GurgaonWorkersNews – Newsletter 47 (February 2012)
Gurgaon in the industrial belt of Delhi 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-waged classes which end up in the traffic jam on the new highway between Delhi and Gurgaon. Thousands of young proletarianised post-graduates 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 up-rooted by the rural crisis stitch and sew for export, competing with their angry brothers and sisters in Bangladesh, China or Vietnam. And the rat-race will not stop; on the outskirts of Gurgaon, new industrial zones turn soil into over-capacities. 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 February 2012 issue you can read
1) Proletarian Experiences –
Daily life stories and reports from a workers’ perspective
*** Everything but Accidental – Fatal Accident at Machino Plastics Ltd. and a Report by an Omega Construction Equipment Worker -
In January 2012, a roof in the factory of Machino Plastics in Manesar collapsed under “heavy machinery and raw material set-up” – two workers were killed on the spot and several others seriously injured. Last summer, a work accident in the Faridabad plant of Omega Construction Equipment nearly killed Dinesh Kumar. Although he worked for the company since 25 years as a permanent employee and despite the fact that – unlike the majority of workers in Delhi-Faridabad-Gurgaon – he had an ESI medical insurance card, the post-accident treatment by both company and medical system turned out to be a nightmare.
*** The Guns of Manesar and the Return of Patriarchal Corporatism: Wage Revison at Maruti Suzuki and Reports from Mars Associates and Motherson Sumi Workers -
We include a short note on the upcoming pay revision in the Maruti Suzuki plant in Manesar, which has turned into a stage-show for management propaganda. According to the head of Maruti Suzuki’s human resource department, the pay revision “will help stabilize the situation not only at Maruti, but the entire industrial belt in Haryana”. He continues wisely: “Twenty years back, the profile of workers was different. Now, almost 70 per cent of our workforce is in the age group of 24-26 years. These young guns always look for improvements.” Following the note on the wage revision are two reports of ‘young guns’ employed in Maruti’s supply-chain, at Mars Associates Ltd. and Motherson Sumi Systems.
2) Collective Action –
Reports on proletarian struggles in the area
*** Two Decades of Unrest at Clutch Auto in Faridabad
Clutch Auto was one of the first industrial companies in Faridabad. The first factory was opened in 1971, in the mid-1980s the company shifted to a new plant at Mathura Road. Now Clutch Auto is about to open a factory in Rewari, near Manesar, which may result in down-sizing or closure of the Faridabad plant. At around 2 million per year the company is India’s largest clutch manufacturer; producing for the automobile industry, agricultural machines and army tanks. In June 2011 about 350 permanent workers at Clutch Auto went on a 11-days strike. At the time the dispute at Maruti Suzuki in Manesar, about 50 km from Faridabad, was in full swing. The strike officially concerned wages and a ‘wage agreement’, but the relocation of the factory was looming in the background. We include a workers’ report published in Faridabad Majdoor Samachar. We also translated an older article relating the story of a strike at Clutch Auto in 1992, which broke out after 250 casual workers were sacked from the plant.
*** Green/Nano-Technology, the Long Shadow of the 20th/US-century and the Local Regime: A workers’ Report from Usha Amorphous Metals Ltd. -
Worker’s report on a dispute at Usha Amorphous Metals Ltd., Gurgaon, summer 2011. Workers recently formed a trade union, which raised the demand for higher wages and permanent contracts for the casual workers. In response Usha management sacked all casual workers – followed by police repression and entanglement in the net of the labour law. The company Usha Amorphous Metals Ltd. is an interesting example of the close connection between so-called ‘green’ and ‘nano-technology’ and the large-scale industries (automobile, aerospace, military-complex). The company history also demonstrates the formation process of ‘global corporations’. Behind the formal display of joint-ventures (in Usha’s case with Honeywell, US; Siemens, Germany; Hitachi, Japan) and ‘capital and technology transfer’, we can see how these corporations grew as part of the state regimes and their ‘opening of markets’.
*** Caparo Automobile Workers in Chennai: Short and Successful Strike against Casualisation and Low Wages -
On 1st of December 2011, 500 workers in the stamping and foundry units of the automobile parts manufacturer Caparo (Sriperumbudur/Chennai plant) went on strike. After two days, management agreed to raise wages and to make 110 workers permanent. We report our rather limited information and ask friends and comrades in Chennai to supply further insights on this important struggle. The strike has to be seen as a continuation of the unrest at Maruti Suzuki or Munjal Showa in Manesar, Gurgaon – the unrest of a new generation of workers.
