Tata Steel Europe leadership faces a Union battle through its Pension Scheme proposals

March 15, 2015

Tata Steel Europe announces plans to end its current British Steel Pension Scheme on April 1st 2016.   It faces a familiar battle with the British Steel Unions in the UK, where, according to India’s Economic Times, a claim of a total breakdown of faith in Tata Steel’s leadership has been made. A 60-day statutory consultation period begins on March 23rd, 2015

“We feel we have no option but to consult our members and prepare to ballot for industrial action to defend their hard won pension rights,” said Roy Rickhuss, General Secretary of the Community trade union and Chairman of the National Trade Union Steel Coordinating Committee. “It appears they are hellbent on closing the scheme and are not prepared to compromise. We have lost all faith in the company and its leadership, which has brought us to the brink of a major national industrial dispute.”

Read the rest of this entry »


Riots at Maruti Suzuki halts production

August 17, 2012

Industrialisation has a bloody history of battles between workers and owners. Are the riots in an India car plant a re-run of industrial history?

At least 90 people have been arrested after violent clashes between workers and managers at a Maruti Suzuki factory near the Indian capital, Delhi. A senior factory official died and more than 85 were injured, including two Japanese nationals in the riot. Maruti, India’s biggest car maker, has halted production at the factory.

The blame game

Managers and workers blame each other for starting the clashes, which follow months of troubled labour relations. The violence at the vast factory in Haryana state is believed to have erupted after an altercation between a factory worker and a supervisor.

Workers reportedly ransacked offices and set fires at the height of the violence. It escalated when they tried to take disciplinary action against the employee as other workers protested and blocked all exit gates, preventing senior executives and managers from leaving the factory. The union denied responsibility for the violence and told local media that it was triggered by “objectionable remarks” made by the supervisor.

Leniency a reason for the riots?

The Times of india suggested leniency towards Union bosses was ‘reason for rift among staff’

it appears now that the management of the auto giant may have made a major miscalculation in handling a labour incident only weeks before violence broke out in the factory. [Union leaders were treated in a more lenient way than workers after aggression towards a supervisor].

Meanwhile, the plant remains closed. The company maintains that it is giving high priority to employee safety and is considering several initiatives to scale up safety in the Manesar plant. “In this direction, the company is exploring the best safety measures in terms of equipment, personnel and on ground training for the employees,” the company said in a statement.

The act of unprovoked violence [on July 18th 2012, but July 21st according to some news reports] started without any specific industrial relations issue.

A backdrop of financial losses

The story occurred against a backdrop of losses attributed to increased royalties to Suzuki.

The main reason for the fall was a rise in royalty payments to Japan’s Suzuki, which holds a large stake in Maruti. Analysts said the increase would also affect the carmaker’s future earnings.one observing: “Raw material costs have been easing but the effect of higher royalty payments will be there in the next few quarters”.

Outside of the increased payments to Suzuki, Maruti performed well during the quarter, “The sudden change in royalty charge overshadows an otherwise strong operating performance,” said Chirag Shah at Emkay Global Financial Services.

A similar pattern of violence

Reuters reported [6th August 2012] that other foreign owned car makers such as Hyundai, and Honda have also experienced troubles at their plants in recent years.

“This is definitely sending a wrong message. Investors will be reluctant,” P. Balendran, vice-president at General Motors’ Indian unit, said of the Manesar violence. “The need of the hour is flexible labour reforms. In 2012 you cannot afford to have a rule which is applicable … from 1956.”

A bone of contention

India’s labour laws, some dating to the 1920s, make it difficult for large companies to fire permanent workers, forcing companies to hire large numbers of contractors – a bone of contention with many unions.

“We knew that something of this sort might happen sooner or later,” said Balendran. “It happened to Suzuki today, tomorrow it could happen to us.”

Latest news

Regardless of the reported stringency of India’s labour laws, the company plans to make 500 employees redundant and will re-open the plant shortly [August 21st 2012]. The challenges to leadership are likely to continue.


Much More than Marmite: The Unilever Strike

January 18, 2012

One popular newspaper has been running stories about ‘Marmite workers’ going on strike. For Unilever’s employees it’s much more than that

To associate Unilever only with one of the manufacturer’s more quirky products is an oversimplification. Unilever is a modern global organization founded by the entrepreneur and social welfare pioneer William Hesketh Lever.

