GurgaonWorkersNews no.54 – January 2013
January 10, 2013
Picture: Workers in the USA
Workers’ History and Struggle against Re-Structuring at Kelvinator Fridge Factory in Faridabad (India) from the 1980s to 2000
For the January 2013 issue of GurgaonWorkersNews we translated reports of workers employed at two Kelvinator/Whirlpool fridge factories in Faridabad, which in the early 1990s accounted for 40 per cent of India’s total fridge production. The reports were published and circulated between 1989 and 2000 by the still existing workers’ newspaper Faridabad Majdoor Samachar. They describe the struggle against the re-structuring process in a multi-national white wares manufacturer, the difficult relation between workers’ initiatives and trade union representation. The reports reflect the political consciousness of workers concerning the main contradiction in capitalist society: the increase in productivity causing greater relative immiseration of the producers. The reports could therefore stand by themselves as workers’ collective memories and be passed on to workers engaged in current struggles.
The re-structuring process at Kelvinator/Whirlpool in Faridabad took place in a wider context. Under the pressure of the 1990 global slump and subsequent ‘neo-liberal offensive’ the production of fridges, washing machines and other long durable consumption goods experienced a massive concentration process and attack on the work-force in terms of speed-ups and on their wage levels. We stumbled across material written by Franco Barchiesi and Andries Bezuidenhout on the re-structuring and final closure / re-location of Kelvinator fridge factory in South Africa in the late 1990s. We also dug out older reports about the struggle against re-structuring at Bosch Siemens washing machine factory in Berlin, written by comrades of wildcat in the mid-2000s, telling the story of re-structuring and struggle since the 1980s.
If we relate these global experiences to each other a picture emerges which questions the quite wide-spread leftist assumption that ‘neo-liberalism’ post-1990 was an ‘evil policy’, a greedy scrapping of former welfare or charity or an expression of wrong political decisions on the (inter-)national level: the leftist critique of the ANC’s ‘broken promises’ in South Africa, or of the neo-liberal BJP model of ‘Shining India’ or the ‘New Labour’ ‘German Model’. We can see that it was a contradictory structural response to the ‘global profit crisis’, which had it’s main reason in the undermined, but still substantial collective power of the working class on shop-floor level in the 1980s. In the workers’ reports we find traces of this power.
At Kelvinator fridge factory in Faridabad workers organised weekly visits at management offices in rotating groups of 20 to 30 workers of different departments in order to enforce safety measures. This collectivity survived into the early 1990s: “In July 1992 a three years agreement was forged between union and management. For the workers in the lamination division the agreement meant that for a 170 Rs monthly wage increase for the first year their fixed daily target increased from 1,400 to 1,800 rotor stators. The agreement also meant that for the lamination workers the 250 to 500 Rs monthly incentive bonus was also done away with – consequently the 170 Rs wage ‘increase’ of the agreement results in 80 Rs to 330 Rs monthly wage loss. Workers have started to fight back. They say that they don’t want the new agreement, they want wages according to the old rate. Both management and union insist on the new agreement. In reaction, in January 1993, workers in the skewing, die casting, welding departments undertook some steps. In January 1993 all workers started to curb their production output to the fixed target defined by the management’s time study. Management was very troubled by this fact and started to dish out charge-sheets (for future suspensions) and issued warnings. This tug of war continued for five months when finally on 28th of May management gave in. Management started to pay the old incentive scheme of 250 to 500 Rs per months again. “
We find a similar situation in Berlin in the 1980s: “In the beginning of 1987 young second-generation Turkish workers organised a slowdown strike against the steady rise in unit-quotas at the assembly line. They did this so well that that the employer couldn’t enforce the new quotas, not even with foremen, spare men, snitches and forced transfers of workers around the factory. After a while the workers even reduced the quota. Finally they agreed on more spare men at the line. The workers learned a great deal during their struggle, they could flip the cooperation at the line at their will. When they had idle time during reorganisation they could force their ideas about how many machines they wanted to produce. Since fall 1987 they didn’t need to protest against legally obligatory overtime: they just subtracted the machines they had produced in overtime the days after from the “normal units”. “If we wanted to, we just reduced the units anytime”.”
(Bosch Siemens Hausgeraetewerk – Washing Machine Factory in Berlin)
The attack in the 1990s on this workers’ collectivity had various forms. The re-structuring on the shop-floor level by changes in work-organisation and automation was only enforceable through the ‘credit financed’ redundancy programs (severence payments, early retirement schemes), which let to a general increase in unemployment and subsequent casualisation. The old work-force was then surrounded by a growing mass of temporary employment. The threat of ‘re-location of production’ to low wage regions was in the air – to Eastern Europe in the case of Germany, Swaziland in the case of Kelvinator in South Africa – , financed by neo-liberal ‘cheap money’ politics. Most of the features of neo-liberalism in the 1990s (share-holder options, company consultancy, marketisation of inner-company relations, trade liberalisation) have to be seen in this regard of ‘softening’ workers’ strongholds.
