Mobilizing Restraint: Democracy and Industrial Conflict in Post-Reform South Asia

2. Industrial Relations in the Context of Economic Change

CHAPTER 2 Industrial Relations in the Context of Economic Change Battle lines are being drawn in labor actions across India. Factory managers, amid the global economic downturn, want to pare labor costs and remove defiant workers. Unions are attempting to stop them, with slowdowns and strikes that have led at times to bloodshed. —Wall Street Journal, 2009 In January 1982, Datta Samant, president of the Maharashtra Girni Kamgar Union (MGKU), led a quarter of a million textile workers on a sectorwide strike in Mumbai. Samant’s demands included a wage increase of between 25 and 50 percent (depending on the factory), a bonus increase of 20 percent, and guaranteed permanent employment for all textile workers (Lakha 2002, 236). Lasting for more than eighteen months, the strike was the largest in India’s history by almost any measure .1 Samant drove a hard bargain, but employers refused to budge. Ultimately , rather than meeting the union’s demands, owners of dozens of firms decided to instead outsource production to suppliers in the smallscale sector, to shift production to rural areas, or to simply close their mills altogether. For the more than 150,000 textile workers who lost their jobs, the consequences of the strike were disastrous. Many former strikers fell into abject poverty. Some workers were driven by their desperation to sell family members into prostitution or to commit suicide.2 For decades former strikers continued to agitate for government takeover of the mill lands and against their redevelopment by private companies.3 The Bombay textile strike represented a turning point in the history of Indian industrial relations. It signaled a dramatic loss of bargaining power of workers in industry and the beginning of an era in which 28 CHAPTER 2 protracted struggle would be required to win even the simplest demand. In the quarter century following Independence, organized labor had benefitted from the protections afforded by pervasive state intervention in private manufacturing. Individual manufacturing companies were profitable, if inefficient, and unions could win large demands with short strikes. But new economic policies began to undermine the strength of medium- and large-scale manufacturers as early as the 1970s, and by the 1980s industries in many sectors (including textiles) were ailing. Employers contested each and every union demand as markets became more competitive. In response to employer recalcitrance, some union leaders began to consider more aggressive protest and bargaining tactics. In using the frustration bred by economic recession to ratchet up militancy toward management, the MGKU was at the vanguard of this trend. The strategy inevitably led not only to protracted struggles, but to industrial violence as well. For example, four MGKU members were involved in the January 1979 stabbing of industrialist N. P. Godrej, his mother-in-law, and his pregnant daughter-in-law in relation to a long-standing dispute at Godrej and Boyce Manufacturing Company.4 In January of the following year, MGKU members were involved in a strike in Taloja that began with a march and ended with several workers being shot (one fatally) and the factory being burned to the ground.5 Even more violent unions and leaders were to emerge as new economic policies took hold and more industries fell on hard times.A number of well-known union leaders in Mumbai during the 1980s and 1990s were essentially mafia dons who grew powerful by settling property and labor disputes in the dying mill sector.6 But the tendency to utilize more aggressive protest and negotiating tactics has spread well beyond the boundaries of Mumbai’s mills to affect companies in many sectors across South Asia. In just the last few years, continuing violence in Indian factories has attracted significant attention in the media at home and abroad. A recent front-page article in the Wall Street Journal, for example, reported on a dispute over contract labor in Coimbatore that ended with workers beating the human resources manager to death in his office.7 The CEO of an Italian transmission company based in Noida was killed in a similar manner following a meeting with two hundred workers that had recently been dismissed by the company.8 A prolonged strike at Rico Auto Industries, a major auto parts supplier in Haryana, INDUSTRIAL RELATIONS IN THE CONTEXT OF ECONOMIC CHANGE 29 attracted attention after it affected production in North American factories owned by GM and Ford.9 The Rico strike also turned violent after thugs hired...