India: Rotten conditions for autoworkers worsen, and rebellion grows

[This week’s militant rebellion and workstoppage of autoworkers at the Maruti Suzuki plant in the Delhi area has brought with it typical (unsubstantiated) bourgeois media speculation about Maoists or Naxalites sparking the whole thing off.  But, as Mao Zedong said, “Where there is oppression, there follows resistance.”  It is the oppressive character of capitalist exploitation itself that gives rise to the rebellion of the workers–at times, beyond the limits of trade unionist arrangements.  In this article, by RUPE’s journal “Aspects of India’s Economy” the changing conditions the autoworkers are confronting, are described. — Frontlines ed.]

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Behind the Present Wave of Unrest in the Auto Sector

“Motown braces for wage revisions after three years”, reads a headline in the Business Standard on April 6, referring to wage negotiations in the Gurgaon-Manesar auto belt. “Haridwar factories brew Manesar-like labour situation” warns another headline in the same paper, reporting strikes at two major auto parts suppliers. The Reserve Bank of India, in its latest “Monetary and Macroeconomic Developments”, warns of the “pressure on generalised inflation from sustained increase in wage costs”.

What is happening to industrial wage levels? Is the prosperity of which the ruling establishment speaks now ‘trickling down’ to workers? Do workers now have the upper hand, and are they grabbing a bigger share of value added?

The last few years have indeed seen a rise in labour unrest, particularly in the auto and auto parts sector. Among the prominent instances are: Mahindra (Nashik), May 2009 and March 2011; Sunbeam Auto (Gurgaon), May 2009; Bosch Chassis (Pune), July 2009; Honda Motorcycle (Manesar), August 2009; Rico Auto (Gurgaon), August 2009, including a one-day strike of the entire auto industry in Gurgaon; Pricol (Coimbatore), September 2009; Volvo (Hoskote, Karnataka), August 2010; MRF Tyres (Chennai), October 2010 and June 2011; General Motors (Halol, Gujarat), March 2011; Maruti Suzuki (Manesar), June-October 2011; Bosch (Bangalore), September 2011; Dunlop (Hooghly), October 2011; Caparo (Sriperumbudur, Tamil Nadu), December 2011; Dunlop (Ambattur, Tamil Nadu), February 2012; Hyundai (Chennai) April and December 2011-January 2012; and so on.

Unrest is not limited to the auto industry, but it has been centered there. The auto industry has grown very rapidly in the last few years: From 8.5 million vehicles (including two wheelers, three wheelers, passenger vehicles and commercial vehicles) in 2004-05, production has risen to 20.4 million in 2011-12. Passenger car production has risen from 1.2 million vehicles in 2004-05 to 3 million in 2010-11 (and probably further in 2011-12). The auto industry is a well-known ‘success story’ of the rapid growth of the last decade, and the Government is set on making India a global manufacturing ‘hub’ for automobiles, with the help of large State subsidies.1

On the other hand, it is a well-kept secret that real wages in the auto sector – i.e., after discounting for inflation – actually fell continuously in the period 2000-01 to 2009-10. (The latest data available from the Annual Survey of Industries [ASI] are for 2009-10.) True, annual wages in the motor vehicles industry rose in nominal terms from Rs 79,446 in 2000-01 to Rs 88,671 in 2004-05 to Rs 109,575 in 2009-10.

However, the Consumer Price Index for Industrial Workers (CPI-IW) consistently rose more steeply than wages. So real wages in the auto industry fell 18.9 per cent between 2000-01 and 2009-10. (See Chart 1.) Continue reading