Between 1994 and 1999 Kelvinator/Whirlpool in Faridabad reduced the workforce by 40 per cent, the company paid 50 crore Rs (1 crore = 10 million) as ‘voluntary retirement money’ to 2,075 workers. This was possible after a lost struggle in 1991 and nearly six months of lock-out of workers. We find a very similar situation in South Africa and Germany. In all cases the re-structuring was co-managed by the trade union institutions. In Faridabad the unions negotiated first the increase of production targets through incentive schemes, then subsequently the lay-off money for superfluous work-force. The NUMSA at Kelvinator in South Africa agreed to two-tier wage systems on the shop-floor in the mid-1990s in order to ‘save the company’. In Berlin, in 1992 management decreased production. In the three years which followed more than 1000 workers left the factory, mostly with seemingly ‘handsome’ compensation payment. The IG Metall union actively tried to isolate the attempt of workers at Berlin washing-machine factory to extend their protests against further layoffs in the mid-2000s. As legal and sectorial/national institutions the trade unions had no means to stop the attack of the 1990s, which lead first to their own erosion and then to their collaboration.
As a system of social (re-)production the ‘victory of capital’ in terms of undermining workers’ power and increasing productivity aggravated it’s inner contradictions. The mountains of cheap washing machines and fridges grew as fast as structural unemployment and the masses of working poor. While promising proletarian women that their entry in the wage labour market will be compensated with ‘appliances’ reducing time for housework, the ‘deluge’ of cheap washing machines in the global north was accompanied with a demise of ‘the family’ as a re-productive unit. At Bosch Siemens in Berlin 2,100 workers produced 450,000 machines a year in the mid 70′s. In the mid 90’s 2,500 workers produced more than one million washing machines and more than 200,000 tumble- dryers. During the same period structural unemployment increased by 10 per cent and temporary work proliferated rapidly. In South Africa the amount of households owning fridges increased only slightly between the end of 1970s (670,000) to 2001 (770,000), despite ‘cheap production and cheap imports’. In India the demise of the peasantry throughout the 1980s and 1990s produced such large amounts of urban poor that given the wage levels of house servants it seems uneconomic for most middle-class families to consider buying a washing machine. Even with a ‘double income’, at a monthly wage level of around 5,000 Rs for industrial workers, a new Whirlpool fridge for 20,000 Rs is out of reach.
The crisis continues. Whirlpool, announced in October 2011 to cut 5,000 jobs, about 10 percent of its workforce in North America and Europe. The crisis hits a production system which has become globalised throughout the 1990s, fridges are produced by young workers in SEZ’s in Poland under similar conditions as their are produced in other parts of the globe. Compared to the crisis in 1990/91 the crisis in 2008 has deeper structural characteristics: further discovery of ‘low wage regions a la Pearl River Delta or markets a la former Eastern Bloc seem unlikely and the Toyotist (holistic team-work with company anthem in the background) or robotic alternative has lost its sheen during the 1990s – it is back to old-school Taylorised drudgery. The following reports demonstrate that the working class was beaten during the 1990s mainly because their struggle was not able to overcome the legalistic and company-limited / national framework. This poses challenges for the future and reiterates the importance of continuous organisational and internationalist efforts like Faridabad Majdoor Samachar.
1) Kelvinator, India
2) Kelvinator, South Africa
3) Bosch Siemens, Germany
Picture: Worker in the USA
1) Kelvinator, India
In India 4.1 million fridges were produced in 2005, fridges form the second biggest sector in durable consumer goods. While in the US per capita spending on air-conditioning and cooling appliances was 200 USD in 2005, it was 0.25 USD in India. Less than 15 per cent of households own a fridge.
*** Time-Line of Kelvinator/Whirlpool Re-Structuring
Kelvinator starts production of fridges and electrical parts in two factories in faridabad and nearby Ballabhgarh.
Major workers’ struggles in Faridabad, e.g. strike and police-shooting at Goodyear in 1973. During time of emergency 1975 to 1977 in many factories work-loads were increased, while outside of the factory the police enfoced slum demolitions and sterilisation programs. At Kelvinator a ‘incentive scheme’ was launched in 1976. After emergency was lifted, major workers unrest flared up, culminating in a police massacre of over 100 workers in 1979.
Indian economy dips into debt crisis. The state tries to subsidies exports and to keep up import tariffs, partly an expression of the stalemate on the shop-floor. Re-structuring and changes in production process is regulated by state, company and trade union negotiations. In the case of Kelvinator, the company applied for the increasing the production capacity of refrigerators from 200,000 to 500,000 in 1983.
In June workers went on strike against a new wage agreement which had been imposed by the former trade union leadership. In response the company kicks out 450 casual workers. Contrary to their promises the new agreement forged by newly elected leaders contains three different professional categories and an increase in workload. Now workers are supposed to manufacture 2,300 instead of 1,700 fridges per day and 2,500 instead of previously 2,000 compressors. In September 1989, the company raised 10 crore Rs for undertaking modernisation (new machinery), increasing capacity by 20 per cent to 600,000 fridges per year.
India external debt crisis and adjustment program (casualisation, ‘liberalisation’ etc.)
In April, 80 Kelvinator workers are suspended after they raised voice against higher work-load and lower basic wages. In May the Kelvinator management declares a first lock-out, it lasts over 56 days. There is no union response, no solidarity actions. Workers go back inside leaving 125 work-mates suspended. In October the Company again declares a lock-out, which lasts from 3rd October till 2nd of December.
In August new productivity/wage agreement is settled, containing higher work load, and less incentive payment.
In January workers reduce output in response to last year’s agreement. At the end of the year Kelvinator announces net loss for 1993.
Electrolux buys into Kelvinator with 12 per cent shares, but finally opts out. Whirlpool shows interest.