3) According to Plan –
News on (Local) Re-Structuring and Crisis
*** The Failing ‘Kingdom of Dreams': The Global Crunch and the Local Crisis of Real Estate -
In the last month we could observe how two very ‘finance’ sensitive sectors slowly, but surely crunched due to lack of liquidity – the airlines and the real estate sector. These are ‘early symptoms’, hinting at the condition of the general economy. I.e. the root of the problem lying not in ‘sector specific issues’, but in the general squeeze; rising costs of credits vs. lower expectations of future profits. The credit crunch translates itself back into the ‘real world’ in form of urban deserts – in particular in Gurgaon. The three symbols of the neo-liberal boom in Gurgaon are shaken: DLF itself, the Reliance SEZ and the ‘Kingdom of Dreams’, a Bollywood entertainment mall.
*** The Middle-Class is Revolting: Devaluation and Social Angst -
The fact that the iron fix-points of society – money, commodity, state power, professional advancement etc. – slowly turn into sand-castles, leaves its impact on the mind not only of workers, but also of the middle-waged classes. Recently Gurgaon witnessed some outbreaks of ‘middle class anger’ towards the commodity-form. ‘Middle class’ people who lose more time in traffic jams on the National Highway, than the new highway would allow them to ‘win’ by speed, forcibly opened the toll gates which are meant to ‘finance’ the highway. Young ‘middle-class’ people came to see Metallica in Gurgaon – a band, which is known for their arsehole attitude towards ‘free music downloads or sharing’ on the data highway. After the announcement that the concert would be postponed, people smashed the concert venue. Two short news items on pent-up anger…
4) About the Project –
Updates on Gurgaon Workers News
*** Suggested Reading: Contributions to the Global Overthrow
The global and historical character of the current crisis forces us to coordinate both debate and practice ‘for workers self-emancipation’ on an international scale. Check the following for your reading list.
The new Letter by Mouvement Communiste about the Euro fiscal crisis in general and its expression in Greece in particular:
The new issue of Insurgent Notes, reflecting on the ‘Occupy’-movement in the US:
*** Delhi Calling: Get Involved in Faridabad Majdoor Talmel
To abolish the global work/war house will take more than informative exercise! If you live in Delhi area, please be welcomed to take part in Faridabad Majdoor Talmel – a workers’ coordination. We distribute around 9,000 copies of Faridabad Majdoor Samachar on ten days each month in various industrial areas around Delhi. You can also participate in the workers’ meeting places which have been opened in various workers’ areas. If you are interested, please get in touch. For more background: Faridabad Majdoor Talmel
1) Proletarian Experiences –
Daily life stories and reports from a workers’ perspective
Accidents are a daily routine (not only) for workers in the Delhi industrial belts. Not only the factories are slaughterhouses, the way to work itself is murderous. Between January and December 2011 officially (!) 163 people were killed in road accidents on the short Gurgaon-stretch of the National Highway 8, most of them workers crossing the highway on foot…
Two Workers Killed at Machino Plastics, Manesar
21st of January 2012
At least two workers were killed and several injured when a temporary roof-structure collapsed at Machino Plastics Ltd., a supplier for Maruti India Ltd’s in IMT Manesar. “There was a huge machine setup which suddenly fell along with the pillars and roof,” investigation officer Surender Singh said. “The victims were rushed to hospital where two workers were declared dead on arrival. Situation of four workers is stated to be critical.” Those killed were identified as Bhagirath and Naresh Kumar. Bhagirath hails from Uttar Pradesh’s Faizabad and Naresh from Rajasthan.
