Modi’s ‘Make In India’ Confronted By Youth Angst In Wistron Violence
Manjula waits outside the local police headquarters in southern Karnataka’s Kolar, once known for India’s goldmines. Her nephew, Prabhu R, 20, is inside—picked up by cops after early-morning vandalism at iPhone supplier Wistron’s facility.
“Prabhu, who has a diploma from an Industrial Training Institute, joined Wistron a month and a half back. We begged him not to leave but he insisted,” said Manjula, who travelled 600 kilometres south from her village Kodambal, Bidar as his mother is disabled. “He didn’t send a single penny home and said he hasn't been paid.”
The wage dispute triggered pandemic-frayed nerves, and videos of workers swinging sticks, breaking windowpanes and damaging property during shift-change at dawn on Dec. 12 went viral. An initial inquiry by local administration suggested lapses in hiring but the state went on the defensive, alleging a conspiracy. The police arrested more than 160 workers and have 7,000 on their list of suspects. Manpower firms that hired contract workers denied any wrongdoing.
Yet, Wistron admitted fault in wage payments and removed its India head, while Apple Inc. suspended fresh orders to the supplier after finding lapses in labour practices. That brought the spotlight on quality of employment and backlash in the jobs-starved nation. The worst publicity for Prime Minister Narendra Modi’s initiative to lure global corporations to make in India.
Kolar, bordering Tamil Nadu in southern-most Karnataka, is among the poorer regions of the state that’s also home to India’s equivalent of Silicon Valley—Bengaluru. The Wistron factory, less than 50 kilometres from the now-defunct gold fields, brought hope.
The Taiwanese supplier to Apple invested close to Rs 3,000 crore to set up the 43-acre plant in the district’s Narasapura industrial belt. It hired engineers, diploma-holders and low-skilled workers ahead of commencing operations in September to make iPhone 7 and SE devices.
Prime Minister Modi is offering $20-billion incentives to global manufacturers, eyeing more such investments to create jobs in a nation where 800 million people are younger than 35. Even prior to the pandemic, according to a 2018 World Bank report, the country needed more than 8 million jobs every year to employ its young.
Yet, nearly 90% of the employment generated at Wistron is temporary. It has 1,343 permanent employees at the factory, according to a government report after the violence. The remaining 8,438 are low-cost contract workers hired through staffing firms.
A workforce of 20-somethings, mostly drawn from poor families in rural parts of the region—Kolar, Chikkaballapur, Doddaballapur, and Bengaluru. Many are migrants from neighbouring Tamil Nadu and Andhra Pradesh, and even Bihar.
Operations at the facility began in the middle of the pandemic that has caused the GDP to contract in two straight quarters in Asia’s third-largest economy. International Labour Organization’s Global Wage Report for 2020 estimates that India's informal economy, employing bulk of the working population, would have seen one of the sharpest jobs and wage cuts during Covid-19 lockdown.
To attract investments during the recession, Karnataka joined other states to change labour laws amid protests by unions. That includes extended working hours—from 8 hours a day to 10 hours; and 60 hours a week.
For families of many contract workers at Wistron, it was the only stable income during distress. BloombergQuint’s conversations with local officials and worker families five days after the violence revealed that nearly all of them agreed to work on two 12-hour shifts—6 a.m. to 6 p.m. and 6 p.m. to 6 a.m.
Families, however, alleged that additional hours were not recorded and employees weren’t paid for it. They also cited delays in salaries, claiming it was much less than the promised Rs 22,000 a month.
Others, however, suggested a wage dispute had been brewing for months.
Chethan Kumar V, 20, an electrical diploma-holder, joined Wistron seven months ago, according to his sister-in-law Sowmya, who was waiting outside the office of the Superintendent of Police. “He told us that his salary was cut every month,” Sowmya said. The police picked him up a day after the violence.
Wistron hired temporary workers like Chethan and Prabhu through six contractors: Creative Engineers, Quess Corp Ltd., Innovsource, Adecco Group, Needs Manpower Support Services and Randstad. All of them have received notices from the state government to show their hiring and payment records.
