Will continue to invest if workers help us stay competitive, says Bosch global chairman

Written by Roudra Bhattacharya | Bangalore | Updated: Oct 31 2014, 06:28am hrs
At a time when Prime Minister Narendra Modi is encouraging manufacturers to make in India, the global chairman of Bosch, the worlds largest auto component firm, Volkmar Denner, has warned that repeated labour issues may make the country uncompetitive and lead to a flight of investments.

Bosch, largely a technology company that also makes industrial machinery, power tools and home appliances, has witnessed a series of labour issues over the last few years. Even now, the company has had to take a 2% hit to its turnover with workers at a plant near Bangalore going on strike since mid-September over a wage hike. Incidentally, the Karnataka state government has declared this illegal.

We are among the best paymasters in the industry and there is enough room for suitable solutions. Todays situation leads to low productivity, impacting competitiveness of our plants. Our intention is to continue (investments) provided labour conditions lets us be competitive. But today in the world there are many free trade zones and they will increase. That means a country like India has to be competitive with other countries, especially in Asia, Denner said. Denner, who become chairman in 2012, is on his maiden visit to India to review the local operations.

Operating in India since 1922, the 46 billion euros Stuttgart, Germany-based Robert Bosch has six companies, 10 manufacturing plants and seven R&D centers in the country. For Bosch, which spends as much as 10% of its global sales on R&D, its largest development base outside Europe is also in India. Since 2010, Bosch has invested R5,400 crore in India, while the combined turnover of its local units touched R13,200 crore in 2013.

Bosch MD Steffen Berns said that parts supplies to automakers have not been affected because of the strike. We have offered a huge increase in wages, but there are so many differing opinions within the Union that it is difficult to get an agreement. I think we are close to a solution. We are waiting for the High Court decision on the writ petition filed by the union on October 10 before we make any move, he said.

The Bosch Group expects Asia to be the main driver of global growth in the next few years. By 2020, we are aiming to double our sales in Asia. We expect to see India establish itself as the worlds fifth largest vehicle manufacturer by the end of this decade, said Denner.