Whirlpool acquires Kelvinator India Limited. Whirlpool then owns three manufacturing facilities at Faridabad, Pondicherry and Pune. Whirlpool has manufacturing operation in 13 countries. Between 1994 and 1999 Kelvinator/Whirlpool India reduces the work-force by 40 per cent, from 8,000 to 5,000. In Faridabad the company spends 50 crore Rs (1 crore = 10 million) on severance payments for 2,075 workers. The first Voluntary Retirement Scheme (VRS), agreed on by the union, was launched in May 1995. In September 10995 a short strike by two dozen operators in the compressor department stops production of 4,000 workers in the rest of the factory.
Whirlpool sells manufacturing units for compressors to Tecumseh and also gets rid of the automotive division, both part of the Faridabad factory. In the compressor unit around 1,500 workers used to be employed. Now around 2,600 workers are left in Faridabad, the numbers of temporary workers increases.
In February management and trade union announce a new agreement, containing further reduction of work-force. The production of some parts has been outsourced to suppliers. management announces that in March 1,000 workers will have to go. management refers to the new fridge plant in Ranjangaon where supposedly only 330 (casual) workers are employed. In March it becomes clear that the union has agreed to a daily production target of 2,800 pack re-fridgerators; the old incentive scheme which paid extra once 1,875 fridges were produced has been abolished. The agreement also says that future VRS schemes will be supported by the union after negotiations. Whirlpool management decides to pay 5 Rs extra per worker, but fixes this sum as an extra due for the union. At the same time Whirlpool tries to cancel the registration of a staff (white collar) union, which was formed under the threat of further dismissals.
Electrolux Kelvinator washing machine plant in nearby Gurgaon is supposed to be relocated to Butibori, where the factory is automated to a higher degree.
Another 511 workers at Kelvinator/Whirlpool in Faridabad are forced to / decide to take VRS.
*** Kelvinator Workers’ Reports 1980s to 2000
Memories on Collective Steps
(published in: Faridabad Majdoor Samachar, June 1995)
There is a close relation between practice and memory.Therefor our memories have a considerable impact on the social present and near future. There is a fierce struggle over memories in this society. Which are important memories for workers? How can we conserve/rescue them or keep them alive? What kind of lessons can we draw from memories? In order to become conscious of this a conscious exchange of memories is necessary. In collective steps of workers two processes are intertwined: 1) Workers frequently undertake steps by their own initiative; 2) Once a workers’ initiative gets going leaders or wanna-be-leaders jump on the train. When a section of workers is able to enforce a demand through their own activity, and when management assumes that other workers will raise similar demands and might undertake similar steps, management prefers to give concessions to workers through leaders. While in the former case the enforced demands give importance to collective strength and struggle, in the latter case leaders are garlanded for having ‘won concessions’. In the following short conversations with 10 to 12 workers employed at Kelvinator this dynamic becomes fairly clear.
In the machine shop the grinding machines created a lot of dust pollution and respiratory problems troubled a lot of workers. Despite frequent complains the managers and (trade union) leaders did not do anything about it. In 1985 the grinding workers decided that they would all gather once per week and go to the safety manager to demand better dust protection. Workers started to meet collectively and surrounded the safety manager as soon as he would enter the machine shop. After three, four month, in 1986, Kelvinator installed dust exhaust fans at each grinding machine.
In the first plant the ceiling in the compressor division is very low. There are also no windows or ceiling lights. The 300 workers in this department roast in the heat like tandoori chicken. When workers complained the manager in charge said that these conditions have to be accepted as given and did not say anything more. In response, in 1990 the workers in the compressor division all gathered and encircled the compressor division manager. Kelvinator management later on raised parts of the ceiling and installed ceiling fans.
Suffering under the work-load workers had put forward the demand of free gur (raw sugar) provision several times. In 1986 the workers in the machine shop decided to gather and to go to the production manager in order to re-enforce the demand. Workers from the drilling, grinding and other departments got together in several groups of 20 or 25 and one after the other these groups would go to the production manager. Three or four month later, management tried to settle the dispute by giving gur to a handful of workers. But workers kept their group visits at the management office going. In 1988 management agreed on providing 2 kilos of gur per month to each worker in the machine shop. As a result workers in other departments raised the same demand. As a response in 1990 management called the leaders and let them announce that gur would be provided for all workers.
Workers in the drilling and other metal processing departments had their hands exposed to cooling oil, which caused skin ailments. In 1983 workers of these departments met shift-wise and went collectively to the safety manager. After some month Kelvinator management decided to hand out hand-protection cream. Similarly, in 1980 the workers in the grinding department organised in small groups per shift and went to the production manager to demand working shoes. At the beginning the manager started to threaten the workers, but they continued their collective visits. They kept this up for a long time – in 1983 Kelvinator management gave working shoes to the employees in the grinding department. In other departments similar demands came up, in 1988 the trade union leaders announced that there will be shoes for all Kelvinator workers.
Faridabad Majdoor Samachar
By means of the incentive scheme, the Kelvinator management succeeds in squeezing its workers to the max, even those permanent workers who are employed at the company for 5 – 10 – 15 years. In the February 1989 issue of the journal ‘Business World’ it says that Kelvinator increased the sales by 33 per cent in financial year 1988, profits more than doubled during that period. After having pushed back the old (union) leaders, who had been in cahoots with management, the Kelvinator workers expressed their anger against oppression and exploitation in the company.Production stopped at the plant due to dispute over personal incentive payments. Unfortunately the new leaders seem to follow the path of their predecessors.
