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Fleeing The Reds

Corporates are shifting out of the state, but Basu claims all is well

Fleeing The Reds
outlookindia.com
-0001-11-30T00:00:00+0553

IT was the ultimate insult for the West Bengal government. Close on the heels of the Philips move to shift their Salt Lake factory to Pune, on February 6, the funds-starved Dunlop India Ltd declared a work suspension at their Sahaganj factory. The news of another local major joining the lengthening queue of corporates packing up their bags—Brooke Bond Lipton (BBLIL), Shaw Wallace, ICICI and GEC—burnt a big hole in Chief Minister Jyoti Basu's tall claims of an industrial resurgence. That too, barely two weeks before polls. But the PM-aspirant was unmoved.

Predictable too, was the reaction at Sahaganj. The sprawling factory on the banks of the Hooghly employs about a third of the local workforce. Hours after the stoppage, members of the Centre of Indian Trade Unions (CITU)-affiliated Dunlop Workers Union and the Indian National Trade Union Congress-loyal Dunlop Factory Rubber Labour Union shouted slogans, but to no avail, as management staff quarters were vacant. There was a ritual bandh on February 12, but only six local factories continued to function. At the secretariat, smugness ruled. Said Industries Minister Bidyut Ganguly: "What can the government do? If four (industries) leave, there are 40 more willing to come in." The ministers for labour and finance, Shanti Ghatak and Asim Das Gupta, called company reps for talks that concentrated more on the propriety of the suspension order, since the state wasn't informed of it, than its merits. At Sahaganj, even as CITU supporters hoped for a strategy to help workers, one of them admitted: "No doubt, out here, industrialists are more powerful than the government."

The strategy for Dunlop should have come long ago. The company showed a loss of Rs 19 crore in 1997-98, against a nominal, contrived profit of around Rs 5 crore the year before. A bank consortium had advanced Rs 38 crore to it, against a requirement of Rs 91 crore, as the RBI came down on the poor repayment records of sister companies, Nihon and Orson. But Dunlop had stopped buying raw materials for production on January 8. For the past four months, workers went without wages. Said R&D worker Himadri Chatterjee: "We were getting Rs 3,000 a month for two hours daily work, against Rs 7,000 for a full month's work." Wailed another: "We sent several deputations to Delhi, but to no avail. Perhaps because former finance minister P. Chidambaram is the counsel for Dunlop chief M.R. Chhabria, who is embroiled in an enforcement inquiry on funds siphoning from Shaw Wallace and Dunlop."

At Philips, the management hardened its stance after a director was barred entry into the Salt Lake factory by the CITU union. Even a monthly salary hike of Rs 1,200 failed to up productivity—the annual value of output dropped to one-third in three years. The company doubled its annual colour TV producing capacity to 2 million sets, at an investment of Rs 90 crore a few years ago. If Basu did do anything during his visit to the Philips headquarters in Holland recently, no one's telling. Now, only a few of the 1,200 workers would be going to Pune; it's either the golden handshake or the axe for most.

When BBLIL shifted operations to Mumbai, a senior minister said: "Such decisions are of no loss to the state." He had no answer when pointed out that the company generated Rs 5 crore of income tax revenue for the state. Said Basu recently in Assam: "If the tea companies want to shift their head offices to Assam, it's all right with us. We are not parochial." Such statements, backed by one of the worst bureaucracies and an unemployment figure of 5. 5 million, only rebound on the state apart from giving keen industrialists the distinct cold shoulder.

As for Dunlop, it's exploring several ways to meet the crunch, mainly sale and recovery of assets. MD P.J. Rao has sought an urgent meeting with Asim Das Gupta to sort out labour and financial issues (read, shed jobs). And if the state's reaction to Philips or BBLIL is any indication, workers at Dunlop face a hard and dreary summer ahead.

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