The strike last month and continued today [January 18th 2011] is over the 21st (as well as the 19th century) issue of pension rights. It is believed to be the first in the company’s century of operations.

The Guardian describes the background to the strikes:

Before Christmas, Unilever, which produces goods such as Dove soap, Wall’s ice-cream, PG Tips and Marmite, was hit by the first ever national strike involving its UK operations after revealing plans for a pensions shake-up.
The firm, which employs around 7,000 workers, is looking to move 5,000 staff to a less generous career average scheme by the middle of next year. The remainder are already signed up to the new scheme, which was closed to newcomers in 2008.
On Saturday, leaders of the Unite, Usdaw and GMB unions said they would call for a series of strikes from 17 January, claiming new pension arrangements could cut retirement income for staff by 40%.

A personal view

Unilever recruited me as a technical manager in its Port Sunlight laboratories on Merseyside at the start of my professional career in the late 1960s. Even in proximity to the militant culture of the shipyards of Birkenhead and with Liverpool across the Mersey, Port Sunlight retained its paternalistic but cosy ethos. The laboratory and manufacturing sites were in walking distance from Port Sunlight’s model village built for the workers, with its Art Gallery, Bowls green and (open-air) swimming pool.

Later, as a management researcher, I retained memories leaving me with a largely positive view of big company culture and sensible employee relationships with ‘management’. Today, Unilever employees are facing up to changes to a century of tradition.

[Image is not of your editor protesting for pension rights]


The Battle for British Airways

February 4, 2010

Willie Walsh

Willie Walsh was brought into British Airlines with a justified reputation as a tough negotiator. His toughness has been met with robust rejection by the UNITE union. What’s going on at BA?

The global credit crunch has affected every international business. While there are strategic opportunities, threats are easier to see. According to a recent Business Week report:

Some observers question whether BA will shutter or try to sell (good luck in this environment) the BA OpenSkies subsidiary, which runs flights from Paris and Amsterdam to the U.S., just a year after it was created.

Further stoking investor fear, Virgin Atlantic founder Richard Branson said that he had looked at making a bid for BA but that “the airline wasn’t worth much anymore.” Branson then urged the British government not to intervene to save BA. “It would be better to wait for its demise,” he told the BBC.

At first sight, the news seems unfathomable. It seems that an e-mail had gone out to 30,000 UK employees [June 17th 2009] asking them to volunteer to take up to a month’s unpaid leave, or unpaid work. Such an appeal for loyalty seems unlikely to succeed in a situation where the leader’s style is noted as a rather enthusiastically confrontational one.

The story followed news of a personal gesture by Mr Walsh to work for a month unpaid. But this is too easy to dismiss by workers as being alright for someone like their well-heeled leader. Nor would the new offer be helped by the news that an offer to pilots has been made of shares in the company for a new deal.

According to the BBC

Mr Walsh said BA’s drive to save cash was part of a “fight for survival ..I am looking for every single part of the company to take part in some way in this cash-effective way of helping the company’s survival plan

Strikes averted, strikes threatened

The tough stance cut no ice with the unions. A strike over the Christmas Holiday period was overwhelmingly supported, and narrowly averted through a High Court action by BA. But the Unions continued to plan strike action, probably for the next major Holiday period in the Spring of 2010. In February, The company response was again to take a tough line.

In a ­letter to BA’s 38,000 staff, Walsh offered the opportunity to become “volunteer cabin crew”. He said: “I am asking for volunteers to back BA by training to work alongside cabin crew who choose not to support a strike, so we are ready to keep our customers flying as much as we possibly can if this strike goes ahead.” BA is confident that staff can be trained and certified by the beginning of March 2010, which is the earliest possible date for a cabin crew walkout if, as expected, about 12,000 employees vote for industrial action over staffing cuts.

Discussions between Unite and BA have failed to reach an agreement so far and both sides broke their silences today to cry betrayal. BA said Unite had misled the airline by organising a strike ballot while holding peace talks while Tony Woodley, joint general secretary of Unite, said BA was attempting to break a walkout with “scab labour who have had minimum training”.

A leader’s bid for cooperation

When a leader makes a bid for cooperation, reputation is likely to play a part in its reception. An earlier post in LWD was highly critical of the BA leadership style under Willie Walsh. The outcome may help throw light on the old question of situational leadership.

Creative ideas needed

As often happens, a crisis can drive creative thinking out of the window. But are there opportunities for trying out new ideas to avoid the company sliding into further decline?