Faridabad Majdoor Samachar
Some workers, knowingly or not, divert the attention of the workers from the main issues of incentive schemes, lower wages and higher work-loads towards irrelevant conflicts and thereby weaken their strength and play in the hands of management. Labour department and management have taken the new (union) leaders for ‘negotiations’ to Chandigarh.
Faridabad Majdoor Samachar
On the 29th of June the Kelvinator workers engaged in an actual strike for the first time and and prove their will to fight. If workers win their first battle, it will serve as a pillar for the coming disputes – and management is well aware of this. Therefore it seems that with the very first step taken by the workers, management prepares for a long dispute. Given that the in this case the ‘carrot policy’ does not appear to work, management goes for the stick and prepares for crushing the workers’ struggle. Their first step was to kick 450 casual workers out from the factory, justifying it by saying that these workers had not shown up for work on the 29th of June.
Faridabad Majdoor Samachar
After the strike of the 29th of June the new leaders had diverted some of the workers’ force, but nevertheless, when faced with workers’ discontent management entered quickly into a three years agreement which meant some crumbs for the workers. After the strike the workers themselves did not undertake any steps in order to increase their strength. During a gate meeting the new (union) leaders openly accused each other for various things, which spread hopelessness amongst the workers. In order to strengthen the position of the workers in this situation a general assembly would have been necessary – but the workers did not undertake this step. Instead an atmosphere of accusations and rumors prevails. The normal workers at Kelvinators watch this scenery and think that it concerns some one else, but not them. This situation is what the Kelvinator management had wished for, given the rather precarious condition it finds itself in. The management has been successful in settling an agreement which suits them.
The new leaders have broken their promise. The three-years agreement (still) contains three different professional categories and an increase in workload. Now workers are supposed to manufacture 2,300 instead of 1,700 fridges per day and 2,500 instead of previously 2,000 compressors. Naturally, management is happy about this agreement, as naturally as workers are angry – but to say “we have to get rid of these leaders, as well” is not enough. To hope that new (or any) leaders will change the situation for us and to see these disputes as a ‘company internal matter’ are points of views we have to get rid of.
Faridabad Majdoor Samachar
Kelvinator is amongst the well-known and reputed factories in Faridabad. Around 40 per cent of all fridges made in India are manufactured at Kelvinator Faridabad. The company boasts that last year they sold 529,000 fridges and that this year they will sell 100,000 fridges per month. On the other hand, after workers had been raising their voice in April and the subsequent suspension of in total 80 workers, the numbers of suspended workers is increasing at a daily rate. The main aim of Kelvinator is to succeed in the competition with other fridge manufacturers, and for this goal the company has to suck out its workers. Night-shift bonus and lower basic wages for a higher work-load are two sides of the same coin. The question of low wages and work-load has been an explosive issue for some time. In 1989 workers got rid of old leaders and elected new ones, but the problem remained the same. Nowadays the thought circulates amongst workers that instead of a factory union, may be an external union, once management is forced to recognise it, could give them some relieve. The wave of suspensions over this back-and-forth is still rolling.
Faridabad Majdoor Samachar
The lock-out declared by management on 21st of May is a means to control the growing discontent amongst workers and to deal with the current market conditions.
Faridabad Majdoor Samachar
The lock out declared on 21st of May still continues, it’s now beginning of July. The workers, who had thought the new middlemen as all powerful and who now see their impotence facing the lock-out, still continue to put their hope in them. The all powerful middlemen did not have the courage to break the common capitalist law in form of section 144 [unlawful assembly] and so, from the perspective of workers’ movement, two valuable weeks have been wasted. The middlemen got tangled up in the assurances of the DC and by establishing a ‘blind unity’ of the Kelvinator workers, they undermined the potential for strengthening the struggle. Entering the second months of lock-out and having the feeling of being trapped in a dead-end, even amongst those workers who perceive the middlemen as all-powerful the number of those who swear at them increases. The combination of the leaders call for a ‘blind unity’ and the major hurriedness leave the workers in a state of confusion. This gives new life to the Kelvinator management – and a considerable share of the workers run danger of getting trapped in the to and fro of these middlemen.
Faridabad Majdoor Samachar
The Kelvinator workers spoke in big words about the HMS labour leader who represents the Escorts workers. On 21st of May Kelvinator management attacked the workers by locking them out. There was no response from the Escorts workers or their union. Only after fifty days of lock-out, some unions put up big posters and called for a general assembly at 5 p.m. – at Escorts plant shift ends at 4:30 pm.. Out of 12,000 workers of the various Escorts plants not even 50 workers came to the meeting on 10th of July. Leaders of HMS-BMS-AITUC-CITU hold fiery speeches at the meeting, which was attended by 5,000 to 7,000 workers, most of them from Kelvinator. The union leaders said that the first general assembly (after 50 days of lock-out!) is prove of the great unity of workers and that the leadership will come up with a struggle program within the next two, three days. On 18th of July, having found no answer to the management weapon of lock-out, workers went back inside the factory, leaving their 125 suspended work-mates outside. In order to get out of a dead-end, workers had to bent down, but they are not broken – the tool-down strike against police repression is a proof of that. The Kelvinator workers don’t want to repeat the lessons of made by USHA Spinning workers, Bhartiya Electrics workers, Hyderabad Asbestos workers etc. during the last decade, who had been dispersed and then beaten in small numbers. The back-and-forth outside the factory gave state and management enough excuses to make use of police and thugs. At Kelvinator it now looks like the struggle will be a long drawn out one.