The Mint newspaper reported citing unnamed state government officials that the six firms may face penalties and could be blacklisted because of the wages dispute.
Guruprasad Srinivasan, chief operating officer at Quess Corp., however, told BloombergQuint prior to action by Wistron and Apple that the issue stems from attendance not being recorded and no payout against overtime.
Wistron’s peak output began sometime in September and it ramped up its operations till November, he said. “There was already a substantial delay owing to Covid-19, and company was under pressure. But the technology, systems and automation have to support when such a ramp-up happens."
Wistron’s workforce had quadrupled to nearly 10,000 in a few months.
“There was disgruntlement because salaries were paid on Aug. 4, Sept. 7, Oct. 10 and Nov. 11. There was a sequence of delays that happened due to the ramp-up of load,” Srinivasan said.
He admitted that the contractors were informed about a bug in the attendance software, causing delays, but employees were not “as tolerant”. But he rejected the allegation that workers were not paid for two to three months or they were paid below the minimum wages. All employees were given offer letters with salaries based on the qualifications, he said.
“Wages of Rs 13,000 or 16,000 are calculated based on eight-hour shifts,” Srinivasan said. “If extrapolated to 12 hours, the amount to be paid is Rs 22,000. That is where the claim is really coming from.”
Munish Kumar, chief executive officer at Innovsource, told BloombergQuint all standard procedures were followed and salaries were paid on time, according to what was promised in offer letters without cuts. Adecco said in a statement that it’s “committed to defending the rights of our associates to a fair compensation and employment benefits”.
Yet, a preliminary investigation by the factories department of Karnataka had found lapses.
Wistron’s India Managing Director Sudipto Gupta declined to comment. T D Prashanth, a company executive, had filed one of the four FIRs that alleged that 7,000 persons—5,000 contract workers and 2,000 unknown persons—had vandalised the unit causing losses worth Rs 437 crore. But in an exchange filing in Taiwan later, Wistron pegged the loss at Rs 43 crore.
Several workers were not reachable with their phones switched off as police look for them. The Kolar police picked up Srikanth, an activist of left-wing Student Federation of India, alleging he instigated the violence. While the police later released him, the SFI, in a Facebook post, called it a “politically motivated charge”. All prominent labour unions accused the state of hounding workers and demanded withdrawal of cases.
Karnataka, meanwhile, is trying to reassure investors. This is the second recent industrial dispute after a shutdown at Toyota Kirloskar Motor Pvt.’s unit near Bengaluru.
Chief Minister B S Yediyurappa told reporters on Thursday that Prime Minister Modi is “worried” about the Wistron violence and the state will ensure such things aren’t repeated. “We will give full support to the company.”
State’s Labour Minister Shivaram Hebbar said the plant will resume operations in 10 to 15 days. He told BloombergQuint after Apple and Wistron admitted lapses that the unit "won't be shut down at any cost". After a meeting with state and central officers, he said, Wistron assured that the plant will reopen at the earliest.
A decision on any action against the company will be taken after a comprehensive report is submitted, he said. And the fate of the workers arrested will be decided later after the police submit report. "Within 2 to 3 days we will take a decision on the workers to be hired back.”
The cops, meanwhile, continue to bring in contract workers for questioning, according to Karthik Reddy, Superintendent of Police, Kolar. They are going through the footage of 454 cameras and WhatsApp messages circulated the night before the violence.
Sowmya, however, alleged the police had picked up Chethan even though there was no video footage of her brother-in-law inside the campus at the time of violence. He went to pick up some of his colleagues in the family car (Chethan lives with brother and parents) because of a bus strike, she said, adding that they arrested him based on his phone's location. “It's unfair that the police are harassing innocent people."
Reddy said not all of them will be arrested—they'll be released if there’s no evidence. “Since many were wearing masks, there's confusion about the actual culprits.”
Manjula hopes her nephew will be among those to be let off. “We have told the police that he had nothing to do with incident. Once he is out, I will convince him to return to Bidar. We are better off there.”