Militant autoworkers disrupt ‘global value chain’

Recently, at three General Motors and Ford plants in the U.S. and Canada, production was temporarily brought to a standstill. This time, however, the cause was not sagging car sales but an event halfway around the world.

Workers at Rico Auto Industries, Ltd.—a 25-year-old Indian auto parts manufacturer that aspires “to be preferred supplier to Original Equipment manufacturers across the globe” and “to be [a] billion dollar enterprise by 2011”—held a 45-day strike that ended this month. (ricoauto.com)

The strike began in September, with union recognition topping the list of demands. The union, formed by the All India Trade Union Congress, also demanded higher wages, better food in the cafeteria, and an end to the hiring of temporary employees. While permanent, full-time workers at Rico earn an average of 11,000 rupees (less than $250) per month, temporaries only make 4,000 rupees per month.

From 1990 to 2006 wages in India rose only eight-tenths of 1 percent, while productivity increased almost 5 percent. Between 2006 and 2007 prices rose 9 percent.

“How can [workers] secure themselves, educate their children and feed their families on such meager wages?” asked strike leader Prem Kumar. (Bloomberg News, Nov. 13)

When the strike began, Rico had scabs running production, and the company was able to supply its customers. However, on Oct. 18 fighting broke out between strikers and those crossing the picket line, and a union supporter was killed. From then until the strike’s end there was no more production.

New worker demands included the arrest of company officials responsible for the killing, 2.5 million rupees in compensation to the deceased worker’s family, and rehiring 16 workers fired for the strike.

On Oct. 20, some 80,000 workers at 60 companies in the Gurgaon-Manesar industrial belt staged a one-day sympathy strike to support the workers’ demands. Worker militancy in India as a whole is rising, with 1.5 million workers involved in strikes in 2008, compared to 1 million in 2007. Last year and again this year an auto parts manager was beaten to death by angry workers.

The strike ended Nov. 5 with an agreement to reinstate nine fired workers and to sit down and discuss the other issues.

Links in the capitalist “global value chain”

Labor costs in the Indian auto parts industry are low, about one-tenth of what U.S. auto parts workers make. Companies like Rico currently export about $3.5 billion worth of products, an amount the Indian government hopes to increase sevenfold by 2015.

Labor resistance may upset the exploiters’ apple cart, however.

“People”—i.e. corporate people—“are suddenly looking at India with an eye of suspicion and concern,” said Vikas

Sehgal, a Chicago-based partner at Booz & Co. “When a single company’s strike jeopardizes the global value chain, the country suffers in the long run.” (Bloomberg News, Nov. 13)

What is this fragile “global value chain?” In the recent book “Low Wage Capitalism,” Fred Goldstein explains that “the basis for the new global restructuring is the creation of hundreds of thousands of large, medium, and small capitalist firms that compete to serve the giant monopolies. These suppliers are linked to the giant corporations in a variety of relationships. Some serve to make one or a few components. Others make entire commodities and are committed to only one monopoly or one industry. Others do design or engineering work. Still others do partial or even complete assembly work, and so on.

“But what they all have in common is that they are modern-day vassals of the giant lords of capital. They are vassals in the sense that they are dependents. Their relationship to the monopolies may be contractual, but they are as much an integral part of the global corporate empires of the companies they serve as if they were owned directly by them.

“Like the vassals of the feudal lords, they gather around IBM, General Electric, Motorola, Procter & Gamble, Nike, Citibank, JPMorgan Chase, and most of the Fortune 500, in addition to the European and Japanese transnationals, and are granted a share of the surplus value—i.e., profit—extracted from the growing global networks of wage slaves.”

For autoworkers here, the existence of this vast supply chain means that on any given vehicle rolling off the line are the fingerprints of hundreds of thousands of workers around the world. Any component on that vehicle—even the tooling and machinery that produce that component—can be made anywhere in the world. This gives the bosses tremendous leverage against the working class. By threatening to move production across borders and oceans they can scare union workers into giving up concessions and scare unorganized workers away from unions altogether.

On the other hand, the Indian auto- workers have demonstrated that the levers work both ways. Workers at one plant who manufacture a certain necessary component—in this case a single transmission bracket—were able to close three entire plants of two Fortune 500 manufacturers on the other side of the world.