Faridabad Majdoor Samachar
After management opened the factory again on 18th of July after 56 days of lock-out it became clear that their initial calculations failed. Workers had to bent a bit, but they were not broken. One of the results was that the chief executive was sent into holiday and a new leading manager from Maruti took over. management knows that they will have to squash the workers unity. Before paying the September wages management started to provoke the workers and found an excuse to impose a second lock-out, which lasted from 2nd of October till 3rd of December. This time management had been consciously opting for the attack in form of lock-out. The union leaders had first colected 400,000 to 500,000 Rs in contributions, but then infights started again amongst them. Workers have not found an answer to the management’s attack.
Faridabad Majdoor Samachar
At the Kelvinator lamination plant (23 Milestone Mathura Road) 300 workers are employed. The Kelvinator control division, cash registry, copper wire and micro oven plant is also situated on the premises. In the Kelvinator Ballabgarh plant another 700 workers are employed. In the lamination division, workers were given an individual incentive (bonus) if they produced more than the fixed daily target of 1,400 rotor stators, a part used for fridges. This incentive bonus can amount to 250 to 500 Rs per month. In July 1992 a three years agreement was forged between union and management. For the workers in the lamination division the agreement meant that for a 170 Rs monthly wage increase for the first year their fixed daily target increased from 1,400 to 1,800 rotor stators. This is connected to the fact that the fixed daily target for the 4,000 workers in the main plant in Industrial Area has been increased from 1,400 fridges to 1,800 fridges per day. The agreement also meant that for the lamination workers the 250 to 500 Rs monthly incentive bonus was also done away with – consequently the 170 Rs wage ‘increase’ of the agreement results in 80 Rs to 330 Rs monthly wage loss. Work load has been increased, wages cut. Workers have started to fight back. They say that they don’t want the new agreement, they want wages according to the old rate. Both management and union insist on the new agreement. In reaction, in January 1993, workers in the skewing, die casting, welding undertook some steps. According to the time study conducted by management in the skewing department the fixed target used to be 134 pieces, although workers were regularly producing 270 a day, in die casting it was 330 and 600, in welding 420 and 650 respectively. In January 1993 all workers started to curb their production output to the fixed target defined by the management’s time study. Management was very troubled by this fact and started to dish out charge-sheets (for future suspensions) and issued warnings. Management tried to spread the fear of closing down the company. The union leaders started to threaten-intimidate the workers in the lamination plant. But the workers continued to produced the fixed target and kept quiet. This tug of war continued for five months when finally on 28th of May management gave in. Management started to pay the old incentive scheme of 250 to 500 Rs per months again. The lamination workers receive the 170 Rs increase of the 1992 agreement on top of it. “If there is an agreement, we ought to accept it, don’t we”. So if workers are not happy with an agreement or any other formal-legal settlement, disagreeing workers can undertake steps together!
Faridabad Majdoor Samachar
The workers hired through contractor employed at Kelvinator are not paid in time. In response to not having been paid their August wages, on 24th of September 1994 the temporary workers gathered and went to the office of the works manager. He got startled and surrounded by over one hundred temporary workers he promised that wages would be paid the next day. August wages were finally paid on 27th of September.
Faridabad Majdoor Samachar
Automatisation not only replaces 16 workers with 1 worker at an automated machine, also later the repairing of the fridge becomes more difficult. you don’t have nuts and bolts or single parts, but moulded and glued parts. According to management there are 74 manager, 204 executive and technician, 46 clerks, 1908 permanent and 390 casual workers employed in Faridabad. According to management in the Whirlpool factory in Pondycherry there are only 195 casual workers and in Puna 221 casual workers. The production runs well, 2,800 to 2,900 fridges a day, but management complains that this is too little. By end of the year management wants to sack 1,500 workers. The union has already agreed to VRS.
Whirlpool tries to cancel the registration of a staff union
Faridabad Majdoor Samachar
A temporary worker at Kelvinator/Whirlpool: they pay commission and minimum wage to the contractor, but the contractor pays only 45 Rs a day to us; the permanent workers have their own canteen, they get cheap food there, we have a separate canteen and only get tea for the normal price; we are not allowed to eat outside during lunch break; we don’t get a weekly day off; we don’t get ESI or PF; even if we work eight hours overtime (double-shift), they only pay 45 Rs; We gathered and went to the personnel manager, in order to coplain about the contractor; we shouted slogans; the personnel manager refuse do do anything against the behaviour of the contractor
Faridabad Majdoor Samachar
A Whirlpool worker who had taken VRS: wherever I go and ask for work they say that the normal work-times are 12 hours a day, plus overtime; they pay 1,200 to 2,000 per month, for 12 hours days, 7 days week. At Kelvinator we earned more for an 8-hours day, with a weekly day off.
