Samsung test for TN when it’s rolling out the red carpet

Observers are hoping that the Samsung issue remains quarantined.

An industrial strike at the Sriperumbudur facility near Chennai of Samsung Electronics appears to have put the MK Stalin-led DMK Government in Tamil Nadu in an unenviable position. Workers have been on strike since September 9, demanding recognition of their newly-formed union. Besides this, they have also laid out a number of demands, including higher wages and improved benefits.

Significantly, the newly-formed union is headed by an outsider (a non-employee). And, this union is backed by CITU (Centre of Indian Trade Union).

CITU places an obstacle in TN’s manufacturing goal

Long-time watchers of the industrial relationship (IR) scene in Tamil Nadu see in the Samsung imbroglio a renewed attempt by CITU to reclaim its powerful past, and position itself as the much-needed Good Samaritan for workers in the emerging industrial dynamics, where organisations are believed to be focussed only on revenue and profit.

There appears to be a method in strategy followed by CITU. TN government is betting big on electronics hardware manufacturing. According to a policy note of the DMK government, TN is aiming to increase the electronic hardware production to $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. And, Samsung appears to be the perfect window for CITU to not just remind stakeholders of its existence, but also spread its presence.

Outsider-led unions trigger pushback

The formation of the union with an outsider as its leader hasn't gone down well with the Samsung management. Outsider-led unions have always been frowned upon by multinational firms. In the post-liberalisation era, collective bargaining as a tool for ushering in peace in an industrial organisation has lost its vitality. In this backdrop, CITU is pushing to gain more than a toehold in some adjacent factories in the belt, especially in the electronic space.

The leader of the newly-formed union, Muthukumar of CITU, has insisted that Samsung management must first acknowledge the union. "They don't want to talk to us," he told this writer. According to him, close to 1,450 workers are part of the newly-formed union. No doubt, the strike could be the culmination of prolonged neglect of legitimate rights of the workers. Yet, the question that’s pertinent is why did it find articulation in public now?

Why now?

There could be several reasons for this. Even as the two sides are hoping for the other to blink first, the Samsung episode has raised a number of issues.

The timing of the strike (from September 9) is not lost. CITU chose to go on strike, when the CM MK Stalin was in the midst of a sojourn to America to woo investment. During his trip, he even managed to commit Ford - which shut its manufacturing operations in India a few years ago - to return to Chennai.

Earlier, with Ford quitting Chennai and India, Sterlite shut out of Thoothukudi and the Russian rifle project, according to state government sources, hijacked to Amethi, it has become a lot more difficult for TN to draw in significant foreign investment.

This is why government officials are pinning their hope on an amicable resolution. A prolonged strife at Samsung isn't going to do any good to anybody, they argue.

Paramasivam, a veteran trade union leader, acknowledges that unlike earlier, any development now reaches the global audience instantly in the Internet Age. "Foreign firms get instant feed of such strikes, and this could instil a sense of doubt in their minds on putting their investment," he admits. The timing is also significant from an entirely different perspective. It comes ahead of the festive season when companies go the whole hog to drive production and jump-market their wares.

Incentives are not enough, labour environment matters

In the emerging global business environment, it is not just the countries which jostle for investment, even states in India are competing intensely. In the evolving context where incentives are no longer enough for businesses to come into any state, providing a hassle-free business environment becomes critical to entice global investment.

But that does not allow the corporate world unbridled freedom to overlook the legitimate needs and rights of the working class. In the Internet Age, peer assessment is a lot easier, and a largely enlightened working class is reasonably aware of the labour environment around the globe. Instances are a dime a dozen in this particular belt where organisations have skirted even reasonable requests from the working class.

No doubt the Samsung imbroglio has put TN administration in a tight corner, especially when it is trying hard to bring in global investment.  What cannot be wished away is the fact that the CITU enjoys political patronage from a party which forms part of the ruling alliance. Read against this backdrop, observers are hoping that the Samsung issue remains quarantined and does not impact the larger effort of the state government to attract overseas firms.