Omega Construction Equipment Worker
A work accident in the Faridabad plant of Omega Construction Equipment nearly killed Dinesh Kumar. Although he worked for the company since 25 years as a permanent employee and despite the fact that – unlike the majority of workers in Delhi-Faridabad-Gurgaon – he had an ESI medical insurance card, the post-accident treatment by both company and medical system turned out to be a nightmare. http://www.omega.org.in/fabrication/facilities.htm
Omega Construction Equipment manufactures special machinery and heavy fabrications (hydraulic cranes, storage tanks) for the local and global large-scale industry (petrochemical, power, cement, paper, sugar, textile, steel industries). Me, Dinesh Kumar, worked at this factory (Plot 262 M, Sector 24, Faridabad) for 25 years as a permanent employee. On 15th of September 2009 I had an accident at an hydraulic press, which cut my complete face. One jaw bone was cut, I lost all teeth and my nose was cut. I spent one month in the Escorts Fortis Hospital, then 15 days in the Metro Hospital, then 10 days at the ESI Hospital – I was unconscious for the whole time, I then opened my eyes. The mouth area was stitched up, I was fed through a plastic tube inserted into my throat. I was sent to Safdarjung Hospital in Delhi, but then turned back to the ESI Hospital. The nose needed a plastic surgery and the mouth also another operation. I was transferred back to the Escorts Hospital, there they told my family to bring medicine, which cost about 18 to 20,000 Rs, which was not paid for by the ESI… the ESI said that everything will be provided by Escorts Hospital, “so why do you buy the medication yourself?” The doctors at Escorts Hospital later on said that they don’t know about the legal ins and outs. My brother had admitted me to the Metro Hospital, so the 56,000 Rs will have to be paid by my family. From the ESI I received 148 Rs a day from 15th September 2009 to 27th of July 2010. The expenditures were considerable… On 28th of July an ESI doctor attested that I was fit to work. I went to the factory. They sent me back and forth, told me to take my final dues and quit the job. I went to the labour department, through a trade union. There the company agreed in writing that they would take me back on duty. I worked the last three days in September and seven days in October, on pay day I asked for my wages, but the factory director swore at me and threatened me. I went back to the labour department. The company lawyer said that I should take my final dues and quit. I refused. The whole issue went to Chandigarh, to the labour court, the court date is on 1st of July 2011. Again, quite a lot of expenditures… my brother, nephew and my older daughter (my wife has just died) tell me that I should not think too much, that my mind has gone slightly bad, that I therefore should not think too much. As a consequence of the accident I am forced to a certain diet, I have to suck water through my nose regularly, my mouth and head hurts… I will have to go to the ESI medical board in order to get a compensation.
We included a short note on the upcoming pay revision in the Maruti Suzuki plant in Manesar, which has turned into a stage-show for management propaganda. According to the head of Maruti Suzuki’s human resource department, the pay revision “will help stabilize the situation not only at Maruti, but the entire industrial belt in Haryana”. He continues wisely: “Twenty years back, the profile of workers was different. Now, almost 70 per cent of our workforce is in the age group of 24-26 years. These young guns always look for improvements.” Following the note on the wage revision are two reports of ‘young guns’ employed in Maruti’s supply-chain, at Mars Associates Ltd. and Motherson Sumi Systems.
Maruti likely to revise pay structure
7th of January 2012 – Times of India
“The move will help stabilize the situation not only at Maruti, but the entire industrial belt in Haryana, which is home to several auto companies. Their pay revision is due. We have set up a committee, which would evaluate their demands and negotiate those with the company management,” said S.Y. Siddiqui, managing executive officer (human resources and administration). “The wage settlement process will begin in March and it is expected to be completed by April-May.” The company has agreed to the demand of the Manesar workers for a union, separate from those of their colleagues at the company’s Gurgaon plant. Both Gurgaon and Manesar are located in Haryana. “It’s their right to form a union and nobody can stop them from doing that,” Siddiqui said. “We are really happy for them.” Siddiqui said the company has a lot of young workers at both plants and it has understood that it needs to respect their demands. “Twenty years back, the profile of workers was different. Now, almost 70 per cent of our workforce is in the age group of 24-26 years. These young guns always look for improvements.” Siddiqui admitted that “overwork” last year triggered workers to go on strike. “There was a huge demand in the market last year, especially for models like the DZire and the Swift,” he said. “There were occasions when there was a need for extra work. There was a huge pressure on production. Better communication with the workers should have avoided these strikes.” The company will hire 365 workers in this fiscal and at least 750 in the next one, Siddiqui said. A decision on whether to delay the Gujarat plant opening will be taken at the board meeting on 23 January, he added. Maruti Suzuki India Ltd reported a 63.6 per cent drop in net profit for the quarter ended 31 December 2011 from a year earlier. Maruti will seek to increase the proportion of locally made parts to minimize the impact of currency changes. Imports currently constitute 12 per cent of net revenue and vendors import the equivalent of another 10 per cent of net revenue.