Picture: Strike in the USA
2) Kelvinator, South Africa
Similar to India, South Africa was a developmental industrial state from the 1950s onwards, showing parallels in terms of peaks of industrial working class struggle and dips of crisis. During the 1970s growth in both manufacturing and agriculture stagnated. In South Africa the first recession of this period occurred in 1976, following dramatic oil price hikes – both India and South Africa heavily depend on oil imports. In the industrial outskirts of Johannesburg the high-time of workers’ violent attack on exploitation and racial oppression was in the early and mid-1970s, i.e. the Durban strike in 1973. The Soweto uprising of 1976 happening at a time when India was under the blanket of State of Emergency. The general strike in Faridabad, India and the police massacre in 1979 happened at a time when in South Africa the regime tried to contain unrest by legalising trade union representation. In South Africa, similar to India in the early 1980s external and state debts increased in relation to productive investments. As a result of these policies, South Africa’s net indebtedness to the international banks increased sharply, and about two-thirds of its outstanding loans in 1984 had a maturity of one year or less. South Africa was hit with a major foreign debt crisis in 1985, when a group of banks withdrew substantial credit lines. As a result, the value of the rand dropped precipitously, and the government temporarily closed its financial and foreign-exchange markets. Unable to meet debt obligations so suddenly, the government declared a standstill on repayments. In India this was to happen five years later. Since then both states have become ‘role-models’ of so-called neo-liberal politics: the ‘opening of the national market’ facilitated or was used as explanation for the attack on workers in form of casualisation of employment.
“During the 1990s, the East Rand region of Jo’burg [where the Kelvinator factory was located] has experienced rapid productive and labor market changes in an increasingly competitive scenario. Large conglomerates, which have historically dominated the area, used layoffs, outsourcing, and contingent employment in response to the pressures of market liberalization. Since the mid‐1970s, the East Rand (now the Ekurhuleni Metropolitan Municipality) has been a stronghold of the South African labor movement. The unionization of a rapidly growing African working class, largely made of contract migrants from apartheid’s rural “homelands,” accompanied the rise of the region as the country’s manufacturing core. In the 1990s, layoffs became generalized: approximately eighty thousand manufacturing jobs were lost in the East Rand between 1988 and 1999. (…) The country’s main industrial union, COSATU‐affiliated NUMSA, lost 45 percent of its East Rand members between 1989 and 1999. (…) Equally important in the decentralization of production was the shift of labor recruitment towards temporary employment agencies (“labor brokers”), which bring their own employees to work in companies that no longer employ them directly, thus further fragmenting employment contracts and collective bargaining coverage inside workplaces.” (Barchiesi)
Barlows appliances, the original stove and fridge manufacturing company located in Alrode/East Rand, which was taken over by Kelvinator in the mid-1990s, had its original expansion as an arms and army supply manufacturer during the Second World War. Barlows Appliances was first taken over by a financial investor in 1995, during that time there were discussions with the trade union NUMSA for an employee take-over of the factory. Instead management and NUMSA negotiated retrenchment packages, as part of attraction for further investments 800 workers were sacked. Kelvinator finally bought the company in 1996 and re-hired the sacked workers, under the condition that they would invest their severance pay into the company, as employee shares – a total of 20 per cent of the shares were held by these workers. In addition to this ‘participation’ NUMSA agreed to a wage freeze, a no strike pledge and to a two-tier wage system on the shop-floor: the newly hired 170 workers were paid only the minimum wage settled by the general sector contract, not the company collective contract. Originally this two-tier system was limited to a year or two, but the company extended it, which caused a certain radicalisation amongst workers and shop-stewards.
“Kelvinator management agreed that continuing the wage differential was ‘not a great strategy’, since it created a potential for disruption. It is, however, interesting to quote Simon Koch’s analysis [director]: ‘It was a mistake to employ workers with matrics. I thought they were smarter and I wanted to give them a chance, but labour intensive production was not suited for them.’ This statement recognises that hiring educated and conscious workers into a production process based on routinised manual labour ad lowering wage levels could only intensify factory militancy among what Koch describes as ‘disruptive young workers with nothing to lose’.”
The ‘older ‘share-holding’ workers supported ‘new workers’ demonstrations, partly because they had not been paid any dividends since 1996. Under the new director Kelvinator fridge market share increased from 8 per cent in 1996 to 23 per cent in 1997, but allegedly no profits were made. Production was pushed from 200 units per day in 1996 to 1,000 by the end of 1997 with target of 1,300 for following year – here it is unclear whether these figures refer to fridges or cooking stoves. Kelvinator management started to complain about companies like Whirlpool starting to ‘dump’ cheap fridges into the South African market and other fridge manufacturing companies using ‘cheap labour’ in Swaziland and other ‘under-developed regions’ in South Africa, where workers’ wages were 1/5 of the Kelvinator workers wage in Jo’burg. Kelvinator was finally liquidated in 1999, around 1,200 workers lost their job. Production was taken over by first Defy and then Palfridge, which now manufactures the Kelvinator brand in low-wage region of Swaziland. In 2004 the South African government dropped import tariffs from 25 per cent to 0 per cent for fridges imported from the EU.
Another study written by Bezuidenhout in 2005 looks at the working and living conditions at the Defy white goods factory in Ladysmith, South Africa and compares the situation of workers there with white goods workers at LG in South Korea and Elekrolux in Australia. “In each of these plants, workers are faced by insecurity brought about by corporate restructuring, including the relocation of production, work intensification, and casualisation through outsourcing. We enter the ‘hidden abode of reproduction’ and the communities in which these households are located, to examine the impact of restructuring on workers’ lives. We show how households in Orange, Changwon and Ezakheni are structured differently and respond differently to these external pressures as they search for security.”
