Samsung is in the news yet again thanks to a fresh industrial impasse in its manufacturing unit in Tamil Nadu. The happenings have elicited more than a cursory interest across the business community within and outside the state since Samsung is an iconic global brand.
The current face-off between the labour and the management of this MNC (multi-national company) has, predictably, attracted magnified attention. With elections for the state assembly just a year away, the labour impasse at Samsung has political undertones. Coming as it does at this juncture, it has put the M.K. Stalin-led DMK Government in Tamil Nadu in a tough situation. Speculations have already started circulating freely on the cause and effect of the latest imbroglio at the Sriperumbudur facility of Samsung.
Cause for the current unrest
The current strike, led by the CPI(M)-affiliated Centre of Indian Trade Unions (CITU), is in response to the suspension of three workers, who are also office-bearers of the Samsung India Workers Union (SIWU). The suspension, the management claims, was inevitable when a group of workers gathered at the lobby of the factory premises unannounced and gate crashed to confront top officials of the company. The unauthorised assembly, according to management sources, triggered avoidable tensions. The management has since ordered an inquiry into the three workers who had reportedly led the gathering on that day.
In the era of CCTVs (close-circuit televisions), it is difficult to camouflage any movement - let alone barging in - in a factory premise.
Prior to the current episode, in September last year, Samsung workers went on a strike demanding recognition of their newly-formed union. Besides this, they also laid out a number of demands, including higher wages and improved benefits. On that occasion, they struck work at an inappropriate time as Stalin, was on an investment-soliciting tour to the US.
Right now, according to informed sources, the non-employee leader of the CITU-affiliated union - registered following a court order but not recognised by the management - wants the inquiry to be continued but suspension of the three workers revoked. The management is not willing to compromise on this.
State government hasn’t yet stepped in
Significantly enough, this time around the State government hasn't overtly engaged both sides following the face-off between the management and the workers' union. This was something it did the last time to prevent unrest spreading.
What does it portend?
One could assume that the DMK government is rather cautious and not willing to be seen as anti-labour, especially since the state is set to go to polls in a year. Simultaneously, the Stalin regime is also trying to foster its pro-industry image. Caught in a pincer-like situation, the DMK government of Stalin has a tough task of balancing its action.
The unanswered question: Why now?
Why did the CITU-affiliated and non-employee-led union pick up a showdown at this point in time? Theories abound. The needle of suspicion is, however, pointing out to the beneficial party.
In this instance, the beneficial party is CPI(M) since CITU is its affiliated union. CPI(M) is a constituent of the DMK coalition. Having almost gone into hibernation in the post-liberalisation phase, the CITU is now trying hard to return to visibility in the industrial clusters of Tamil Nadu. With elections around the corner, visible action could be a positioning strategy to beef up the bargaining power of the beneficial party in this instance.
TN’s focus on attracting electronic hardware investment
According to aprior policy note of the DMK government, TN is aiming to increase the electronic hardware production to a rather ambitious $100 billion by 2025. At $9.56 billion, the share of Tamil Nadu in the country's electronic exports today stands at around 33 percent. The state is also keen to increase this share to 40 per cent by 2030. The policy thrust on electronics hardware opens up possibilities for significant job opportunities.
Read against this backdrop, the latest labour imbroglio at the Sriperumbudur facility has raised concerns across-the-board. With states vying with each other to woo global investment, frequent hiccups on the labour front could put a brake on investment flow into Tamil Nadu. How difficult will it be to stop the spread of negative perception among the global investing community because of episodes such as the one happening at Samsung?
The import of the collateral damage of such episodes cannot be underestimated. The state political leadership has to weigh this carefully. One thing is sure. The sound and noise emanating from the Sriperumbudur facility of Samsung are striking a jarring note in the DMK government’s stated investment objectives.
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