An American Lion

Indian men, Coimbature, India, 1920

India has begun openly challenging China as part of a struggle to become a player on the world stage. Not content with being a regional power, India is a firm rival with China. It is challenging China on all fronts, especially with regards to building their own blue water Navy and with regards to manufacturing things. This growth has meant that India now has to face some growing pains over labor policy.

See if you can look at this and not see shades of what this country experienced when the labor movement was on the rise:

Pricol Ltd., which makes instrument panels for the likes of Toyota MotorCorp. and General Motors Corp. [in Coimbature, India], was rocked in late September when workers burst into the office of Roy George, its 46-year-old human-resources boss. Angry over a wage freeze, they carried iron rods, witnesses say, and left Mr. George in a pool of blood. Police arrested 50 union members in connection with his death, their lawyer says. Charges haven’t been filed.

Battle lines are being drawn in labor actions across India. Factory managers, amid the global economic downturn, want to pare labor costs and remove defiant workers. Unions are attempting to stop them, with slowdowns and strikes that have led at times to bloodshed.

The disputes are fueled by the discontent of workers, many of whom say they haven’t partaken of the past decade’s prosperity. Their passions are being whipped up, companies say, by labor leaders who want to add members to their unions and win votes for left-leaning political parties. Adding to the tensions are the country’s decades-old labor codes, which workers and companies alike say require an overhaul.

“We can’t be a capitalist country that has socialist labor laws,” says Jayant Davar, president of the Automotive Component Manufacturers Association of India.

I don’t think an overall is going to go in favor of ownership, so what is coming is a necessary increase in the quality of life for the workers along with more risk to their overall job security. As the employers pay more, their margins shrink, and they can go out of business much faster if high labor costs are too much to bear. If you look at how globalization can destabilize a region in a country that is already poor, then Coimbature might be a good place to start as far as looking at what they make, how they can make it cheaper than anyone else, and then think about exporting their products. It’s just not enough to make cars for your own country anymore. The real path to building an economy is to then export the cars and compete on the global stage.

No one has ever figured out how to balance the two—the needs of ownership and management—without seeing some seesaw battle over who gains primacy. In this country, labor nearly took over things, but stern public policy and laws that weakened organized labor rolled back much of their gains. India is in the throes of thuggery and violence, akin to what we had when labor unions began to flex their muscle.