For us some of the following comments of temporary workers at LG in Korea show a lot of commonalities to the situation of white goods workers at LG in NOIDA, an industrial zone close to Faridabad. The LG plant in NOIDA opened in 1998: ‘The orders for production is very precarious and fluctuates. Because I belong to the outsourced company as a dispatched worker, I am so worried about my unstable employment situation. I do not know how long I can work.’ Or: ‘LG company wants to utilize the outsourcing company with big flexibility … If LG stops making orders from [the company] where I work, my employment agency can dismiss me.’ According to our experiences in Faridabad, fear of job loss is actually more prevailing amongst permanent workers, while a new generation of temporary workers demonstrate time and again that they are no victims, but that they give the bosses a hard time. Just read the report of temporary workers’ wildcat action in one of LG supplying companies (Globe Capacitor) in Faridabad in 2012 and you will see that instead of having to be pitied, these guys know how to kick up shit:
Franco Barchiesi: Industrial Unionism: Manufacturing Workers in the East Rand/Ekurhuleni Region in the 1990s
Andries Bezuidenhout, Rob Lambert and Edward Webster
Picture: Workers in the USA
3) Bosch-Siemens Washing Machine Factory, Germany
Wildcat Germany in 2005
“…the only thing they can expect from us…”
How quickly things change. It was only 40 years ago that major household appliances were mass-produced in Western Europe, but there are already few factories left and most have been shut down or relocated. It’s nothing new that almost entire branches go abroad. What is new is that no new branches arise which hire significant numbers of people. Between 1990 and 2003 roughly 330,000 jobs were relocated from Germany to Eastern Europe. This was around 25,000 per year. Through the worldwide relocation of production, Germany loses up to 50,000 jobs each year. With around 38 million employees in Germany this is a little more than 0.1 percent a year. In comparison, the little cyclical boom in the year 2000 increased employment by 700,000.
The first washing machines, refrigerators and stoves were produced as industrial mass-products in Italy for the (West-)European market in the late 50s and early 60s. Before the 70s, companies which were limited to “their” national market were more profitable than afterwards, when all of them had to expand. They were threatened by companies which tried to compensate massive class struggles in production with aggressive price competition. As a result Bosch/Siemens (BSH=Bosch Siemens Hausgeräte) became a “cheap Jack”, churning out low-grade products at discount prices. In the second half of the 80s the factory in Berlin/Spandau (Hausgerätewerk Berlin, HWB) had to deal with product return rates of 15 per cent and a similar degree of sick leave. We often wrote about struggles in this factory in Wildcat, and some of us had worked there. Now this factory is supposed to be closing.
A branch is migrating
More people work in industry in Germany than in the most developed capitalist countries. 27 percent of German employees worked in industry in 2003, five percentage points above the numbers in France and ten percent above the numbers in Great Britain; in the USA even less people work in industry. This is the fundamental reason why Germany has always been the export world champion. But like elsewhere in Europe in Germany the numbers sunk steadily in the past 15 years (in 1992 it was 35 percent). In the German electrical industry the amount of employees sunk in the past 15 years by about one fifth (1991 1,087,331; 1993 980,000 with less than 74,000 in East-Germany; by June 2005 less than 810,000). But the electrical industry means everything from the production of a hair dryer to a generating plant. More important are the movements in between the generic term “electrical industry”. For example the relocation of consumer electronics had already started to take place in the 70s and 80s, during the heyday of the major household appliance. Today conventional telephones, small household appliances like mixers, and consumer electronics in general are no longer produced in Germany. The rationalization in household appliance production in the second half of the 80s and the increasing internationalisation and concentration of the sector since the 90s lead to the steady decline of jobs in Germany (in the beginning of the 90s the turnover was getting higher, since then that too has sunk). The production of washing machines in Germany increased from 1.6 million pieces in 1982 to 2.8 million in 1992 (record rates during the re-unification boom). Between 1987 and 1989 US companies got into the European production of household appliance, for example Whirlpool had taken over Phillips and Bauknecht. In the beginning of the 90s Bosch/Siemens had bought Spanish and Turkish household appliance producers. After that Electrolux took over Italian companies and AEG in Germany and has since been the world market-leader. BSH is number three in the world ranking (worldwide 34,000 employees, 14,000 still in Germany; 16,000 three years ago) and makes more than three-quarter of its turnover (of 6.8 billion Euro) abroad. Of the 42 factories, seven are still in Germany, the others in Spain, Greece, Latin America, USA, Poland, China and Turkey. In the last few years Turkey has become probably the most important location for production of major household appliances in the world. In 2002 the Turkish Arcelik group took over Blomberg (the last German producer of household appliance except Miele), two years later Blomberg stopped the production of washing machines in Germany. Miele too, which had marketed its expensive products with the label “Made in Germany”, is going to get rid of every tenth employee of the 11,000 in Germany until 2007. The core segments of the household appliance sector have being shifted (i.e. for 15 years there has been no development in cooling units and no big progresses are expected; the lowering of consumer prices, the increase of laundry and the shift to electronic control was for washing machines a key development in the last few years, in the future there will be only gradually advances). What happened with electrical goods in Germany is now taking place in the production of top loader washing machines; in about two years no top loader will be produced in Germany anymore. It happened in France with the production of refrigerators, in 1960 there were 20 producers of refrigerators, in 1967 only Thomson-Brandt was left, and since 1993 no refrigerators are produced in France anymore. Except the Miele factory in Gütersloh there are only three and a half washing machine production locations in Germany: Bauknecht in Schorndorf – “threatened”; AEG in Nürnberg – “threatened”; Bosch/Siemens in Berlin and Nauen close to Berlin. The plant in Berlin is supposed to be closed by the end of 2006. Officially the plant in Nauen is suppose to produce the new generation of washing machines, but it has been made known that doubts exist over the continued existence of Nauen as a location for production. The decision “for Nauen” depends on the increase of subsidies through the provincial government in Brandenburg.