Motherson Sumi Systems Worker
(Plot 21, Sector 18, Gurgaon)
The shift officially starts at 6 am, but the company buses arrive as early as 5:30 am. Even the workers who live in Gurgaon have to get up at 4 to 4:30 am to arrive ‘on time’, the workers living in Delhi get up at 3 or 3:30 am. The various assembly lines for electrical (car) harnesses are given names of different flowers in order to distinguish them, but the workload is heavy and less flowery. In the Gurgaon factory most of the work is done for Maruti Suzuki. Because of the unrest the production at the Maruti Suzuki factory in Manesar has been low during the summer months – the ready harnesses piled up in our plant, in the packaging area, in the canteen, next to our machines.
MARS ASSOCIATES PVT. LTD. Worker
(Plot 23, Sector III, IMT Manesar)
The company employs 20 permanent workers and 80 workers hired through contractors. We work on two 12-hours shifts, manufacturing parts for Honda, Hero Honda, Maruti Suzuki. There are no days off, we work on Sundays, even on festival days. The overtime is paid at single rate. Out of the eight pressure die-casting machines four remain defunct since three months. The machines run, though they are faulty – but it is the worker who operates the faulty machine who is sworn at, sometimes beaten. Accidents are frequent, this year two workers have cut their hands. The company does not fill in accident forms, workers are sent to private hospitals, money for treatment is cut from their wages and in the end they are sacked from the job. 650 Rs are cut from wages for ESI and PF, but the workers hired through contractors receive neither card nor PF form. Mars operates another factory in D-166, Okhla Industrial Area, Phase-I, Delhi.
2) Collective Action –
Reports on proletarian struggles in the area
Clutch Auto belongs to the first industrial companies in Faridabad. The first factory was opened in 1971, in the mid-1980s the company shifted to a new plant at Mathura Road, now Clutch Auto is about to open a factory in Rewari, near Manesar, which might result in down-sizing or closure of the Faridabad plant. The company is India’s largest clutch manufacturer, around 2 million per year, for the automobile industry, for agricultural machines and army tanks. In June 2011 about 350 permanent workers at Clutch Auto went on a 11-days strike. At the time the dispute at Maruti Suzuki in Manesar, about 50 km from Faridabad, was in full swing. The strike officially concerned wages and a ‘wage agreement’, but the relocation of the factory is looming in the background. We document a workers’ report published in Faridabad Majdoor Samachar. We also translated an older article relating the story of a strike at Clutch Auto two decades earlier in 1992, after 250 casual workers were sacked from the plant.
Faridabad Majdoor Samachar – July 2011
Clutch Auto Worker
(12/4 Mathura Road, Faridabad)
Every month 100 Rs is cut from the 350 permanent workers wages and paid annually in form of LTC [Leave Travel Concessions] – the bosses say that this is inscribed in the agreement with the trade union. By June 2011, this money accumulated from 2010 had not been paid to the workers yet. The company had also put up a notice in the past, which said that workers are not supposed to take their paid holiday, that they will be compensated. Since 2006 there has been not paid holiday and people who ask for holiday are not granted any. Now, in May 2011 the company put up a notice saying that for any holiday taken the company will cut two day’s wages. In addition, management cut 1,800 Rs from the April wages of workers, saying that according to the wage agreement with the trade union they can cut wages if production targets are not met. On 12th of May 2011 the permanent workers refused to take the reduced wages… on 20th of May the company paid the wages without any reductions. The company opens a new factory in Rewari (around 40 km from Faridabad), they take machinery from the Faridabad plant, they hire new people for training… it looks like they want to get rid off the 350 permanent workers here. On 3rd of June the permanent workers engaged in a tool-down strike, they came to work, but did not start working. On 12th of June negotiations between management and union took place at the office of the Ministry of Labour. The permanent workers and their families ‘encircled’ (protest form) the house of the labour minister, the Clutch Auto workers live in his election constituency. The workers will get wages paid for the ten days of strike, five days are paid by the company and for the other five days workers will work from 20th to 30th of June for 12 hours instead of 8 hours per day. Apart from that a lot of reassurances are given. Production started again on 13th of June.
