The growth of industrial unrest in the auto industry is directly linked to our reluctance to take any policy measures to clear up our labour laws. The industry, which is an outstanding example of the success of reforms in the industrial sector, has seen a rush of investments from most global players, boosting employment and production. India car sales are expected to double from 1 million units in 2006 to 2.1 million units in the current year. And the country hopes to become a global leader in the small car market in the coming years. The reason for the spate of labour-related disputes in the auto industry is its very success, which makes it an important target for trade unions that have missed the bus in the information technology sector. The high profile of the units and the large size of operations?with workers having very disparate skills?make it a much easier target than other sunrise industries. The worst affected has been the auto cluster in the Delhi-Haryana belt where Maruti Suzuki plants have seen their production disrupted twice this year. While the current strike is mainly concerned with trade union rights, other car manufacturers have suffered production stoppages on account of demands for higher wages and better work conditions. Workers at the Hyundai plant in Sriperumbudur in Tamil Nadu have staged a series of strikes since 2008, with the most recent one being in June 2010. Much earlier, the Toyota unit in Karnataka had to declare a lockout in 2006 following labour troubles. The growing unrest has forced many global players to divert their new investments into safer zones, especially in Gujarat. The strike at the Halol plant of General Motors this year, just a few months after the signing of a three-year agreement with the management following an earlier strike in October 2010, is something unprecedented for the state.
Trade unions have found it easy to tap dissent over the industry practice of a large-scale use of contract workers. This usage is a result of the difficulty the manufacturing sector faces in changing employment numbers with changes in their order books, under current labour laws. Since the laws cannot change to bring in benefits for contract workers, the few with permanent employment enjoy far better terms at the cost of the latter. Trade unions block the amendments and then fish in the discontent to create more trouble. Recent estimates show the share of contract workers in the last decade has ranged from 38% in the manufacture of accessories and engines to 58% in the manufacture of bodies. While the auto sector expands, the workers end up as losers.