Crisis of production
In the production of household appliances in the last 40 years the typical mass-production worker compassion was employed: unskilled assembly workers who were hired from rural areas. Maybe one forth were women, up to 90 per cent migrant workers. This reservoir of labor is exhausted in Western Europe. Significantly no workers with Turkish descent of the third generation are working at Hausgerätewerk Berlin. For them this kind of work is completely uninteresting. The employer is able to get a little time advantage when they build factories in rural areas with high unemployment rates in Eastern Europe. But these areas are in industrially shaped regions. The situation they are attempting to escape appears quickly. In general the employers are looking to leave those regions in 10 to 15 years, when the wages will be “too high” or no “appropriate labor” will be available.
Crisis of consumption good
In general the employers make the “cost pressure” responsible for relocation. In 1992 40 per cent of all washing machines sold in Germany cost less than 600 Euros, by 2004 it was over 80 per cent! In 1987 1300 DM represented the average delivery price of a washing machine in Germany, in Italy it was 580 DM. Correspondingly in Germany in 1987 there was 12.3 billion DM worth of major household appliance in Italy, in it was Italy only 7.3 billion but Italy produced double the amount of washing machines than Germany (in Germany over two million, one third of those in HWB!). Not many people pay these high prices: firstly because “cheap brands” like Eko and LG deliver almost the same quality, and secondly because the German brands lost their leadership in technology (they had it with ecological criteria but they didn’t develop new ones). In the past years this development was aggravated, because of sinking wages and shrinking domestic markets in Germany. There is no “national protection for brands through label oriented behavior of consumers anymore”, not only because of the processes of industrialization in Turkey, but also because of increasing single-households and increasing rates of divorces: a washing machine is no longer a long term purchase.
The household appliance plant in Berlin
From 1960 to 1980 the amount of employees working in electrical plants in West Berlin halved to 66,000. But it was still the biggest branch in West Berlin. After re-unification and after the decline of the “re-unification boom” a clear structural change of industry in Berlin begun. In May 1992 the whole of Berlin had 223,000 industrial employees; this was less than 21.4 per cent a year before, in April 1993 only 152,900. The developments lead to a strong increase of the unemployment rate. Since January 1992 the Western part of Berlin has the highest unemployment rate of former West Germany.
History of the plant
For about 50 years washing machines were produced in Berlin/Spandau, at first little units together with other household appliances. With the acquisition of the Constructa Company and the amalgamation of Bosch and Siemens in 1966, they began to produce only washing machines in Berlin/Spandau. In the mid 70’s 2,100 workers produced 450,000 machines a year. In the mid 90’s 2,500 workers produced more than one million washing machines and more than 200,000 tumble- dryers. The increase in unit-production took place in the 80’s: from 600,000 devices in 1982 up to one million in 1986. The units of washing machines and dryers produced per year per worker doubled from 1978 to 1988 (from 205 to 442). In the beginning of 1987 young second-generation Turkish workers organised a slowdown strike against the steady rise in unit-quotas at the assembly line. They did this so well that that the employer couldn’t enforce the new quotas, not even with foremen, spare men, snitches and forced transfers of workers around the factory. After a while the workers even reduced the quota. Finally they agreed on more spare men at the line. The workers learned a great deal during their struggle, they could flip the cooperation at the line at their will. When they had idle time during reorganisation they could force their ideas about how many machines they wanted to produce. Since fall 1987 they didn’t need to protest against legally obligatory overtime: they just subtracted the machines they had produced in overtime the days after from the “normal units”. “If we wanted to, we just reduced the units anytime”. At this time the vanguards of the struggles became, in their own words, “professional saboteurs”. More and more machines had scratches, planned or “just because” (it was possible to buy such machines on a discount at the factory-shop). Once the early shift came to work and every single machine was scratched. Now and then the line stood still because of sabotage of the “robots” or because of a cut drive belt. Despite the fact that a spare man (a worker who replaces other workers when there is a problem) supervised the drive belt it was sometimes broken three times a day. “Then they put a security guard at the line for three weeks, he was walking around the belt. He had to listen to a lot of stuff from the workers! But it didn’t help. They just didn’t understand how we did it.” At late shift the spare man had to stay until every worker left the factory. Nothing worked. In spite of repeated transfers of the suspects, nothing helped.
The management never tried to raise the quotas at this line; instead they transferred the workers through the whole factory. In 1992 they decreased production. In the three years which followed more than 1000 workers left the factory, mostly with very good compensation payment.
Since the mid 60s the HGW in Berlin was now and then an object of investigation for industrial sociologists and work scientists. In the end one had the impression that they became desperate: all attempts at “humanization”, “team-work”, and all of those buzzwords failed. Today when a system of team-work rules the line which largely corresponds to those dreams of the work scientists, the plant is in line for closure.
“In sum one can assert that almost all serious difficulties with personnel are caused by the execution of the Taylor System.” Wexlberger, former director of industrial science at HWB
This is an article from Wildcat no. 74, summer 2005. Further reports about the struggle against redundancies, the debates about factory occupation and a ‘workers’ collective tour’ through Germany, see:
Picture: Sign for Necessity of Proletarian Non-Legalistic Internationalism