Faridabad Majdoor Samachar – May 1992
On 4th of April 1992, 250 casual workers were kicked out from this factory, situated at 12/4 Mathura Road. They were employed in the factory for eight to ten years continuously, and during this time the workers had been squeezed to the max. They had to jump from one machine to the other, relentlessly. They were not paid the minimum wage. They did not receive ESI. They worked 30 days a month and if they left work to go and drink water, smoke a bidi or go to the toilet, they were marked as ‘absent’ for half of the day and their wages were cut accordingly. Now, at Clutch Auto like at Universal Engineering or other factories, the conditions of the casual workers come to the fore. In July 1991, management and trade union negotiate a new three years wage agreement. The agreement concerned only the 500 permanent workers, the 250 casuals were not even mentioned. According to the current agreement the workers would have received a 150 Rs wage increase combined with an increase in work load – but management was not able to increase production to the extend they had wanted to. This is why they refused to increase the wages by 150 Rs. Under these conditions it was only natural that dissatisfaction amongst the permanent workers towards the trade union leaders grew. It seems that the union leaders, who are affiliated to the HMS, pushed forward the demand to give all casual workers a permanent status. The fact that management kicked out all casual workers on 4th of April is a link in this chain of events. The fact that management suspended 12 ‘prominent’ permanent workers on 27th of April and the subsequent back-and-forth is another link. In the factory production runs as normal. The casual workers, who had been sacked all of a sudden, are angry and they started to organise themselves. Against their protest management obtained a court rule saying that they have to stay in 50 feet distance from the factory gate. On 26th of April thugs paid by the management started to threaten these workers and ‘prominent’ casual workers were followed back to their homes, where the thugs also threatened their families. One problem is that the casual workers – following the advice of some people who want to turn themselves into prophets – started to put their hope in procedures at the labour department and other paper-tigers. A whole month has already been spoiled while waiting for the date of a hearing. Here we have to remember that in 1983 – 1984, during the period when Clutch Auto shifted the factory from sector 6 to Mathura Road, management sacked hundreds of permanent workers with the help of the CITU. At Mathura road INTUC staged the show the drama, and now it is HMS’s turn to continue the drama.
The back-and-forth heated up and on 11th of May 1992 workers at Clutch Auto went on strike. Workers stare at faces of the union leaders and wait what they have to say – the harmful consequence of which becomes visible. With having forced 100 of the casual workers to resign by end of May, management has sealed the fate of the demand to make all casuals permanent. And at Clutch Auto workers still sit in front of the gate, playing cards, putting their hope in leaders who run back-and-forth between labour department and other officers.
Worker’s report on a dispute at Usha Amorphous Metals Ltd., in Gurgaon, in summer 2011. Workers had recently formed a trade union, which raised the demand for higher wages and permanent contracts for the casual workers. In response Usha management sacked all casual workers – followed by police repression and entanglement in the net of the labour law. The company Usha Amorphous Metals Ltd. is an interesting example for the close connection between so-called ‘green’ and ‘nano-technology’ and the large scale industries (automobile, aerospace, military-complex). The company history also shows the formation process of ‘global corporations’. Behind the formal display of joint-ventures (in Usha’s case with Honeywell, US; Siemens, Germany; Hitachi, Japan) and ‘capital and technology transfer’ we can see how these corporations grew as part of the state regimes and their ‘opening of markets’.
Usha Amorphous Metals Ltd. (UAML) manufactures ‘nano crystalline cores’ (amorphous alloy) for electrical switches used in solar inverters, wind generators, in automobiles, rail traction, aerospace and military technology. Usha Amorphous Metal Ltd. came out of a joint-venture with the US multi-national Honeywell. A Usha subsidiary linked up with the German equivalent Siemens. Both Honeywell and Siemens manufacture for the energy and military complex and the development of the corporation is very closely linked to the ‘expansive’ policies of their respective state regimes. Or as Honeywell management puts it: “Honeywell is a Fortune 100 company that invents and manufactures technologies to address tough challenges linked to global macrotrends such as safety, security, and energy”. Honeywell employs around 122,000 workers worldwide, including 19,000 ‘engineers and scientists’. Honeywell is a company of the 20th ‘US-century’, based in the oil and gas sector, expanding into automobile and military sector. “By 1941, the company was present in Chile, Panama, Trinidad, New Zealand, Argentina, and South Africa. By 1998, the company had operations in 95 countries through 83 wholly-owned subsidiaries and 13 joint ventures.”
