Table Of ContentLABOUR RELATIONS IN A LIBERALIZED INDUSTRY
A Study of Indian Automobile Workers
ANNAVAJHULA J.C. BOSE
B.R. Ambedkar Bihar University
Muzaffarpur
2012
LABOUR RELATIONS IN A LIBERALIZED INDUSTRY
A Study of Indian Automobile Workers
Thesis submitted to B.R. Ambedkar Bihar University, Muzaffarpur
in partial fulfillment of the requirements for the award of the Degree of
DOCTOR OF PHILOSOPHY
in
ECONOMICS
ANNAVAJHULA J.C. BOSE
B.R. Ambedkar Bihar University
Muzaffarpur
2012
CERTIFICATE
This is to certify that the thesis entitled “Labour Relations in a Liberalised
Industry: A Study of Indian Automobile Workers” being submitted by
Mr. Annavajhula J.C. Bose, to the Department of Economics, B.R. Ambedkar Bihar
University, Muzaffarpur, India, for the award of the degree of Doctor of Philosophy,
is a record of bonafide research work carried out by him. He has worked under my
guidance and supervision, and has fulfilled the requirements for submission of this
thesis, which to my knowledge has reached the requisite standard.
The results contained in this thesis have not been submitted in part or in full, to any
other University or Institute for award of any degree or diploma.
(Dr. C.K.P. Shahi)
Professor
Department of Economics
B.R. Ambedkar Bihar University
Muzaffarpur
ACKNOWLEDGEMENT
Human life is intelligible only as a linear narrative, as a story with beginning, middle
and end. As the story of my protracted doctoral studies comes to a linear end, it is not
easy to acknowledge all the people and circumstances from the beginning to the end
that shaped this dissertation.
Anyone with a decent job by Indian standards and in a position to carry out doctoral
research with aid is indeed privileged. I am one such lucky fellow. The process of
completing this research project was no doubt rewarding for me by way of frequent
joyous feelings of exploration, excitement, challenge, involvement and passion; but at
the same time it was also a very arduous adventurous experience for me as it was
over time often loaded with the feeling of being lost in the wilderness, like it happens
when one treks into a forest of impenetrable density and false and even dangerous
turns. Following Butterwoth (2006), to say that I enjoyed doing my PhD would be a
lie, a big wobbly lie with a dusting of sugar on top. At times I indeed hated my PhD.
I am most grateful to the Department of Economics, BRABU, Muzaffarpur for giving
me the opportunity to write up this long pending thesis. Although it is well said that
“under your own management” is the key to the very individual nature of doctoral
education in that the responsibility for determining what is required as well as for
carrying it out remains firmly with the researcher himself, I am most beholden to my
supervisor Prof. C.K.P. Shahi for his support and reassurance despite my failure to
give continued feedback and meet deadlines due to unavoidable and trying personal
problems and commitments alongside my professional commitments at the
Department of Economics, Shri Ram College of Commerce, Delhi..
I would also like to thank the following persons for providing me with direction for
this research and/or a warm nudging friendship: Dr. Amrita Chhachhi, Prof. Henk
Thomas, Dr. Peter Knorringa, Prof. E. A. Ramaswami, Dr. Freek Schiphorst, Dr. Isa
Baud and Mr. Roodal Moonilal at the ISS, The Hague, The Netherlands; Dr. Gigsbert
van Liemt, freelance researcher, The Netherlands; Dr. Anne Caroline Posthuma at
the International Labour Organisation office at Santiago in Chile; Dr. John
Humphrey, Institute of Development Studies, Sussex; Michael Yates of Monthly
Review, New York; Mr. Navin Chandra at the V.V. Giri National Labour Institute,
NOIDA; Dr. Bernard D’Mello at the Management Development Institute, Gurgaon;
Mr. Krishna Shekhar Lal Das at the Centre for Education and Communication, New
Delhi; Dr. Nirmal Sharma at the Muzaffarpur Institute of Technology and Mr.
Shashi Kumar at Dr. J. Mishra College, Muzaffarpur; Dr. N. Chandramohan,
freelance writer, New Delhi; Dr. Atul Mishra at the Plymouth Business School, UK;
my colleagues Mr. Rakesh Ranjan, Mr. Avinash Jha and Mr. Rajiv Jha at the
Economics Department, and Mr. D.V. Singh, Librarian, all at Shri Ram College of
Commerce, Delhi; and Shri Randeep Sudan, Information and Communications
Technologies Development, The World Bank, Washington, D.C.
My heart-felt gratitude, beyond words, goes to Mr. Surendra Pratap, a passionate
young man of Marxist predilections, for accompanying me in doing the field work
with workers, which was many a time very tedious, frustrating and sometimes even
dangerous in reaching the locations of the respondents and engaging the respondents
in more fluent Hindi language than mine; and to all the respondents whose names I
cannot mention here but who had shared their information, knowledge and views
with me.
