The automobile industry in India has been a fast growing sector in which the big capitalists of our country as well as the foreign multinational companies have great and growing interest.
All the big capitalist groups of India —Tatas, Birlas, Firodias, Bajaj, Mahindra, Hinduja, TVS, Hero group of Munjals, Kirloskars etc. have nurtured this industry since decades. Many other capitalist groups are also actively involved in auto component business.
There has been a massive growth of this sector following the launch of the economic reforms program in 1991. The sector was delicensed and subsequently opened up for 100% Foreign Direct Investment. From a production level of around 20 lakh vehicles per annum in 1991, to around 85 lakh in 2004-05 and to about 204 lakh vehicles in 2011-12 — such has been the phenomenal growth of this sector. Almost all the major automobile companies of the world such as Toyota, Suzuki, Ford, Peugeot, Daimler, Honda, Mazda, Hyundai etc. have either independently or in collaboration with Indian big capitalists set up their manufacturing plants in India. The Indian bourgeoisie wants to make India into a global manufacturing hub for the auto industry. The Indian and foreign capitalists are committing to invest lakhs of crores into this sector with an eye on maximising of profits.
In almost the entire industry, the Indian and foreign multinationals have followed certain common practices to maximise their profits through intensified exploitation. They have tried their maximum, in connivance with the central and state governments and their labour departments, to prevent the workers from organising themselves into unions. Each multinational competes with the other in repressive measures on workers in the name of productivity. For instance, the wages of workers are divided into two components — a fixed wage and another component linked with "performance". In the Maruti Suzuki plant in Manesar which is in the news at present, a permanent worker earns about Rs 7000 as the fixed wage. He can theoretically earn another 8000-9000 as "performance linked wage", which rarely happens. Wages are cut savagely for a variety of reasons, from reaching 5 minutes late (half a day’s wage cut), to falling sick or having to take leave for some family emergency (several days cut for one day unscheduled leave). Furthermore, workers are divided into four categories — regular workers, casual workers, apprentices and trainees. (In Maruti Suzuki’s Manesar plant, there are 970 permanent workers, 1,100 casual workers, 400-500 trainees, and 200-300 apprentices. In Hyundai plant in Sri Perambadur, as well as in other automobile manufacturing plants, the proportions and categories are similar). The casual workers, apprentices and trainees are also similarly exploited, the difference being that their wages are much less than the regular workers and the sword of dismissal hangs permanently over their head. In this way, by preventing the formation of unions, and by dividing workers into 4 parts, the capitalists have tried to prevent the thousands of workers who are necessarily working under one roof, from uniting and fighting against their exploitation.
Workers have not taken this lying down anywhere. The automotive sector throughout the country has been racked by massive unrest.
Major struggles have erupted everywhere. Among the prominent instances are: Mahindra (Nashik), May 2009 and March 2011; Sunbeam Auto (Gurgaon), May 2009; Bosch Chassis (Pune), July 2009; Honda Motorcycle (Manesar), August 2009; Rico Auto (Gurgaon), August 2009, including a one-day strike of the entire auto industry in Gurgaon; Pricol (Coimbatore), September 2009; Volvo (Hoskote, Karnataka), August 2010; MRF Tyres (Chennai), October 2010 and June 2011; General Motors (Halol, Gujarat), March 2011; Maruti Suzuki (Manesar), June-October 2011; Bosch (Bangalore), September 2011; Dunlop (Hooghly), October 2011; Caparo (Sriperumbadur, Tamil Nadu), December 2011; Dunlop (Ambattur, Tamil Nadu), February 2012; Hyundai (Chennai) April and December 2011-January 2012, and so on.
The response of the various State governments & Central governments and the entire State machinery i.e. police and judiciary, has been to try to violently crush these struggles, in collaboration with the managements. The all-out and open support of the government machinery, including the police and labour departments, to the owners of companies in this sector is justified in the name of "encouraging capital flow to create jobs". Under the cover of this propaganda, the state openly violates its own labour laws. The capitalists openly hire goons who man the gates and physically attack the workers. Many of these plants are in new areas far away from towns, and workers can reach their places of work only in company buses, from their pick up points far away. Factories are placed far apart from one another, so that workers of one factory cannot easily come to the assistance of the workers of another. Through these and other methods, the capitalists have succeeded in intensifying the degree of exploitation of workers of this sector, as shown below.
The annual wages in the motor vehicles industry rose in nominal terms from Rs 79,446 in 2000-01 to Rs 88,671 in 2004-05 and to Rs 109,575 in 2009-10. However, the Consumer Price Index for Industrial Workers (CPI-IW) consistently rose more steeply than wages. So real wages in the auto industry fell 18.9 per cent between 2000-01 and 2009-10. (See Chart 1.)
This means that after taking into account inflation as declared by Government of India , the auto industry workers earned almost 20% less in 2009-10 of what they were earning in 2000-01. If we consider the fact that the government declared Consumer Price Index never fully covers the real cost of living and the fact that cost of living has increased even more rapidly in last 2 years, one can imagine the plight of the workers.
On the other hand, net value added per auto worker ( i.e. the difference between the value of the physical inputs and the value of the output, minus depreciation ) has been rising, barring a dip in the years of the slowdown in the economy. Each worker added value of Rs 2.9 lakh in 2000-01; this figure rose by 2009-10 to Rs 7.9 lakh (see Chart 2).
This means that as compared to 2000-01, the auto industry workers created more than 2.5 times more value in 2009-10 by using their labour power on the raw materials they handled!
Naturally, wages as a share of value added have been falling, as can be seen in Chart 3. In 2000-01 workers’ wages were 27.4 per cent of value added. By 2009-10, the ratio had fallen to 15.4 per cent.
Thus we can say that in 2000-01, an auto worker spent 2 hours 12 minutes of an 8-hour shift working for his own subsistence and that of his family. He spent the remaining 5 hours and 48 minutes generating surplus for the capitalist. By 2009-10, the ratio had deteriorated: The auto worker now spent just 1 hour 12 minutes working for his own subsistence and that of his family, and the remaining 6 hours 48 minutes ensuring profits for the capitalist.
It is thus very clear that only by increasing exploitation of workers by various methods that the Indian and foreign capitalists in automotive sector have immensely increased their profits.