Honeywell started to sell amorphous metal products on the Indian market in the 1980s. At the time the state in India curbed the possibility for ‘foreign’ companies to set-up ‘their own’ subsidiaries in India, instead they were ‘forced’ to engage in joint-ventures with ‘local’ companies. The distribution of shares amongst the factions of capital and the question of technology-transfer was given a formal frame-work. In 1987, Honeywell agreed with Usha India to create an Indian-based joint venture, UAML, to make and sell amorphous metal products. Usha India agreed to contribute real estate in exchange for more UAML shares – the family behind Usha India owns large pieces of land in Delhi area and in other regions. Honeywell agreed to contribute technology in exchange. This agreement was memorialized in a “Technology Transfer Agreement”, executed in February 1994. In 1995 the laws for foreign direct investment changed, also as part of the post-1990/91 crisis management and ‘structural re-adjustment – and allowed to set up 100 per cent ‘foreign-owned’ companies in manufacturing. Honeywell set up their ‘own’ unit and the joint-venture with Usha India finally broke up in 2008 – not without a long legal case about ‘monopolising knowledge’ and ‘active sabotage’ of the joint-venture. As we can read in the following, for workers it does not matter too much who their bosses are…
Usha Amorphous Metal Worker
(Plot 487 – 487, Udyog Vihar Phase III, Gurgaon)
In the factory 32 permanent workers and 100 casual workers manufacture parts for electrical transformers. The work load is high, there is hardly time to go on the toilet or drink water. People work 125 to 190 hours overtime per month, which is illegal, payment is 31 Rs per hour overtime, which is also illegal. Each month around three to four day wages get embezzled. After 10 – 20 years of employment the wages of the permanent workers are still only 6,000 to 7,000 Rs. In order to find some relieve workers joined a trade union. In March 2011 workers gave a demand notice to management, demanding a wage increase and permanent contracts for the casuals. In response to this management sacked all casual workers on 28th of April. The workers handed in a complaint at the labour office and started a protest camp in front of the factory. On 11th of May the police arrived, they started to threaten workers, “what are you doing here, go to the labour court”, and chased them away. An appointment was given at the labour department on 18th of May: the management claimed that the casual workers were not casuals, but workers hired through contractor and that currently there is no work at the factory. They said this while hiring new people on a daily level. The April wages were paid to the sacked 100 casual workers on the 18th of May, but the overtime money for March and April has not been paid.
On 1st of December 2011, 500 workers in the stamping and foundry units of the automobile parts manufacturer Caparo (Sriperumbudur/Chennai plant) went on strike. After two days, management agreed to raise wages and to make 110 workers permanent. We document our rather limited information and ask friends and comrades in Chennai to supply further insights on this important struggle. The strike has to be seen as a continuation of the unrest at Maruti Suzuki or Munjal Showa in Manesar, Gurgaon – the unrest of a new generation of workers.
The information on the numbers of workers who took part in the dispute differs. Some sources state that there are 800 workers employed at the plant, out of which 500 are ‘company trainees’, the rest workers hired through contractors. According to this source only the ‘company trainees’ took part in the dispute. Other sources claim that 500 out of 800 ‘company staff’ laid down tools and were joint by 600 workers hired through contractors. It would be important to know which version comes closer to truth.
Workers struck on Thursday, 1st of December 2011. On Saturday, 3rd of December, the Caparo management arrived from Delhi for negotiations. After management agreed on certain demands raised by the workers, work resumed on Sunday morning, 4th of December. “The training period is for about 1-1.5 years. But many of the workers have been here for three to four years without getting confirmed,” said Mr E. Muthukumar, union leader at Caparo. “The management has given confirmation order to 110 workers belonging to C3 grade. The rest of the workers will be made permanent over a period of time,” said Muthukumar. “There has also been a salary increase – from Rs 7,200 gross to Rs 10,200. The management has promised us that the other issue of recognition of our union will be taken up later”.
Caparo India is part of the UK-based Caparo group let up by Swraj Paul. Whoever is interested in the history of this ‘industrial captain’ should read about his involvement in the back-and-forth over the management leadership at Escorts in Faridabad during the early 1980s:
The plant near Chennai supplies stampings, aluminium die-castings and forgings Nissan and Ford. Caparo India basically supplies parts to all major car manufacturers in India and for export, for example:
* Caparo Maruti Limited produces sheet metal and door-parts to Maruti Suzuki and General Motors from factories in Gurgaon, Halol and Bawal;
* A different plant in Halol manufactures axle and suspension systems for GM and for export to Thailand and Mexico;
* The plant in Pune manufactures stamped components for Tata Motors;
* There is a fastener manufacturing unit in Chopanki, another stampings facility in Greater Noida and Caparo aluminium foundry, Chennai.