I am also indebted to the labour researchers/activists behind the
GurgaonWorkersNews. My work during 1999-2004 relates to their findings during
2005-12. They have tracked down the auto production chain as I did and some of
their findings are even more revelatory than mine and their relationship with the
working class is much closer and thicker as compared to my withdrawl from the
labour scene after calling a halt to my fieldwork and hitting the dead-end of not
knowing how solidarity among fragmented and divisive workers and their leaders can
emerge.
I would also like to thank my employer—the then Principal and Governing Body of
Shri Ram College of Commerce—for having granted me study leave with pay, which I
am entitled to as a kind of fringe benefit of my job, despite the nasty hiccups created
by the then Head of Economics Deptt., Delhi School of Economics, in processing my
application for study leave to pursue this project. The comment that he made that the
Delhi School of Economics would not have given me admission to do Ph.D on the
basis of my proposal that was acceptable to ISS, The Hague, smacks of Delhi School’s
arrogance and refusal to accept pluralist thinking in heterodox economics, leave
alone the richness and superiority of knowledge and intellect and qualitative methods
in other disciplines such as Anthropology, Sociology and Psychology. I also thank
him all the same and I can only suggest to such hon’ble professors to get out of
microeconomic theory, econometrics and the like “serious economics”, and get out of
the illusion that civilization is led by mainstream economics, and dispassionately read
epistemological and political treatises such as Voltaire’s Bastards: The Dictatorship
of Reason in the West, by the Canadian author, essayist and President of PEN
International, John Ralston Saul.
Finally, I am beholden beyond words to my family members, including my in-laws and
parents, for bearing with my shortcomings in relating to them during this research,
especially during the field work times that were afflicted with much delays and
difficulties of data collection, and later on for bearing with my paralyzing fears of self-
doubt and chaos on being terrorized by literature on the one hand and on seeing the
great gap between the rhetoric of the literature and the reality of the field observations
on the other that led to mental immobilization and writer’s block, so to say.
All in all, I alone bear the responsibility for surviving this dissertation and for any
drawbacks in its quality standards. I very well take solace in the final word that “No
book, no author, no expert—no one else can solve your problems. They are yours. You
have to get rid of them” (Becker, 1986, p.164).
This is a modest thesis about employment conditions of factory workers in the
automobile industry in Northern India with absolutely no pretention of putting
forward a faithful, holistic and arresting picture of working-class life like a Robert
Tressel or Alan Sillitoe or Huw Beynon does. I am most grateful to anybody who
reads this thesis even if its crafting is not to the reader’s delight as is the crafting of
“Shiva” in “The Immortals of Meluha” by Amish Tripathy.
I would like to sign off by underlining here that the working people are not
fundamentally responsible for the problems of inhumanity, inequality, poverty and
destitution in this country and elsewhere and I have no problems at all in standing
with them—despite any personal drawbacks in them--and hoping and fighting for a
better tomorrow that a teacher of mine I admire—Prof. Amit Bhaduri—has proposed
in his sensible policy-oriented and proactively feasible political-economy
masterpiece, Development with Dignity. Pity the nation that does not heed this
pragmatism and possibility.
The voices of the poor that chronicle the struggles and aspirations of poor people for
a life of dignity will have to be heard by the powers that be ruling this world. The
earlier the better. The very recent Occupy Wall Street protests in USA which have the
potential of becoming Occupy the World movement, and the protests elsewhere in the
Middle East, India, Chile, China, Britain, Spain, etc. during the year 2011—dubbed
as the year of protests—for example, and the labour unrest in industrial workplaces
and agrarian unrest including tribal unrest that has been growing and spreading
over the last decade in India and elsewhere, all testify to the grassroots rage and
activism against the unfairness, inequity and brutalization of the socio-economic
system in which we live, and against the corrupt and hypocritical culture in
mainstream politics of the representative democracy type or the absolutist
dictatorship type. Development with dignity is the wailing as also the clarion call of
the rural and urban poor everywhere. The cry and rebellion now of the global
working class is well captured, in historical perspective, recently by the economic
editor of BBC’s Newsnight, Paul Mason in his book titled ”Live Working or Die
Fighting”. This, to me, sums up the human condition in the world of work even as
workers are paying a heavy price for forcing employers to think about the road less
travelled, the decent road!
