families: 1,300 Rs
- Monthly rent for a small room in a new building in central Gurgaon, single toilet and bathroom: 4,500 Rs to 8,000 Rs
- Half a kilo red lentils on the local market: 25 Rs
- Kilo rice on local market: 14 Rs
- 1 Kilo Onions and 1 Kilo carrots on local market: 25 to 30 Rs
- McChicken: 40 Rs
- Bottle (0,7l) of beer at Haryana Wine and Beer shop: 50 to 70 Rs
- Cigarettes (10), cheapest local brand: 25 Rs
- Starbucks Coffee (Latte Medium) in Shopping Mall: 59 Rs
- Faulty shirt on Faridabad local market: 40 Rs
- Single gas cooker plus new 2 litre gas cylinder: 720 Rs
- Re-fill gas (2 litres – once every month and a half): 100Rs
- Second-hand bicycle: 600 to 1,000 Rs
- Two simple steel pots: 250 Rs
Transport and Communication:
- Bus ticket to nearest bigger bus stop in South Delhi: 14 Rs
- Daily Newspaper: 3 Rs
- One hour internet in a cafe: 20 Rs
- Cinema (new) ticket Saturday night: 160 Rs
- Single entry for swimming pool: 100 Rs
- One litre Diesel: 30 Rs
- Driving license in Haryana: 2,000 to 2,500 Rs
- Start package pre-paid mobile phone (without the phone) 300 Rs
- Phone call to other mobile phones: 1 Rs
- One month mobile phone flat rate: 1,500 Rs
- Minimum dowry poor workers have to pay for the marriage of their daughter: about 30,000 Rs (80,000 Rs more likely)
- Money given to poor labourers for their kidney: about 40,000 Rs
- Compaq Laptop: 50,000 Rs
- Flight Delhi to London: 28,000 Rs
- Cheapest Hero Honda motorbike (150 cc): around 40,000 Rs
- Ford Fiesta: 587,000 Rs
- Four hours on Gurgaon golf course: 800 Rs (info from golf course worker earning 2,400 Rs monthly)
- Two-Bedroom Apartment in Gurgaon: 10,000,000 to 50,000,000 Rs
Workers hired through contractors
Similar to temporary workers, meaning that they work (often for long periods) in one company but are officially employed by a contractor from whom they also receive their wages. Are supposed to be made permanent after 240 days of continuous employment in the company, according to the law. A lot of companies only have a licence for employing workers in auxiliary departments, such as canteen or cleaning. Companies usually find ways to get around these legal restrictions, e.g., workers services are terminated on the 239th day to avoid workers reaching eligibility criteria to become permanent. In many industries contract workers account for 60 to 80 per cent of the work force, their wage is 1/4 to 1/6 of the permanents’ wage.