3) According to Plan –
News on (Local) Re-Structuring and Crisis
In the last month we could observe how two very ‘finance’ sensitive sectors slowly, but surely crunched under lack of liquidity – the airlines and the real estate sector. These are ‘early symptoms’, hinting at the condition of the general economy, the root of the problem lying not in ‘sector specific issues’, but in the general squeeze: rising costs of credits vs. lower expectations of future profits.
The fiscal deficit of the state in India increased after the 2008 bail-out, subsequently the state finances its debts by selling state bonds to ‘private local’ banks (‘domestic market borrowing’). The share of ‘domestic market borrowing’ in financing the federal states’ fiscal deficits increased from around 15 per cent in the 1990s to around 75 per cent today – the ‘domestic market’ share for the central state’s borrowing is currently at about 85 per cent. Like in the global north we can see a close interdependence between ‘state’ and ‘financial sector': the state bails-out ‘the banks’, not in order to ‘stuff the bankers’, but because its own deficit largely depends on ‘market borrowings’. Behind this we can see the need of the ruling class to ‘centralise’ the global command over the credit system, BUT to maintain the bourgeois appearance of separate economic and political spheres – they have seen how quickly ‘state power’ gets under fire nowadays once it is seen not only as a form of political oppression, but also the source of economic misery.
Through the ‘bailout’ the fiscal deficit increases. The regime forecasts a fiscal deficit of 4.6 per cent of GDP for this fiscal year, but their own officials question this: “It is quite clear that it will be very significantly worse. I can’t quantify,” Montek Singh Ahluwalia, deputy chairman of planning commission, said in an interview in mid January. Conservative estimates foresee a deficit of 6 per cent plus – in 1990, before the declaration of state bankruptcy, the fiscal deficit was around 3 per cent. The ‘trust’ in the government as a guarantor for financial stability is eroded: Indian government bonds are among the 10 riskiest in the world, according to a study issued by BlackRock in December 2011. Thereby the ‘general costs’ for borrowing increases: interests on the benchmark 10-year ‘Indian’ government securities jumped to above 9 per cent by end of 2011, an annual increase of more than 1 per cent. These costs trickle down into the wider economy.
At the same time the ‘expectations of future profits’ on the global markets look rather bleak – a global market which the ‘Indian economy’ is increasingly integrated in: India’s (foreign) trade to GDP ratio increased from 20 per cent in 1993 to 45 per cent in 2007; ratio of foreign assets and liabilities to GDP increased from 43 per cent in 1993 to 85 per cent in 2007. The global slow down translates directly into a slow down in the ‘Indian’ market. The request by the Indian government that the state-owned companies should stop “sitting on piles of cash”, and instead spend it on investment in ‘infrastructure’ seems like a rather helpless appeal.
The ‘credit crunch’ at this point leaves the sphere of figures and percentages, the realm of mathematics and regulations, and reveals its origin: the ‘real antagonism’ in the ‘the real capitalist world’. Here certain ‘finance’ sensitive sectors become ‘precursors’, e.g. airlines (global situation, oil prices, ‘state finance’) and real estate sector.
In autumn 2008, the financial trouble of ‘Indian Airlines’ – treated as a symbol of the booming subcontinent – became the stage-show for the state bail-out, a ‘proof of trust’. In October 2008 Jet Airlines had announced the dismissal of 1,900 workers. We then were shown some symbolic protests by the unions, fiery speeches by various political representatives, a state intervention, a repenting general manager and the public reinstatement of the workers. The state guaranteed financial support. Three years later the trouble returns. Kingfisher Airline is close to bankrupt, five of six main Indian Airlines declared losses in 2011. In mid-January 2012, pilots and cabin crews of Air India went on a wildcat one-day strike, protesting non-payment of their wages. The back-log of allowance payments had reached four months.
The situation is similar in the real estate sector, which makes up around 10 per cent of the Indian GDP (including construction, real estate related financial services etc.). Interest rates for mortgages and other real estate credits are high: The central bank’s repurchase rate, currently 8.5 per cent, is the highest level since 2008. The costs for interest payments for real estate developers increased by around 10 per cent on average during 2011, e.g. India’s biggest developer and ‘neo-liberal founder’ of New Gurgaon, DLF paid a record 5.26 billion Rs of interest in the third quarter of 2011, up from 4.96 billion Rs in the prior period. Combined net debt of the 11 biggest Indian developers rose 19 per cent in 2011. The pace of new project launches has severely been crippled in 2011 – a decline of about 50 per cent. Of the total housing inventory pertaining to the under construction projects, 39 per cent are lying unsold. Of the total office stock of 367 million square feet in the major cities, around a quarter remains vacant at the end of 2011.
