Bangalore: Paying a Heavy Price

 
The fall-out of the four-month strike in the five premier PSUs in Bangalore is only now being
felt throughout the nation. The effects have been particularly severe because nearly all the
mammoth concerns where work stopped—HAL, BEL, BBEML, HMT and ITI—produce capital
goods and components desperately needed by many industries.
One of the worst affected by the strike which ended in March has been the TV industry
which is mostly in the small sector. BEL makes 40 million picture tubes, the most essential
component of a TV set.
Orders placed with BEL last year are yet to be processed and delivered. This means
production slow-downs and partial lay-offs in TV manufacturing units, resulting in more
unemployment. Even if factories go in for imports, being bulky items picture tubes cannot be
air-freighted and getting them by sea involves a delay of six to eight weeks. Some TV
manufacturers in fact are importing picture tubes from Taiwan at very high prices, an
avoidable drain on scarce foreign exchange.
According to the Indian TV Manufacturers’ Association, it had pleaded in January, when the
strike was in full swing, with the Electronic Trade and Technology Development Corporation
(ETTDC), to go in for imports to fill the anticipated shortfall of 100,000 tubes. Since nothing
was done, production of TV sets fell steeply resulting in black marketing and causing great
inconvenience to customers.
Replacement of even a small BEL component, either by an imported one or by another of
indigenous make, presents problems. First of all, the circuits would have to be changed.
Most manufacturers, accustomed as they have been to BEL quality and specifications, would
not be able to affect the switch.
Use of another make of component also presents the possibility of a higher rejection rate of
the end product. The list of items manufactured by BEL is long. Once a component has
outlived its stipulated period, it has to be replaced. Again, difficulties arise when such items
go off the market. A shortage of X-ray tubes resulted in many patients being referred from
hospital to hospital.
Though production at BEL has resumed, it will take months to clear the backlog of orders.
For 1980–81, BEL had a production target of `84 crore. It achieved only `57 crore, thanks to
the strike.
Thwarted Plans: BEML had an ambitious plan of achieving a turnover of `175 crore. They
have lost `69 crore worth of production. Thirty six per cent of BEML production goes to the
coal industry, 26 per cent to irrigation and power, 14 per cent to iron and steel and 6 per
cent to agriculture.
What are their products? Crawler tractors, dumpers, excavators, track shovels—equipment
vital to the coal, irrigation, power and mining industries. Added to this is the little-known
fact that BEML accounts for 25 per cent of the production of rail coaches in the country, with
substantial export orders. Here again the railways, and ultimately the public, will suffer.
Officials of BEML one of the efficiently run PSUs, pointed out that production during any
normal year progressively increases and picks up only towards the middle of the year,
reaching its peak during the last quarter.
While production had been satisfactory till December (the strike began on December 26),
there had been total stoppage since then. In 1979–1980, BEML reported netted a pretax
profit of `12 crore. In 1980–81, due to the loss in peak production during the last quarter, all
possibilities of breaking even have been wiped out.
Those who entertain ambitions of having a telephone might as well shelve it for the time
being. Even at the best of times, getting a telephone line installed is a herculean task. With
ITI suffering a loss of 25 per cent of its targeted production of `130 crore, the already long
waiting lists for telephones will only get longer in the months to come.
A World Bank loan of £53 million (`92.7 crore) which became operative on 30 October 1978,
terminates on 31 March, 1982. This was to help ITI modernise its equipment. A World Bank
team was in Bangalore recently, apparently to monitor the progress of the programme,
keeping in view the prolonged strike, ITI, which also had a reputation as a consistent
exporter, has already sustained a loss of `10 crore in overseas orders, according to C. M.
Stephen, union communications minister.
Although HAL primarily functions as the principal overhaul, repair and maintenance depot
for the air force and for aircraft of other wings of the armed forces, it too suffered from the
strike. While no information can be officially released, HAL being a defence undertaking, it is
clear that the Jaguar assembly project suffered a serious setback. A new division was set up
for this purpose but even the civil construction work on it has been delayed.
Silver Lining: The only silver lining seems to be on the HMT watch front. Though its
Bangalore unit was on strike, the company as a whole has made up and produced 3.51
million watches in 1980–1981. Even with the Bangalore unit on strike, perhaps this figure
could have been surpassed. Also, HMT’S two vital foreign projects in Algeria and Nigeria,
each worth `10 crore, are bound to be affected by the strike, apart from inevitable loss of
goodwill.
According to Michael Fernandes, president of the ITI Employees Union and one of the
leaders of the JAF, the strike was forced on the workers by the government and the
managements who refused to negotiate for nearly nine months on the demand for revising
wages on the basis of a clause incorporated in the tripartite settlements signed in 1978.
The clause relates to parity with BHEL in respect of a minimum wage. The demand of the
striking workers was merely for maintaining this parity which the government flatly turned
down.
As the strike progressed, amidst all the early euphoria and whipped-up enthusiasm, the JAF
quietly began to play down its demand for parity. Indeed, on three different occasions, when
some of its leaders met the prime minister at Bangalore airport, the JAF suggested that it
had a ‘watered down’ version of its demands.
Short of spelling out their eagerness to call off the strike, they did everything possible to
persuade Mrs Indira Gandhi to agree to a negotiated settlement.
When this obviously did not happen, the JAF knuckled under amidst all its brinkmanship and
bravado. The INTUC unit of HMT, controlling some 6,500 employees of HMT–1 and HMT–2
units manufacturing sensitive and sophisticated machine tools, which had not joined the
strike, raced to the forefront through its sustained psychological campaign against the strike,
under the stewardship of F. M. Khan, MP, president of the Karnataka INTUC and treasurer of
the All India Congress Committee (I).
Though Khan succeeded, through his poster campaign and rough-house street brawl tactics,
in causing confusion and disarray among the JAF leadership, he miserably failed to emerge
as the hero of the toiling masses. Karnataka Chief Minister R. Gundu Rao also came a
cropper in his attempt to play the honest broker in ending the deadlock.
It can truly be said: while neither the workers, nor their trade union leaders, nor the
managements of the Bangalore-based PSUs, emerged victorious, the people of India have
lost heavily. And they will continue to pay for the folly of these leaders for months to come.

Case Questions
1. Please list down the impact of the strike in HAL, BEL, BEML, HMT and ITI on the
following:
a. On their employees
b. On the depending companies using their products as raw materials
c. On the employees of the subsidiary companies and their vendors
d. On the economy at large
2. Analyse the role of the government as owners of the business and government as an
institution responsible for designing the framework of law and policies for
maintaining harmonious IR.