(Annavajhula J.C. Bose)
ABSTRACT
This research project was conceived as an empirical study of ‘what’s happening to
labour’ in the automobile industry in the National Capital Region (NCR) in the era of
neo-liberal economic reforms in India. The study documents and discusses the
experiences of the working people by tracking labour relations in terms of (a) nature of
labour contracts; (b) work organization and worker participation; (c) skills and training;
(d) wages and working conditions; and (e) worker organization and labour-management
relations in a selected sample of large, medium, small and tiny firms in the auto
production chain found in the NCR. That is to say, insofar as the component or ancillary
firms are not only linked to lead firms or final assembly firms, but also with their own
suppliers in the vertical supply chain through multi-layered subcontracting relations, the
study was made to contribute to the much unexplored link between industrial
organization within and between firms in terms of production chain on the one hand,
and labour and human resource policies and practices in the production chain of final
assembler and component firms on the other. The research project was carried out using
mostly a qualitative research strategy with more emphasis on discovery and description
and less emphasis on hypothesis testing and verification. The study was inspired by the
global debates concerning the spread all over the world in terms of imitation or
modification of Japanese industrial practices as the best practice models of
manufacturing in conjunction with ‘high road’ (i.e. ‘high performance’ or ‘co-
operative’) labour relations experiments like employment security with a proportion of
remuneration linked to performance through such arrangements as production bonuses
and gain or profit sharing schemes, devolution of decision-making responsibility to the
lowest appropriate level in the organization, hierarchy compression, team-working,
continuous improvement and training, etc. for generating substantive productivity,
quality and flexibility gains for manufacturers implementing them in the automobile
industry. The study was, thus, undertaken with the hope of finding out ‘high road’
manufacturing and labour practices in the Indian context as the global automobile
industry has been hailed as the bellwether of exemplary labour relations under neo-
liberalism. The reality captured by the study, however, is largely one of competing on
low road labour conditions involving labour rights deficits that characterize predatory
industrial capitalist terrorism.
CONTENTS
Page No.
List of Tables i
Acronyms ii-v
CHAPTER 1: INTRODUCTORY OVERVIEW 1-18
1.1 Broader Context 2
1.1.1 Neoliberalism and Labour 2
1.2 Narrow Focus of the Study 6
1.2.1 Patterns of Industrial Restructuring in India 9
1.2.2 Rise and Decline of Japanese Style Employment Relations 12
1.3 Justification of the Study 15
1.4 Organisation of the Thesis 17
CHAPTER 2: CONCEPTUAL, EMPIRICAL AND NORMATIVE
CONSIDERATIONS OF THE STUDY 19-77
2.1 Production Chain and Subcontracting 20
2.2 Labour Relations 22
2.2.1 Ethicality in Employment Relations 25
2.2.1.1 Reason vs. Justice and Academic Crisis 26
2.3 Labour Market Dualism 28
2.3.1 Formal and Informal Sectors in Indian Automotive Industry 29
2.4 Labour Segmentation 30
2.4.1 Atkinson’s Flexible Firm and New Employment Model 32
2.4.1.1 Critique of Atkinson’s Model 34
2.4.1.2 Horizontal and Vertical Labour Segmentation 35
2.5 Old Industrial Relations System 36
2.5.1 Right to Strike 37
2.5.2 Death of Old Industrial Relations in India 38
2.5.3 Three Irresponsibilities 42
2.6 HRM and New Industrial Relations 44
2.7 Contract Labour and Temping 51
2.7.1 New Labour Force 60
2.8 Small Firm Labour Relations 62
2.9 Informal Labour Relations 70
2.10 New Political Rhetoric of Triple Bottom Line 74
2.11 Once Over Lightly 76
CHAPTER 3: INDUSTRIAL RESTRUCTURING AND LABOUR:
THEORY AND CRITICAL THINKING 78-129
3.1 Theory of Networked Firm 78
3.1.1 Internal Development of Core Competencies 80
3.1.2 Externalization of Standard Competencies 81
3.1.3 Quasi-Internalization of Complementary Competencies 83
3.1.4 New Forms of Labour Segmentation 86
3.1.5 Critical Appraisal 88
3.2 Business Strategy and Labour Relations 88
3.2.1 Innovative and Adaptive Strategies 89
3.2.2 High Road and Low Road Strategies 91
3.2.2.1 Two Kinds of Labour Flexibility 92
3.2.3 Cost Leadership and Differentiation Strategies 93
3.3 Manufacturing Strategy 95
3.3.1 Lean Production 99
3.4 Sophisticated Cost Cutting and Labour Relations 110
3.4.1 A Critical Evaluation 113
3.5 Lean Production Impact on Labour: Hypotheses, Questions,
Contradictions, and Dilemmas 118
3.6 Once Over Lightly 129
CHAPTER 4: LEAN PRODUCTION AND LABOUR IN THE
GLOBAL AUTOMOBILE INDUSTRY:
A REVIEW OF EMPIRICAL DISCOURSE 130-241
4.1 Automotive Production Chains and Subcontracting 134
4.2 Variety of Labour Relations at the Auto Lead Firms 151
4.2.1 Work Organisation and Worker Participation 154
4.2.2 Skill Formation and Development 159
4.2.3 Remuneration and Compensation 164
4.2.4 Job Security and Staffing Arrangements 171
4.2.5 Enterprise Governance and Labour-Management Relations 180
4.3 Chinese Auto Assembly Labour Relations 190
4.4 Labour Relations at the Automotive Subcontractors 196
Description:Thesis submitted to B.R. Ambedkar Bihar University, Muzaffarpur in partial Mr.
Annavajhula J.C. Bose, to the Department of Economics, B.R. Ambedkar Bihar.