The credit crunch translates itself back into the ‘real world’ in form of urban deserts – in particular in Gurgaon. The pillars of three symbols of the neo-liberal boom in Gurgaon are shaken: DLF itself, the Reliance SEZ and the ‘Kingdom of Dreams’. DLF stared a sell-out of assets to bring down its debt of Rs 22,500 crore in September 2011. In December 2011, DLF sold its 60 per cent share in a Pune SEZ, DLF also exited from Noida IT Park and sold real estate land in Gurgaon.
In January 2012 the Haryana government announced that it would take back 1,383 acres previously sold to Reliance Industries in Gurgaon. RIL and the Haryana government had entered into a deal in 2006 for setting up the multi-product SEZ, at the time hailed as ‘Asia’s biggest SEZ’ and showcased as a key achievement of the Congress government in the state. Chief Minister Hooda had, on the day of the signing, claimed that the project would create jobs for 500,000 people and that the state would earn Rs 10000 crore from the projects. Six years later, in January 2012 he said: “Yes, we are in talks with Reliance (with regard to handover of the Gurgaon land to the state government) because it has not been able to set up the SEZ.
In January 2012, also the ‘Kingdom of Dreams’, a Bollywood entertainment mall, in Gurgaon started failing. The Haryana Urban Development Authority (HUDA) announced “to give one last chance to the city’s entertainment hub, Kingdom of Dreams (KoD), to pay up the Rs 9 crore it owes to HUDA. If KoD fails to comply this time, it faces closure.” HUDA and Great Indian Nautanki Company had signed an agreement in February 2008. According to the agreement, the firm had to pay Rs 36 lakh per month as rent. The first two notices were issued in June 2011 – the pending rent amount increased to Rs 7.63 crore by November.
We will see how the crisis of the ‘kingdom of nightmares’ will impact on the wider working class reality, on the industrial companies closely linked to the real estate bubble…
The fact that the iron fix-points of society – money, commodity, state power, professional advancement etc. – slowly turn into sand-castles, leaves its impact on the mind not only of workers, but also of the middle-waged classes. Recently Gurgaon witnessed some outbreaks of ‘middle class anger’ towards the commodity-form. ‘Middle class’ people who lose more time in traffic jams on the National Highway, than the new highway would allow them to ‘win’ by speed, forcibly opened the toll gates which are meant to ‘finance’ the highway. Young ‘middle-class’ people came to see ‘Metallica’ in Gurgaon – a band, which is known for their arsehole attitude towards ‘free music downloads or sharing’ on the data highway. After the announcement that the concert would be postponed, people smashed the concert venue. Two short news items on pent-up anger…
On 28th of October 2011 Metallica was supposed to play in Gurgaon. More than 25,000 fans flocked to the venue ‘Leisure Valley’, with some paying more than 10,000 Rs for tickets (current monthly average wage for industrial workers around 5,000 Rs). After the news of postponement was announced on stage, disappointed fans vandalised the venue ‘Leisure Valley’, which can seat around 30,000 people. They broke barriers, climbed on stage and tore posters, smashed loudspeakers and equipment. “The show was cancelled with no prior information to the ticket buyers or [to] the district administration – which could have caused [a] law and order problem,” explained a government spokesman.
On 2nd of January 2012, protesters, who have been demanding the removal of two toll plazas on Gurgaon Expressway, forcibly opened the toll gates at Kherki Dhaula plaza for an hour or longer. The incident took place after villagers from nearby areas held a meeting to plan their future course of action. Almost a month ago, on December 4, the same group had forcibly opened the toll gates of the 32-lane plaza. On Monday, the demonstration by the Toll Hatao Samiti and some of the residents’ organizations also received support from the local Hindu-Nationalist BJP and INLD. “Gurgaon is the only city where two toll plazas have been allowed within 20km of municipal limits. The private company is doing nothing to improve road infrastructure,” said one of the ‘leaders’. The private developer, Delhi-Gurgaon Super Connectivity Limited (DGSCL), has sought financial compensation from the Haryana. At least 190,000 cars pass through the 32-lane toll plaza every working day.